Chinese police reportedly raided ICO startup company GXChain on 11th September and arrested few executives of the company. Is GXChain a scam startup?
September 13, 2019, | AtoZ Markets – Chinese police reportedly raided the office of ICO company named GXChain in Hangzhaou city on 11 September. The local authorities have not yet disclosed the reasons.
According to Wheatpond venture capitalist Dovey Wan of GXChain, a project which bills itself as a fundamental blockchain for the global data economy has just come under pressure from the police.
Is GXChain a scam ICO startup?
As per a tweet, the firm’s office has been emptied and sealed up by the police department. The video on social media shows the absence of GXChain’s employees in the office and multiple police stickers posted on the door.
Wan also adds that according to the sources that are close with the Chinese police, which leads over the area that GXChain’s main office is located in, the executives of the company are being kept in police custody for further investigation about the case.
Moreover, she also explains that the police might have raided on GXChain because it deals with personal credit data, which is a highly sensitive business in China now.
Unlike some known fraudulent ICO exit scams raided by the Chinese police in recent times, what makes the GXChain raid surprising according to the Primitive Co-founder, is that the ICO company has a legitimate business.
GXChain Primitive Co-founder said that: “tbh I have no idea why the police took action against GXchain instead of 10000 other Chinese scams, as GXchain has a real business behind”.
Due to the police investigation, GXChain’s cryptocurrency has dropped by some 30% in the past day, falling to a market cap of $35Million and nearly falling out of this cryptomarket’s top 100 coins.
Battle against Cryptocurrency in China
Formerly known as the world’s crypto-capital, the Chinese government started its clampdown on cryptocurrency in 2017, after it placed a blanket ban on ICOs, bitcoin, and other virtual currencies. In April 2018, authorities stated that they had shut down all businesses relating to ICOs and cryptocurrency.
Also, in March 2019, the Beijing Internet Finance Industry Association issued a publication, warning the public ICOs, IEOs, and STOs were illegal.
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