November 22, 2018 AtoZ Markets-A well-known fraudulent scheme, called “pump and dump” is popular in the crypto space in China. With applying “pump and dump” strategy, the price of crypto tokens increase through "falsely-positive" statements, which in fact are neither positive or negative, though, they still attract retail investors.
After the price reaches its highs, traders sell their tokens, where investors behind such projects usually abandon the market quietly after collecting their profits. However, when Yang Ning, a well-known angel investor was allegedly accused of following the concept referred to above, he decided to break his silence.
Yang Ning declares leaving crypto market
On Nov. 7, Yang Ning, in a post a popular Chinese social media platform called WeChat published, announced his departure from the Chinese crypto sector. Yang said that it feels “great to leave“ a world “full of liars and gamblers”. He noted that he lost “his trust in the concept of the decentralized blockchain, claiming, that it can grow only under the centralized structure of laws and regulations.
Yang provoked an immediate and surprising reaction, focused on his attitude and his project Commerce Data Connection (CDC).
CDC fraudulent speculations on token prices
The Commerce Data Connection (CDC), which was launched on the blockchain in January 2017, claimed to be the first decentralized global consumer sharing network.
In May, the exchange issued a total of 10 million CDC tokens and listed on Huobi, a Singapore based-crypto exchange ranked as the third largest one on a global scale.
On Nov. 5, Huobi announced that CDC tokens were suspended from all trading and deposit services on its platform.
As per the post Huobi published, CDC "violated the rules of Huobi Global”, adding that CDC did not commit to what it claimed in its white paper.
In his interview with 8BTC, Yang admitted that he has lost $2 million with the CDC project, noting that about 20% of the tokens of CDC are being controlled by "bad actors".
The official website of CDC has removed all the information and left only one statement, in which the team informed they decided to “dilute the value of tokens held by community members who have been maliciously manipulating the token price”, noting that their decision would “lower the cost to hold tokens by the community and stimulate the market to grow healthier”.
The CDC called suspected community members “bad actors”. Yang failed to answer who the “bad actors” are, in addition to giving answers to many other key questions, as per the 8BTC.
According to one of the CDC project investors, who decided to stay anonymous, “the project had failed to fulfill its goals that were listed on its original white paper since the beginning”. Yang case raised many questions for many investors with similar backgrounds.
Will Blockchain have future in China?
Despite raising concerns about blockchain future in China, Emma Liao, 32-year-old investor, claims that she is able to offer a more positive option for the investors, who are still skeptical about the matter.
Liao co-founded the project Ultra together with several former employees from Alibaba. According to Liao, she entered the crypto landscape to make the blockchain technology mainstream. Liao pointed out to that this ambition marks her from people like Yang, especially during a bearish market.
Refusing to comment on Yang's case, Liao highlighted that she knows him personally, saying that his case is “ very upsetting".
The CDC “has a mistake” underestimating “ the wildness of the crypto world, getting into a wild battle“, as per Liao's description, the thing they “ were not used to. ” as she added.
Liao stated that she had read a lot about blockchain and cryptocurrency, before she entered the investment arena to start her project. The Ultra project was able to raise $20 million from some of the most notable venture capitalists and token funds in China, such as the Morningside Venture Capital and others. Liao said that what truly makes Ultra outstanding, is the team behind it, a group of people who believe that the blockchain is the future.
After Bitcoin price dropped as much as 78% from its high last December, questions started to float on the surface, raising concerns on who the final winners will be, or if there will be any at all.
In conclusion, the experience proves that not all projects rushing into the crypto market will survive in the future.
Think we missed something? Let us know in the comments section below.