China’s Central Bank has already provided some important insights regarding some of the blockchain schemes that are fraudulent in some way or the other, and have been advising the people through certain procedures in order to stop them from falling prey to such schemes. The bank has now started asking the retail investors as well to report some of the criminal clues, if any, to the departments that are relevant. On August 24, Friday, four regulators along with the People’s Bank of China warned the public about many things including pyramid schemes, illegal fundraising, and other fraudulent schemes as well, related to the blockchain.
These regulators have highlighted a few important features of such schemes that are fraudulent by nature and out of those, three are very important. First one is that most of these schemes operate on the internet through the use of some of the chat tools and the online payment methods are also leveraged by some of such schemes. Other feature is that these schemes generally promote the projects related to them through some sort of false propaganda, or by tapping celebrities. The returns offered by some of these schemes are high and the risks are said to be low, and the time taken is much smaller.
The third important feature of such schemes is that these schemes show the dynamic income along with the static gain, which are nothing but a part of the gimmick played by them, which are done to attract more and more investors from the retail industry.
The warning given by the bank was very clear and said that the public should be extremely rational when dealing with blockchain, and should analyze all the aspects along with the risks involved and act after establishing a proper monetary concept only. Alipay has also given support to these regulators to monitor the trading.