Chinese media has warned that several local companies have been suspected of blockchain speculation following President Xi Jinping’s blockchain push exerted last month.
Last month, Chinese leader Xi Jinping declared that blockchain technology is a crucial breakthrough and that China would seize every opportunity it gets to support research, development, and standardization on the blockchain. And while this nascent technology did prove its worth several times before by bringing about never-dreamt-before transformations in some industries, the strong endorsement from the first world leader had an entirely different impact. Undoubtedly, his speech unveiled a cascade of activities, both negative and positive.
From Communist party members launching massive content related to the technology, printing Bitcoin overview articles to Chinese companies rushing to buy blockchain-related stocks, Jinping’s thought did manage to generate a blockchain frenzy. Among these are some companies that are looking to take the easy way out.
Wave of blockchain speculation
On 18th November 2019, local Chinese media Xinhua News Agency reported that several companies are purely basing their business and stock prices on blockchain speculation and claim that they are connected to the technology.
Out of three thousand listed Chinese companies, over five hundred claims that they are legitimately associated with blockchain. However, the statistics suggest otherwise. Xinhua reports that only forty of them can back up this claim.
Blockchain technology refers to a complex network of computers that store, share, and use the digital database of information. The concept of decentralization was wholly based on the idea of reliability and transparency. Unfortunately, the media reports that owing to the rising pressure from regulators, an increasing number of listed companies are releasing blockchain-related statements, which is absurd.
And while the regulatory watchdogs are working round the clock to curtail frauds centered around the digital assets space, cases associated with pyramid schemes or bogus investment schemes continue to pop up with each passing day.
While speaking with Global Times, China Securities Regulatory Commission advisor, Dong Shaopeng, mentioned that companies making such fraudulent claims could face severe rebuke from stock exchanges, some resulting in fines or delistings.