A ban on initial coin offerings (ICOs) in China and South Korea has caused a ripple effect — including a token listing exodus to Japan — and we’re seeing continued evidence that Chinese investors are looking elsewhere.
Today, Trade.io — the blockchain peer-to-peer trading platform — has announced that Chien Lee, Chinese-American billionaire and majority shareholder of French soccer club OGC Nice, has been appointed to the Trade.io board of directors. Lee has also made an investment in Trade.io, although the value of this investment has not been disclosed.
Lee’s appointment is a significant one for Trade.io. In addition to his interest in OGC Nice, he is the founder and CEO of private equity firm NewCity Capital and is also the cofounder of 7 Days Group, one of the largest budget hotel chains in China. The ban doesn’t prevent Chinese investors taking an interest in overseas platforms, and CNBC reported that overseas ICOs are still being marketed and that traders are turning to peer-to-peer solutions to keep cryptocurrencies like Bitcoin alive in the region.
“Obviously, the bans in China and South Korea have impacted the ICO landscape, but our view is that this is somewhat healthy, in that it will give them time to evaluate the entire industry and weed out the good ICOs from the bad,” Jim Preissler, CEO at Trade.io, told me. “With that said, we feel they are still steadfast in embracing blockchain technology. For example, they have built a blockchain sandbox, similar to what they’ve done in Singapore and Hong Kong. It’s important to know that crypto is just one aspect of blockchain — there are many other uses and, as such, we feel China’s future in blockchain is actually quite bright and should provide ample opportunity to attract talent accordingly.”
Following the Chinese ICO ban, Xinhua reported that 90 percent of investments in ICOs were returned to investors. While Xinhua didn’t say the amount repaid, Shanghai Security reported that in the eight weeks from July to August, Chinese firms raised over $760 million through ICOs.
Lee’s investment and appointment to the board of Trade.io is intriguing. The irony here is that while China has stated that ICOs need regulation, Trade.io actually provides a form of control through blockchain-powered clarity.
“Blockchain is well suited for peer-to-peer trading due to the transparency and immutable nature of the data being transmitted,” Preissler said. “In addition, it reduces friction and inefficiencies, which reduces costs for traders. This brings a level of trust to the trading community that is unmatched with any current solution or platform and should transform the entire peer-to-peer trading industry.”
Based in Switzerland — another popular hub for ICOs — Trade.io is currently participating in its ICO and is offering up to 275 million TradeTokens (TIO), available to purchase pre-ICO from November 7. The ICO itself is scheduled to take place between November 22 and 29 of this year. Trade.io will use the proceeds of the token sale to obtain various global licenses, including a Swiss Banking License, along with capitalizing a liquidity pool that provides TradeToken holders an avenue to participate in its peer-to-peer trading platform.
Rumors suggest a lift in China’s ICO ban could follow the Communist Congress elections, as do rumors that Japan might consider implementing a ban of its own. The latter would be unlikely to happen if China lifts its ban, however, since it would put Japan at a competitive disadvantage.
Whatever transpires, it is clear that Chinese investors are taking matters into their own hands by accepting positions in overseas platforms. This poses yet another reason China might reconsider its position, as the country is losing out on local investments.