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The ban of ICO in China led to the growth of fraudulent crypto-currency projects

In 2017, China's law enforcement agencies stopped the activities of 107 fraudulent altcoins, including Five Elements Coin, Onecoin and Ticcoin. All these coins turned out to be ordinary financial pyramids, writes .

Zhao Shouguo, professor of economics at Northwestern University in Xi'an, linked the activity of cybercriminals in the crypto-currency market with the government's ban on conducting an ICO.

"The ban on ICO and the closure of exchanges of virtual currencies created a market vacuum and generated various fraudulent crypto-currencies. Representatives of suspects in a dirty game of coins persuaded users that due to the ban, the main crypto currency is losing its relevance and now it's their time, " he says.
In the popular Chinese social networks Wechat and QQ, there are many closed groups dedicated to altcoyn, for example, HBB Environmental Protection Coin, Radar Coin and Red Shell Coin. Group moderators place infographics showing high returns to investors to encourage users to invest.

"Invite five participants, and you can get 600 yuan ($ 90), even a beggar can do it, " says a page of one of the groups.
As the professor of the law department of the Central University of Economics and Finance in Beijing Huang Zhen says, the number of criminal schemes is growing due to the fact that duplicating altcoyins is cheap and simple. In addition, with the expansion of mobile banking and social networks, it is becoming easier to attract new investors.

"Since criminals are often located in different parts of China and organize fraud by means of computers and mobile phones, it is difficult to detain all at once and prove their guilt, " said police officer in Haikou Ren Jian.
As of the end of September this year, Chinese law enforcement agencies conducted 5,900 criminal investigations on pyramid schemes, which totaled more than 30 billion yuan ($ 4.5 billion).

Recall, in early December, the US Securities and Exchange Commission arrested accounts of Canadian resident Dominique Lacroix and his company PlexCorps, which is accused of fraudulent activities in the guise of ICO.