The Xinhua News Agency has published a news story warning Chinese readers of the prevalence of scams involving the false promise of blockchain-related investments.
Guo Yuhang (郭宇航郭宇航), director of the China Blockchain Applications Research Center (中国区块链应用研究中心) said to Xinhua that in one central Chinese province local authorities had investigated over 40 illegal fund-raising cases that were promoted using the term “blockchain.”
The biggest of these cases involved over 2 billion yuan in funds.
Authorities in the Hunan province capital of Changsha also recently busted an online pyramid scheme involving a sports app which fraudsters promoted as being “based on blockchain technology development.”
“You can’t put an equals sign in between blockchain and bitcoin, and obviously it also isn’t equal to ‘overnight wealth,'” said one industry observer to Xinhua.
Focus Report, a high-profile news show on Chinese state-owned television, recently broadcast a full episode on blockchain fraud that claimed that less than 10% of Chinese companies advertising themselves as blockchain ventures actually make use of the technology.