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Li Xiaolai, the founder of Beijing-based venture capital firm BitFund and a largely recognized billionaire Bitcoin investor in China, has publicly stated that he drive personally move away from the blockchain and initial coin present (ICO) space.
He said on China’s largest social media platform Weibo:
“From this day on, Li Xiaolai himself will not invest in any projects (whether it is blockchain or early stage). So, if you see ‘Li Xiaolai’ associated with any enterprise (I have been associated with countless projects without my adeptness, 99% is not an exaggeration), just ignore it. I plan to spend several years to mull over on my career change. As for what I’m doing next, I’m not sure just yet.”
Doable Reasons Behind his Decision
The cryptocurrency market has experienced its fourth saddest correction in the past nine years, experiencing a 80 percent drip in valuation within the past nine months. Yet, the vast majority of ICO and blockchain calculates have held most of their holdings in Ethereum and Bitcoin from the beginning to the end of the bear market and the ICO market still remains active to this day.
The purpose of Li to abruptly exit the ICO and blockchain sector was likely fueled by two major financiers: the crackdown on ICOs by the Chinese government and a significant increase in the number of scams in the blockchain trade in.
In June, CCTV, China Central Television, a state-owned network controlled by the domination, released a documentary on blockchain and claimed that the technology has the potential to effect a level of success that is in orders of magnitude larger than that of the Internet.
The declaration released by CCTV came as a surprise to both the local cryptocurrency Stock Exchange of China and the global finance industry, especially given the ties of CCTV with the oversight.
“Blockchain is the second era of the Internet. The value of blockchain is 10 times that of the Internet. Blockchain is the automobile that produces trust,” CCTV reported.
However, less than two months after the unfetter of the report of CCTV, the government of China tightened its blanket ban on crypto, identifying ICOs as illegal fundraising tools and prohibiting any promotion of token sales within the homeland.
An official document released by the government of China read:
“Such movements are not really based on blockchain technology, but rather the practice of speculative blockchain concepts for illegitimate fundraising, pyramid schemes and fraud. The main features are as follows:
- Gamble of illegal activities, unregulated overseas markets and inability to track or praepostor transactions made in ICOs.
- Deceptive, opaque and concealed fundraising methods, relying on luminaries and influencers to manufacture hype around investments to tempt investors.
- Felonious operations like profit-generating pyramid schemes and creating Ponzi connives by describing them as ‘financial innovations.’”
Considering the reputation of Li as a high sketch billionaire investor based in China and the government’s dissatisfaction with the ICO superstore, it is highly likely that local regulations have encouraged Li and his span at Bitfund to move out of the blockchain market.
Not Out of Crypto
Li and his fund still carry on a signifcant amount of Bitcoin and other major cryptocurrencies, which is determined to be worth over a billion dollars. However, the reputation of the investor deterioated since his notice from his role as managing partner of the $1 billion Hangzhou Xiong’An Blockchain Supply. The move was possibly made to recover his brand value and remove any syndicate of his fund with illegitimate blockchain projects.
Images from Shutterstock
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