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GXChain is a Chinese cryptocurrency project founded in 2016. Recently it was targeted by China’s police, which resulted in the sealing of GXChain offices in Hangzhou.
The news broke out initially when Davey Wan, the CEO of the crypto asset holding company Primitive Ventures, tweeted on September 11th that Chinese police has “clamped down” on the high-profile crypto project GXChain.
Wan states that GXChain started as one of the first Chinese initial coin offerings (ICOs) that have actually reach success at the beginning of 2017. However, in September 2017, China prohibited cryptocurrency trading and placed a ban on ICOs.
Chinese authorities have since been targeting cryptocurrency scams in a series of crackdowns. Davey Wan restates that GXChain is one of the legitimate and authentic crypto projects in the country that is reliable both for its users and investors. The project celebrated its all-time high market capitalization in 2017, obtaining a value of over $600 million and reaching rapid success.
GXChain also earned a spot on China’s CCID Global Blockchain Technology Index, ranking 5th with the score of 110.7. It has a basic-tech rate of 88.3, the applicability of 18.2 and creativity of 4.2. It is currently the 90th ranked cryptocurrency globally with a market capitalization of $41 million.
Davey Wan further claims that the police raid might not be linked cryptocurrency trading, but other activities of the company. Wan disclosed that the company sold personal credit information which could appear to be a potentially suspicious activity for the Chinese authorities.
Authorities Cracks Down on Dubious Crypto Projects
The GXChain crackdown arrives at a time when several investigations surrounding Ponzi schemes and exit scams linked with cryptocurrency businesses are coming to light. As an example, it was previously exposed that around 200,000 Bitcoin(BTC)trade and 800,000 Ethereum (ETH)trade were extracted out of investors in a scam involving PlusToken. PlusToken made a promising claims of being a reliable digital wallet for storing cryptocurrencies such as Bitcoin and Ripple.
Chinese law enforcement agencies also began a series of investigations on a trading platform for cryptocurrencies called Ether Delta, which allegedly used an exit scam. Ether Delta received a large fine from the Securities and Exchange Commission (SEC) in the United States and was later sold to Chinese investors.
The events following the raid Of GXChain show a significant decrease in the price of GXChain token as represented by the data from CoinMarketCap. The company has suffered a swift blow with a decline of more than 17% in a time frame of a few hours after the Chinese authorities sealed the offices temporarily. The digital currency has dropped from about $0.75 to $0.546 now.