China's industry organization warns of risks in 'initial miner offerings'

Updated 2018-01-13 14:01:02 Xinhua

A Chinese industry association has cautioned against risks from the so-called "initial miner offerings" (IMOs), saying they are disguised digital coin fundraising that has been completely halted in the country.

Investors should be alert to hidden risks of the IMOs, the National Internet Finance Association of China (NIFA) said in a statement on Friday.

The IMOs originated in China, under which companies sell mining hardware to generate a particular cryptocurrency or token that can be rewarded to contributors. The model became popular after financial regulators including the central bank banned initial coin offerings (ICOs) in September.

The IMOs are "essentially a financing activity and a form of disguised ICO," the NIFA said, naming several related tokens, including Lianke, LLT and BFC Points.

The group called on investors not to make blind investment and encouraged individuals to report to regulators or the police on such illegal activities. "NIFA members should enhance self-regulation...and refrain from participating in speculation of ICO or 'virtual currencies.'"

The Chinese government has toughened up regulation over bitcoin and other digital cryptocurrency to rein in financial risks, with exchanges closed and trading halted.

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