The Chinese government’s ICO ban was why, a week later, Sun was waiting for a flight in Incheon International Airport. People were swindled so frequently the United States Securities and Exchange Commission could barely file charges fast enough. These were “exit scams” or “pump-and-dumps,” and all told, they bilked crypto buyers for billions of dollars. People buy into initial coin offerings for all sorts of reasons: sometimes because the coin’s underlying blockchain technology is promising, or sometimes because they’re speculating that a cryptocurrency’s value might rise astronomically over time, like Bitcoin has.īut in many cases, the coin founders immediately sold all the tokens they held for a vast sum of money, crashing its value in the process and every other buyer’s investment. The state claimed ICOs were vehicles for financial fraud, pyramid schemes, and other illegal and criminal activities - a credible claim because, in 2017, hundreds of new and highly dubious cryptocurrency tokens were being introduced. The problem for Sun was that the Chinese government, just days before, had banned ICOs entirely. In fact, his company, Tron, introduced a coin called TRX - a huge success, selling out quickly for $70 million. But Sun wasn’t anxious about the money he stood to gain if it took off or what he’d lose if the token flopped. It’s the first time cryptocurrency traders have the opportunity to buy a brand-new token. An ICO, or initial coin offering, is like an initial public offering for a new stock. It was September 2017, an early height of the crypto craze, and Sun had every reason to be nervous after his first ICO. Justin Sun, a budding Chinese cryptocurrency mogul, walked through the shiny lofted atrium of the departure terminal at South Korea’s Incheon International Airport.
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