China’s ICO ban has started a new controversy. The brokerage agencies are on the rise in China. These agencies provide the brokerage service to the investors who are keen to make investments in the Initial Coin Offering.
These brokerage agencies have also come up with a sound strategy and they are promoting their services through a reputed social messaging app that is known as WeChat. These brokerage agencies are charging a massive premium for their services.
There is a brokerage agency by the name of Hui Tian Ce Blockchain and it charges about 10% for any investments made in an Initial Coin offering using its services. This means that the ban has actually paved way for a new business. These brokerage agencies are cashing out on this opportunity and on the desperation of the investors.
The representative of Hui Tian Ce Blockchain indicated that investors are so keen to invest in ICO’s that they willingly make advance payments through Ethereum. A Hong-Kong based marketing firm by the name of Dragonsocial stated that there were many companies out there that launched the ICO. However, the investors were limited at that point of time.
This is why Wechat was introduced to win the interest of the investors and the truth is that the strategy worked quite well. Dragonsocial stated that WeChat focused on community building and emphasized that they were walking the right direction.
At the moment there are about 20,000 WeChat groups that indulge in ICO discussion so this means that WeChat has created a strong community for ICO. Seeing this trend the Hong Kong Blockchain Society Vice-President stated that there is a dire need to regulate the online digital currency brokers also.
The unregulated dealers need to be banned because they can cause massive losses to the investors because of their undefined policies. Secondly, the investors should also understand that they should not acquire the services of these unregulated dealers.
What is alarming is that the investors continue to seek the services of these dealers. The demand for these brokerages is quite high. It is important for the investors to know that they cannot work against the ban for long.
They will eventually have to give into the rules and regulations of the country if they want to earn consistently without getting into trouble. The investor should not be enticed to take big risks as it can cause them massive losses in the near future.