China's witch hunt against ICOs continues, with GXChain becoming the newest victim of the country's ICO crackdown. The project was launched back in 2017, during the cryptocurrency price surge, which was also the time when the entire world became obsessed with ICOs, launching new coins almost on a daily basis.
GXChain itself became a project of some success, managing to reach a market cap of $600 million during this period. Now, however, the Chinese government caught up to it, and the project is being investigated, according to Primitive Crypto's co-founder, Dovery Wan.
Wan is known for reports and warnings regarding suspicious tokens and crypto activities in the past, such as the Plus Token, which was a massive scheme that targeted Asian markets. As for GXChain, as mentioned, its investigation is only the latest one in an entire series of anti-ICO crackdowns that were conducted by the governments around the world, and particularly in the US.
Regulators and governments became quite concerned due to ICOs' potential for scams and fraud, which pose a major risk for investors around the globe. This is what led to the discovery that many projects were actually scams, whose founders were then pursued by the authorities. As a direct result of the high number of scams — as well as the fall of the crypto prices in early 2018 — investors became quite skeptical of ICOs, and many had stopped investing in them.
This, in turn, led to the near-extinction of the ICO token sale model, and allowed other models, such as STOs and IEOs, to emerge and take the ICOs' place. At the same time, crypto exchanges were in a hurry to delist countless coins which turned out to be scams, or had lower trading volumes, just to avoid being involved in legal issues. All of this reduced the hype regarding token sales, and the ICO trend never truly recovered.
As mentioned, GXChain reached some decent amount of success, at least according to today's standards. Its largest market cap was at around $600 million, which would not have put it near the top even today, but it is still more than most projects ever experience. Its price never reached some impressive heights, and the highest it ever reached is slightly above $10. The bear market of 2018 impacted the coin severely, however, and so did the news of the investigation, which took its price down to $0.58, after dropping by 22%.
Still, GXC is considered a high-profile coin which has seen a significant amount of activity on exchanges like Binance and Huobi Global. It saw over $32 million in trading, meaning that it can be seen as one of the more active altcoins. This is also likely to change significantly due to the new investigation, and the coin's price might keep dropping even further.
As far as its technology goes, the project has received a relatively high rating, as well as quite a bit of praise.
Considering China's stance on the cryptocurrency sector, and the fact that it has always been quite suspicious of ICOs, it is not surprising that it is looking for new projects that may have escaped its laws in the past. Especially since a high number of them had already turned out to be scams, with some of them potentially even managing to remain undetected for quite a long period.
With GXC targeted, the new development should be seen as a warning that even the most popular coins can be targeted by the governments if they suspect that something is not right or fully legal about them.
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