Summer is a peak season for industry seminars. There are all sorts of start-up forums in Hong Kong, Taiwan, Singapore and other cities. The events offer a good platform for start-ups to promote themselves, as well as let investors grasp the latest market developments.
The start-up seminars see entrepreneurs sharing their experiences, while industry insiders offer advice on what qualities investors looking for in start-up entities.
One topic that seemed to be of particular interest to many young entrepreneurs recently relates to initial coin offerings (ICOs), a type of crowdfunding using cryptocurrencies, which some people have hailed as a way to make quick money.
Several companies have used ICOs to raise capital as a bitcoin boom rippled across the world since last year. Personally, I consider this to be more of a scam rather than legitimate fund-raising activities.
For example, LoopX, an emerging cryptocurrency startup, suddenly vanished after raising US$4.5 million early this year in a series of ICOs.
In another case, a former Macau triad also known as “Broken Tooth”, has reportedly teamed up with a mainland Chinese firm and launched an ICO for “HB” tokens, which lured US$750 million in less than five minutes.
I think if a former gangster is involved, the public should have an idea how crazy the ICO party has become.
However, I still see a lot of young entrepreneurs getting very excited about the ICO topic in different seminars. That’s really worrying.
In fact, regulators in different countries have already started to crack down on ICOs. China has banned ICOs and prohibited fund-raising activities using different virtual currencies. Many financial analysts and experts have warned about the risk of speculating on encrypted currencies.
Technology is a double-edged sword. It can create miracle, as well as develop a bubble. People with inadequate knowledge may be having great misperceptions about the whole issue.
This article appeared in the Hong Kong Economic Journal on July 27
Translation by Julie Zhu
[Chinese version 中文版]
– Contact us at [email protected]