Chinese Bitcoin Tycoon Li Xiaolai Accused of Taking High Promotion Fees to Tout ICOs
Two partners at INBlockchain, Li Xiaolai and Lao Mao are blockchain celebrities in China. Lao Mao, the chief executive of cryptocurrency exchange Big.one, indicated in an interview on Thursday that some blockchain projects have paid a large sum of money to Li Xiaolai to promote their ICOs, according to a report from TMT Post.
“Some projects were willing to give 50% of the money they raised by ICOs, but he finally dismissed them. But If I take 20% and successfully promote it, is this amount of money more or less for me ?”Lao Mao said.
Lao Mao admitted that a cryptocurrency investment group which was founded by Li at the end of 2015 did exist and the group charge steep membership fees.
“The investment department of Li’s company invited qualified investors to join the ETH group that you are talking about, and charge 600 ETH as membership fees. But The group has only a few members now and those that left the group have been refunded.”Lao Mao said.
The outside world has long been skeptical about Li’s actions.Members of this fee-charging ETH group also invested in over 10 ICO projects following the advice of the group administrator, but most of the tokens issued through these ICOs fell below the ICO price on its first day of trading. However, Li himself did not publicly disclose that he had received 20% of ICO funding from these projects.
Chen Weijing, billionaire founder of ride-hailing start-up Kuaidi Dache and a blockchain enthusiast, raised doubt that Li’s partnership with these projects lacked transparency. For example, he can get token allocation privately at low price,even free, but this information has not been fully disclosed to retail investors when the token is traded in the cryptocurrency exchange.
In Lao Mao’s opinion, ICO issuers usually give different rights to professional investors and to retail investors.
But Chen held a different points of view. “ The price of the token I have bought is based on the token issuer’s quote and is open to the public. Blockchain celebrities have the responsibility to make the process transparent to retail investors.” Chen said.
The dispute between Li Xiaolai and Chen Weixing highlights a core problem: what is the development trend of blockchain industry? Chen said the blockchain spirit is “code is law”, so blockchain projects should be more transparent, open and fair with regards to disclosing information.