The Chinese authorities are trying to eradicate the cyber crimes from the country and special attention is paid to the cryptocurrency ecosystem. Currently, 3,000 projects based on the blockchain technology are under investigation by the authorities in the country.
With the flourishing of the Initial Coin Offering (ICO) projects last year, many businesses used the opportunity to raise funds and launch or expand their business. However, not all projects are legitimate and there are many fraudulent ones. This is why the Chinese authorities starting investigating the aforementioned 3,000 blockchain projects. The growth of the cryptocurrency world also increased the number of cyber crimes and frauds related to it.
According to Reuters, the Shenzhen stock market announced it would penalize the companies that are speculating with the projects supposedly related to the blockchain technology and thus misleading the investors.
The stock market is currently investigating 17 companies, but no names were mentioned yet. These companies had unusual price movements of their stocks, probably caused by unfulfilled promises and that is what caused the suspicion by the stock market in Shenzhen.
The authorities in China prohibited a large part of the activities related to the cryptocurrencies, which resulted in drastic reduction of the trade of cryptocurrencies in the country. Recently, the authorities announced the possibility of introducing new measures against the alternative trade of cryptocurrencies and tightening the legislation related to the mining of cryptocurrencies. This announcement influenced the cryptocurrency markets in other countries, such as South Korea, where the market prices went down.