Red Pulse ICO excludes chinese citizens as China cracks down on ICOs

Red pulse is an upcoming market intelligence platform focused on the Chinese market. They are seeking to crowdfund this project in the form of an RPX token sale (Initial Coin Offering, ICO). The token will be held exclusively on the Chinese developed cryptocurrency, NEO (previously known as antshares). The Red pulse team made a surprise announcement on Slack yesterday to exclude Chinese citizens from participating in the ICO (in order to “protect the interests of  Red Pulse”). This decision was shocking because NEO is a Chinese developed and focused platform. By excluding Chinese citizens, they are potentially excluding their biggest audience.

Chinese Government Restrictions?

This decision is most likely influenced by recent rumors that the Chinese government will start imposing restrictions on ICOs and token sales. Word was spreading that some chinese regulators wanted to stop token sales altogether. There has not been any official word regarding this, however, recently there was a weibo (Chinese twitter) post from the official Pudong market regulations office that they have stopped a blockchain event that was promoting ICOs (Finwise).

Prudent Precaution or necessity

It is important to note that the co-founders of Red Pulse (Johnathan Ha and Stanley Chao) are Western educated. This means that they might be more prudent when it comes to Chinese Law, especially because they might not have as many connections in China. This is one potential reason why they are not accepting Chinese citizens whilst other ICOs might be accepting them. Another reason to be prudent is that legal problems block project success. Although another possibility is that the Chinese are putting more and more pressure ICOs and this is just the first of many ICOs not to accept chinese citizens.

Market repercussions

NEO experienced a flash crash after the announcement from Red Pulse.

News that Red pulse is excluding Chinese citizens had a profound effect on the price of NEO yesterday. Shortly after the announcement, the price of Neo flash crashed from 0.0085 to 0.0062 BTC followed by a quick rebound. This is most likely due to a big investor pulling out of the market – which is not unsual in the cryptocurrency space. The quick rebound suggests that a lot of investors are unfazed by this announcement.

Resources:

Red Pulse Slack: https://redpulsetoken.slack.com

 

Leave a Reply

Your email address will not be published. Required fields are marked *