GXChain a well-known crypto company was raided by Chinese police in Hangzhou city on September 11th, with the reasoning not yet disclosed by local authorities.
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The prominent news outlet, Jinse requested information from the police but further details were not forthcoming, only confirming that the investigation was opened and arrests of executives were made at the GX Chain office. The confirmation of the validity of the initial reporting from the police also explained why many of the GXChain staff were uncontactable.
The news of the alleged nefarious act may come as a surprise to many. The company was one of the first to hold an initial coin offering (ICO) in 2017 and was said to be a legitimate group, unlike many who had gone down this funding route.
Since the ICO, GXChian had been successful. They reached a market cap of over $600 million USD and although times had been less favorable in recent times, their cap had only gone down to $48 million.
Yet, this figure is set to drop even further if their price is anything to go by. Following the news of the arrest, their already falling price took a steep drop of nearly 20%. The price was at a high point of $1.50 in early August but now it sits at $0.56.
Until the police or GXChain reveal any further details, it is not yet known what prompted the crackdown by authorities. There is, of course, a deep history of ICO scams in China as the recent Plus Token scam proved. But why would they target a seemingly legitimate and previously popular company?