Since China issued a ban on all ICOs, the price of bitcoin tumbled and the startups who were looking to fundraise using an ICO have been thrown into a havoc. $394 million was contributed towards ICOs in the period from January to June 2017, as reported by the National Committee of Experts on Internet Financial Security Technology. With no regulation in place, fraud and speculation have become rampant.
Just how much frenzy was there? We found three examples of ridiculous ICOs (or crowdfunding projects that masqueraded as ICOs) offered on the market. They make a strong case in support of the decision to ban the fundraising activity altogether.
MLGBI (马勒戈币)
Started in mid-2017, MLGBI was a crowdfunding project looking to raise 5000 ETH, a popular cryptocurrency. The team behind MLGBI claimed that the acronym stands for Massive Linked Grid Basic Infrastructure, which referred to the blockchain platform they are trying to build.
However, the crowdfunding campaign first gained attention for its Chinese name 马勒戈币(malegebi, a homonym of an expletive that literally translates to “fornicating with your mother’s genitals”. Its original investment deck also needed to be seen to believe, showing slides on “Alpaca (草泥马 caonima which in Chinese is another homonym for an expletive) Standard Artificial Intelligence” and “The First Morden [sic] Performance Artwork Based on Block Chain Technology”.
Performance art indeed. It was hard to believe that anyone could take this seriously until angel investor Charles Xue (who founded successful technology companies and is known for being vocal on Weibo) expressed an interest in investing in the ICO.
As of September 13, a notice on MLGBI’s website (in Chinese) apologized for the early performance art-like behavior and said that it was complying with the government’s orders to refund the roughly 5000 ETH it had raised.
GX Coin (万福币)
Marketed in Chinese as万福币 (wanfubi) or auspicious coin, the GX coin project claimed to be a cryptocurrency and trading platform developed based on Ethereum. GX coin was tied to Global Future City Holding, Inc., a company that doesn’t offer many clues as to what it does on its website, or elsewhere.
What lured investors in was the claim of returns as high as 800% within the first year (in Chinese). From when GX coin was launched in February 2016 to May 2016, the price of a GX coin rose from RMB 20 per coin to RMB 25 per coin, a growth of 25%. With no clear business model, the price of the coin seemed to be driven up purely by recruiting more investors. In other words, a Ponzi scheme.

GX coin was launched by Samuel Liu, a Chinese-American businessman, who boasted about his relationship with U.S. politicians such as George, W. Bush, Barack Obama and Hillary Clinton (whether the photos have been edited is up for debate). After it became apparent that GX coin was a ponzi scheme, he was arrested along with 60 other employees in the company for defrauding around RMB 2 billion worth of funds.
Travelling Free Token (自由行)
This ICO was raising money to build a consumption and entertainment ecosystem based on the blockchain. However, Travelling Free Token’s investment deck has already been panned by Chinese media as fraud. Now with the ban in place, travelling free token isn’t going anywhere.
The Travelling Free Token investment deck (in Chinese) claimed that it already was in agreement to launch partnerships with several large companies such as Cathay Pacific, Carrefour, Amazon, and Starbucks. When reached for comment by the Beijing News, Starbucks denied that it had any sort of partnership with Travelling Free Token. As did Carrefour.
The Travelling Free Token website hasn’t been updated and still outlines an ambitious plan to expand into the Middle East, Europe and North America after the conclusion of its ICO in China in September 2017.
Too good to be true
The above examples are only three out of the many ICOs, legitimate or otherwise, that were flooding the market. But perhaps none illustrate the fever state of the market as well as a saying that has been going around in ICO WeChat groups (in Chinese):
“There are too many idiots, not enough ICOs.”