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The Chinese government has reportedly shut down a popular and well-funded crypto company called GXChain, which at its peak had a market cap of over $600 million USD.
News of this crackdown swiftly led GXChain’s price to plummet, and once more official news surrounding this crackdown is released it is highly probable that the crypto’s price will continue dropping lower and could ultimately face a liquidity crisis as buyers disappear.
GXChain Plummets Amidst Chinese Police Crackdown
At the time of writing, GXChain (GXC) is trading down nearly 20% at its current price of $0.624, which marks a steep retreat from its recent highs of nearly $1.50 that were set in early-August.
This massive drop was further perpetuated today when news broke today regarding the company’s offices being shut down by the Chinese government, which may ultimately lead the crypto to plummet towards zero as its liquidity dries up.
Dovey Wan, founding partner of Primitive Crypto, broke the news about the company being shut down, explaining that it was once of the most popular ICO projects in 2017.
“BREAKING: Another high profile 2017 ICO project GXChain $GXC just got clamped down by the Chinese police. GXChain was a very hot ICO back in the days with ATH market cap over $600M (even now still holds $48M) and considered to be among the very few legit ICOs,” he explained.
BREAKING
Another high profile 2017 ICO project GXChain $GXC just got clamped down by the Chinese police
😱😱😱
GXChain was a very hot ICO back in the days with ATH market cap over $600M (even now still holds $48M) and considered to be among the very few legit ICOs … pic.twitter.com/6uUPBx8og9
— Dovey Wan 🗝 🦖 (@DoveyWan) September 11, 2019
GXC’s Business Model May Have Sparked Police Crackdown
It’s no secret that Chinese authorities are no friends of cryptocurrency, but why they chose to target GXChain instead of other far shadier crypto projects that are located in China still remains mysterious, and the company has not yet released an official statement regarding the imbroglio.
Wan further added that one possible cause behind this crackdown could be their business model – which entails selling processed personal credit data – which is a “highly sensitive area” in China presently.
“Tbh I have no idea why the police took action against GXchain instead of 10000 other Chinese scams, as GXchain has a real business behind. The trigger might be their data business- they sell processed personal credit data, which is a highly sensitive area now in China,” Wan noted.
tbh I have no idea why the police took action against GXchain instead of 10000 other Chinese scams, as GXchain has a real business behind. The trigger might be their data business- they sell processed personal credit data, which is a highly sensitive area now in China
— Dovey Wan 🗝 🦖 (@DoveyWan) September 11, 2019
As more official news surrounding this situation is released, it is highly likely that it will grow increasingly clear as to just how big of a long-term impact this will have on GXC’s short and long-term price action.
Featured image from Shutterstock.