Feixiaohao, a leading cryptocurrency market data provider in China, is currently under investigation by the Inner Mongolia police. The investigation has been ongoing for over six months and has led to the arrest of several key company executives. While the exact reasons behind the investigation are undisclosed, there are indications that it may involve compliance issues or disputes related to the platform’s business practices. Feixiaohao has been a prominent player in China’s crypto ecosystem since its launch in 2017, offering real-time data on digital assets and exchanges and serving as a major resource for cryptocurrency enthusiasts in the country.
Feixiaohao, often referred to as the Chinese version of CoinGecko, was established in August 2017 and quickly became the largest simplified Chinese crypto market data website, providing extensive information on over 14,000 cryptocurrencies. Despite its initial success, the platform is now facing significant legal challenges. Reports suggest that Inner Mongolia authorities may be investigating Feixiaohao for promoting dubious exchanges and scam tokens, which has been a persistent issue within the broader crypto market. In 2021, the platform came under scrutiny for advertising the Squid Game token, a cryptocurrency inspired by the Netflix series that turned out to be a scam.
The Inner Mongolia police investigation into Feixiaohao has raised concerns about the platform’s operations and compliance with Chinese laws. Multiple sources indicate that many of Feixiaohao’s exchange partners have been unable to contact the company, adding to the uncertainty surrounding its future. Despite these legal troubles, Feixiaohao continues to operate and update its website as of August 30, 2024. However, reports suggest that the current management team at Feixiaohao might not be the original group, but rather a new entity that acquired access to its codebase and is attempting to continue operations under the same brand.
The investigation into Feixiaohao comes at a time when China has been tightening its grip on the cryptocurrency sector. Since the People’s Bank of China imposed a ban on cryptocurrency transactions in September 2021, the regulatory environment has become increasingly hostile for crypto-related businesses. Despite these strict measures, Feixiaohao has managed to sustain a significant user base, with around 200,000 monthly visits as of July 2024, 23% of which originated from China. There is still a demand for cryptocurrency information and data within the country, even as official policies seek to curb digital asset activities.
The broader challenges facing the crypto industry in China are reflected in the Feixiaohao investigation. Authorities in China have ramped up enforcement actions against illegal activities associated with digital assets, with over 42,000 individuals prosecuted for fraudulent cryptocurrency activities in 2023 alone. Despite these efforts, crypto-related crimes continue to pose challenges for authorities, and crypto operations persist. Earlier this year, Industrial Bank, a major Chinese bank, announced that it is encouraging digital yuan adoption by offering carbon points to customers who use the central bank digital currency for various transactions. Customers can earn carbon points for eco-friendly actions, which can be redeemed for travel card credits and shopping vouchers.
Since the digital yuan’s official debut in 2020, Industrial Bank has opened nearly 7.3 million digital wallets for its customers, facilitating over $41 billion in transactions. Feixiaohao’s legal troubles and China’s overall crypto regulatory landscape highlight the complexities and challenges facing the cryptocurrency industry in the country. Despite ongoing regulatory crackdowns and enforcement actions, there is continued interest and demand for digital assets and related services in China, underscoring the need for effective regulation and oversight in the rapidly evolving crypto sector.
