Recently, it was reported that Feixiaohao, China’s largest cryptocurrency market data platform, is under investigation by the Inner Mongolia police.
The investigation, ongoing for over six months, has resulted in the arrest of several key executives.
Although the exact reasons remain undisclosed, it is believed that compliance issues or disputes over the platform’s business practices might be involved.
Feixiaohao development history
Feixiaohao, often seen as the Chinese equivalent of CoinGecko, was founded in August 2017, it quickly became the largest Simplified Chinese crypto market data website, providing extensive information on over 14,000 cryptocurrencies.
Since its launch, Feixiaohao has been an important player in the crypto ecosystem and one of the main channels for cryptocurrency enthusiasts in China.
According to traffic data, the monthly visits to Feixiaohao in July 2024 were approximately 200,000, with the largest number of visits coming from China, accounting for 23% of the global visits to Feixiaohao that month.
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Feixiaohao may be investigated by the police for fraudulent projects or debt disputes
It is worth noting that Feixiao has been accused of promoting bad exchanges and fraudulent tokens. For example, in November 2021, Feixiaohao vigorously promoted the "Squid Game" token. As a result, the token "cut leeks" in the market, and it was ultimately proven to be a scam. This kind of behavior may lead to non-small accounts being suspected of non-compliant operations, which in turn attracts the attention of the police.
In addition, there is news that the founder of Feixiaohao lost money gambling in Malaysia and tried to repay the debt by selling Feixiaohao. However, improper operations during the transaction may have triggered related legal disputes, so the police intervened after the case was reported. As a result, this series of events resulted in the detention of non-alert team members.
Reports indicate that many of Feixiaohao’s exchange partners have struggled to contact the company during the investigation, leading to further uncertainty about its future. Despite the legal challenges, the platform continues to operate, with updates still being posted on its website as recently as August 2024. This ongoing activity raises questions about the current management of Feixiaohao, with some sources suggesting that a new entity might now be running the platform.
China’s tough crypto regulatory environment
This investigation occurs as China continues to tighten regulations 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 toward crypto businesses. Despite these strict measures, Feixiaohao maintained a considerable user base, with approximately 200,000 monthly visits as of July 2024, a significant portion of which came from within China.
related reading：China has revised its anti-money laundering laws, and users of virtual currency transactions will face penalties of up to $28,000
The ongoing demand for cryptocurrency information in China, even as official policies seek to curb digital asset activities, highlights the complex relationship between the country’s regulatory stance and the crypto community.
The legal scrutiny of Feixiaohao reflects broader challenges faced by the crypto industry in China, where authorities have intensified enforcement against illegal activities related to digital assets. In 2023, over 42,000 individuals were prosecuted for involvement in fraudulent cryptocurrency activities. Despite these efforts, the persistence of crypto-related crimes continues to challenge the authorities.
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