Crypto Winter is Coming in China, Blockchain Projects Are Being Tested

January 7, 2019

There are more and more sore problems with cryptocurrencies in the world. People now are getting familiar with “pump and dump” scheme in the crypto space in China. “Pump and dump” is a concept that pumping up the price of crypto tokens in order to attract retail investors and after they ramped up the price, to sell the tokens and leave. The investor behind or the owners of those crypto token mostly leave quietly, but in some cases, they decided not to be low-key about it at all.

Declaring on his Wechat-a popular social media platform in China, Yang Ning, the well-known angel investor, published his leave from the Chinese crypto sector on November 7 this year.

In his post, he expressed his happiness to leave the crypto world that’s full of liars and gamblers. He was going to leave quietly but had to against the whole crypto sector. He said that he deleted all the group chats and people on WeChat with people who are well-known enough. He lost his faith in the concept of decentralized blockchain and ensured that blockchain can only grow under the centralized structure of laws and regulations. And this was the last time he commented on this decision

The post caused a huge break-out centered upon, surprisingly, Yang and his very own project: Commerce Data Connection (CDC).

Yang launched the CDC project in January this year as the first blockchain-based decentralized global consumer sharing network, and It did not take Yang long time to get first “trophy”. 10 million of CDC tokens were used and listed on Huobi, the third-largest crypto exchange by trading volumes, in May.

But the CDC’s party was not ephemeral, CDC Tokens were suspended from all trading and deposit services on Huobi just 6 months after getting the list. The crypto exchange found that the project team “have violated the rules of Huobi whereby the total locked amount of tokens of the project team was inconsistent with what was promised in the white paper.

Explaining for this result, Yang had blamed on “bad actors” who controlled 20% of the tokens leading the lost $2 million of him during several interviews with China-based blockchain new sites such as 8btc.

At press time, All the information had been removed from the CDC’s Websites except one statement as following:

Due to the discovery of some community members who have been maliciously manipulating the token price, [the team] has decided to dilute the value of tokens held by these bad actors. This move will lower the cost to hold tokens by the community and stimulate the market to grow healthier

Yang quit the crypto on WeChat headily left a thousand of the question of the CDC’s investors behind. They still don’t know exactly who “bad actors” are and tired to wait for the answer from that long-time angel investor.

Not long ago, On Nov 7, there was a group on WeChat led by Dovey Wan added Yang and asked him many questions around CDC’s Tokenz. They wanted him to publish the financial documents of the project and explain why his team locked the tokens and then pumped them.Dovey and her team wonder why the money wasn’t returned to the community while the tokens and codes were returned to the community in order to leave the project to develop independently.

What they received was just the silence.


An unnamed source who previously invested in Yang’s CDC project said that Yang and his team were failed to fulfill the goals that they listed on the original white paper of the CDC tokens since the beginning.

In addition, in the earlier of 2018, investors who interested in the token are mostly in “help yourself” situation. Therefore, many individuals such as the unnamed source couldn’t recognize the problem around Yang’s project during an early stage. The featured of the token is that it raises fund based on the white paper which means that’s nothing can make sure they can or will complete what they commit. As long as they have a story of their token and the story look plausible, it could make a profit. What a crazy market they are.


Yang fell from a renowned investor into an alleged scammer, Yang’s case raised one question: Should traditional venture capitalists like Yang jump into the crypto world?

But not all the investor are trapped in a bad situation like Yang. Emma Liao, another early investor of the internet industry, could, however, offer a much brighter path for the investors who are hesitated.

Liao isn’t a “low-key” investor that someone can disregard. She comes from a “red” family, her great-grandfather was Liao Yaoxiang, a high-ranking Kuomintang general who successfully fought against the imperial Japanese army during the Second Sino-Japanese War. In China and some other Asian countries, being a part of the winner in war meaning more doors are often opened for you than usual.

Although coming from a family like this give Liao many advantages, Liao didn’t think that background make her success in cross-border mergers and acquisitions to the founding of China’s first professional ice hockey club team, which is her most impressive experience.

Her impressive success may be a dream of many people, but with her, that’s just the beginning. She finally chose to enter crypto landscape to make her ambitious goal come true: to take the blockchain technology mainstream.

This dream, ultimately, is the reason why people like Yang have a different ending like people like Liao. Liao knew Yang personally but she denied to comment on his case. But she agreed to speak at a much broader level where she found incidents like Yang’s case very upsetting.

In her opinion, Yang and the people like him underestimated the wildness of the crypto world , and that causes the failure of them. Crypto world is a battle which is not always going well and you have to get used to it or be defeated anyway. That’s not anybody else’s fault.

Before starting an investment in Ultrain, Liao spent tons of time and money learning about the blockchain and the cryptocurrency. It hard work finally was paid off when she understood deeply about this new area and getting the faith from several former employees from Alibaba.

Liao dreamed about building a platform to provide public infrastructure for the future decentralized business on the blockchain when she started with Ultrain. And they, firstly, success in building this token’s platform. Looking at the staff of Ultrain at glance, no hard to see that they are all top of talents in the crypto field in China, including core cryptographers and technicians from Alibaba and Ant Financial, the biggest Fintech company in the world. With the strong supporting technology team, Ultrain has made innovations and optimizations across several areas such as consensus, smart contracts, and development frameworks.

With that being said, by far, Ultrain was able to raise $20 million from some of the most notable venture capitalists and token funds in China including names that’s not hard to see like Morningside Venture Capital, BlueRun Ventures, Draper Dragon, Aplus Capital, etc.

But more than the success in raising fund, Liao said that what truly makes Ultrainn outstanding is the team who always have the faith that the future will be built on the blockchain behind it.

Liao also cited that the core members at Ultrain chose to jump out of Alibaba with the comfortable platform and even stock option that it offers for them to join Ultrain because she and they have the same target-making the blockchain technology work and to actually build a business ecosystem.

She highly reminds again that they do not work for just short-term money.

According to Liao, this technology is still considered as nascent yet fast-growing, the reason that has brought the people hể matter deeply. If you chose to chase after  “a fad” or a quick profit, you will doom to fail from the beginning.       


Of course, only time can really tell who the final winners. Bitcoin is a represent when nobody thought it could touch the price $20.000 at the beginning and actually 78% from its record taught that high last December.

But for now, the success of Liao with her Ultrain and the failure of Yang with his CDC all show us the same lesson about a bearish-looking mark that we may have missed: Only the really good ones may survive the cold winter.

About Asia Blockchain Review

Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. It aims to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.

Our goal is to cultivate and encourage a collaborative community for our members to gather, share their experiences and endeavors in the blockchain space, and brainstorm the potential uses of blockchain technology.


Twitter: @abr_blockchain

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