In a joint statement, Chinese regulatory authorities have issued a warning against illegal fundraising and trading activities in the name of blockchain.

The warning has been issued by the Banking Regulatory Commission, the People's Bank of China, the Ministry of Public Security, the State Administration for Market Regulation, and the Central Cyberspace Affairs Commission.

“Recently, some lawless elements have used the banner of “financial innovation” and “blockchain” to absorb funds through the issuance of so-called “virtual currency”, “virtual assets” and “digital assets”, infringing on the legitimate rights and interests of the public. Such activities are not really based on blockchain technology, but rather the practice of speculating blockchain concepts for illegal fundraising, pyramid schemes, and fraud,” they said (loosely translated).

The regulators also pointed out that the use of internet and online payment tools for facilitating cryptocurrency trading leads to a wider dissemination of related risks. Some projects also set up websites using overseas IP addresses, and “actually carried out activities for domestic residents and remotely controlled the implementation of illegal activities,” they added.

"Some of these projects tap celebrities and airdrop 'candies' as ways for promotion and solicitation. ... In fact, they manipulate the prices of such cryptocurrencies to make profits illegally," the regulators wrote (as quoted by CoinDesk). "Some individuals claim in chat groups on messaging applications that they are able to invest in overseas crypto projects on behalf of domestic investors as a broker. ... These claims are highly likely to be fraudulent."

They also cautioned the public against other fundraising methods such as "initial exchange offerings", "initial fork offerings" and "initial miner offerings".

The warning follows recent reports that Chinese regulators were seeking to block access to 124 cryptocurrency trading platforms with overseas IP addresses. CoinDesk also reported last week that payment platforms Alipay and WeChat have announced that they will prohibit users from using their platforms for crypto-related transactions.