The South China Morning Post has reported that a digital token offering (ICO) with ties to former Macau gangster “Broken Tooth” Wan Kuok-koi claims to have raised $750 million dollars from investors across South Asia in a mere 5-minute sale.
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The “HB” token, the second ICO token issued by Wan, will purportedly be used as prize funds in poker and chess tournaments that will be staged throughout China starting in the fall.
Wan reportedly launched the token in person at splashy events held recently in Thailand, the Philippines and Cambodia, with the latter attended by high-ranking government officials, businesspeople and celebrities from mainland China and Hong Kong.
Wan claims to have already sold 450 million of the half-a-billion digital tokens the company plans to sell. Another half-billion tokens will be generated and retained by token creators.
A final promotional launch will be hosted by Wan July 18th in Malaysia.
Wan was associated with an earlier ICO called “Dragon Coin,” which was promoted with the help of disgraced PR firm, Cambridge Analytica. The organizer of Dragon Coin denied any affiliation with Broken Tooth in an interview with CI.
Wan’s latest HB token venture is reportedly being conducted jointly by Wan’s company, World Hung Mun Investment, and a “mysterious” Beijing firm.
The “mysterious” partner in the HB coin venture is reportedly Zhonggongxin Cosmos (Beijing) Internet Technology Limited, a subsidiary of Zhonggongxin Assets Management Limited, a company involved in, among other things, asset management and construction projects in Russia.
The South China Morning Post states that the Zhonggongxin Assets Management Limited website claims the company is under the direct oversight of the Advisory Committee on the Management of Financial and Energy Resources and Capital, suggesting that Cosmos’ parent company is state-owned.
ICOs (initial coin offerings) and cryptocurrency possession and trading are presently illegal in China.
An Zhonggongxin Cosmos employee would not confirm any state ties with the South China Morning Post. “You can check the website and other materials online,” said Guo Jia. “I’m not at liberty to disclose anything else.”
But another Cosmos staff member told the Post that the company, “was partially backed by state-owned capital.”
The Zhonggongxin Cosmos website also reportedly states that the company’s main business is online gambling (chess and poker), and states the company holds exclusive government licenses to host two particular poker games.
The site also states that the company will expand the number of its physical gambling locations from the, “seven or eight it has so far to 10,000 in the following three to five years.”
Guo said that prizes in upcoming tournaments might be paid, “in half cash, half HB,” pending a final decision from, “the big bosses from both sides.”
ICO-issuers in the West have been accused of “printing money” in the form of digital tokens with promised future value that are traded speculatively in the present for fiat or established cryptocurrencies that also have current value.
Pundits have also questioned whether it makes sense to buy “a utility token” that gives future use in a casino or on a certain network but which also behaves like stock on exchanges. Buying products or gambling with stock just doesn’t make sense, they say.
According to the South China Morning Post, local critics in China say the use of HB for gambling falls into a regulatory grey area in that country.
They also express concerns about the fact that the project has not released any code for inspection, meaning people cannot track or verify the existence of the tokens, nor the token’s total or circulating supplies.
HB tokens are reportedly already being traded on a little-known Hong Kong-based exchange called “a.top.”
A commentator suggested to the South China Morning Post that any token traded on a small exchange is vulnerable to price manipulation.
