Xunlei plummets after China regulator advises on ICO risks
Xunlei (XNET) describes itself as a cloud-based acceleration technology company in China. In early October, the company announced their "Wanke coin mining" cryptocurrency project. More importantly, a company subsidiary, OneThing Technology, announced a new blockchain-based product, OneCoin, last year. Regulators quickly claimed that OneCoin constitutes a new version of banned Initial Coin Offering, or ICO, activities. Earlier Friday, members of China's National Internet Finance Association, NIFA, backed earlier statements that "ICO activities are suspected of involving illegal criminal activities including illegal fund-raising, illegal issuance of securities, and illegal sale of notes and bonds and that all institutions and individuals should immediately stop engaging in ICO activities." An ICO is defined by Investopedia as an unregulated means by which funds are raised for a new cryptocurrency venture. It is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, but usually for Bitcoin. NIFA added that the token Lianke ,formerly known as Wankebi issued by Xunlei, "has emerged as a potentially risky model" that needs to be monitored carefully. PRICE ACTION: Shares of Xunlei are down over 25% to $17.16 per share in afternoon trading.