Category Archives: Li Xiaolai

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Bitcoin Evangelist Li Xiaolai Resigns from $1B Government-Backed Blockchain Fund

One of China’s most prominent cryptocurrency investors and Bitcoin advocates, Li Xiaolai, has resigned from the Hangzhou Xiong’An Blockchain Innovation Fund, giving up his position as managing partner of the USD 1 billion Chinese startup.

A brief timeline of disputes and allegations

The resignation comes after venture capitalist Chen Weixing publicly began making hostile comments toward Li. Branding the investor as a “fraud” and a “tumor” of the industry, he went on to accuse Li of owing BTC 30,000 to a group of investors, dating back to 2013. According to Chen, this was not repaid as Li had “gambled” the funding away.

Li had later responded in detail to these accusations: “Once again, it’s not true. The fund was a private equity ‘equivalent to 20 million yuan (USD 3 million)’. And I never promised to guarantee the fund’s value using Bitcoin. My quote was ‘We hope (this fund) can outrun the Bitcoin market’. As for the ‘due in September’ part, the fund was set up in a ‘4+1’ model, so it ought to due in September this year. Chen is just muddying the water.”

Audio leak

The dust had barely settled on the matter before a recording of a private meeting that took place in January 2018 was leaked onto social media on 3 July. As reported by local media outlet Baidu, Li took aim at NEO, Tron, Ripple and Binance, going so far as to call the exchange a “scam”.

Chen was quick to follow up the scandal and further questioned the Xiong’An Blockchain Fund, challenging the government’s significant financial backing.

In April 2018, the Blockchain Industrial Park was launched in one of China’s biggest tech hubs, Hangzhou, home to some of the largest tech firms in the country such as Alibaba; USD 400 billion of funding was provided from the government of the city of Hangzhou.

The resignation

On Monday, 9 June, Li announced the resignation on his Weibo account, believing that his decision would maintain the integrity and reputation of the government-backed investment fund.

He wrote: “The series of defamations from Chen Weixing against myself has brought material and negative impacts on the reputation of Xiong’An Blockchain Fund… To let the Hangzhou government continue its push for blockchain development, I will resign from my role as a managing partner.”

However, Li will not be going down without a fight. Last Friday, he announced via his WeChat channel that a defamation lawsuit had been filed against Chen, to which Chen responded, calling for other “victims” to use this opportunity to take on Li in court.

 

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Chinese Bitcoin Tycoons’ Battle of Words Over BTC 30,000

Chinese entrepreneur Chen Weixing has got himself in hot water after accusing a fellow national “Bitcoin tycoon” of misrepresenting the truth over raising Bitcoin funds, writes Coindesk.

Chen, CEO of an app-development firm called Fun City, is a known blockchain enthusiast, having invested in a long list of Chinese blockchain projects, including Qtum and Tron, and exchange operators such as Binance and Huobi, according to Quartz. He made news in 2015 when he announced a ride-sharing project with Yang Jun, co-founder of Chinese group deals app Meituan.

His recent WeChat accusations against Li Xiaolai, a successful Chinese cryptocurrency investor and early Bitcoin mover, have suggested that Li raised BTC 30,000 bitcoins (USD 200 million) in 2013 that was to mature in September 2017, but then changed the deadline to a year later.

Chen alleged that Li had spent the raised funds on a Bitcoin gambling site called Just-Dice, suggesting, “Everyone who’s been in blockchain industry long enough knows this. I’m not lying.”

The crypto community in China has now become embroiled in what is fast becoming a feud between the two Chinese entrepreneurs. Li refused to respond saying that Chen needed to prove his claims.

The latest development in the crypto-feud saw Chen making further allegations that Li lured investors during the bull market in order to liquidate his profits. These accusations lured Li out of hiding, writing an article denying all of the claims:

“Once again, it’s not true. The fund was a private equity ‘equivalent to 20 million yuan (USD 3 million).’ And I never promised to guarantee the fund’s value using Bitcoin. My quote was ‘We hope (this fund) can outrun the Bitcoin market.’ As for the ‘due in September’ part, the fund was set up in a ‘4+1’ model, so it ought to due in September this year. Chen is just muddying the water.”

According to Coindesk, Chen has made a reputation of making inflammatory remarks about other investors. Earlier this year, Zhu Xiaohu, a notable Chinese investor and managing director at GSR Ventures Management shunned WeChat group discussions, because he wanted to “maintain his integrity”.

Chen responded:

“Zhu just wants to die in the old world but I want to live in the new world to come… He doesn’t even care to keep learning. He’s also killing the innovation of a group of passionate young people while pretending to maintain that integrity of his.”

The latest on this crypto ‘Gunfight at the OK Corral’ is that Li is now considering taking legal action against Chen Weixing for defamation of character.

 

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Chinese Government Backs $1.6 Billion Blockchain Startup Fund

A new Chinese blockchain startup fund, dubbed Xiong’An Global Blockchain Innovation Fund, has received backing from the Chinese government for 30% of its total required resources of USD 1.6 billion.

The initiative was announced Monday, with Xu Xiaoping acting as the official advisor for the project. Xiaoping is the founder of venture capital firm Zhenfund, a company previously invested in blockchain projects such as Stream and Lino. The fund will be managed by Li Xiaolai, a well-known blockchain investor and Bitcoin mogul.

The announcement took place at the opening ceremony of a new blockchain industrial park in Hangzhou, a city noted for its support of fintech innovations with technology conglomerate Alibaba headquartered there.

Local news outlet Sohu reported that USD 400 million of the total resources will be provided by the Hangzhou city local government. The remaining funds will be provided by Hangzhou-based venture capital firm Tunlan Investment, the official launchers of the enterprise.

The funds will be invested into promising local blockchain projects, with the new industrial park providing the startup companies with an incubation center.

Blockchain in China

Despite the government’s unfavorable policies on cryptocurrencies, China is a leading actor in the blockchain industry. The Xiong’An Global Blockchain Innovation Fund is the most recent of Chinese government-backed blockchain initiatives.

Also based in Hangzhou is a research body led by the government that recently launched a platform utilizing blockchain technology that provides a service for identity and supply-chain tracking. The platform has been dubbed the Blockchain Registry Open Platform (BROP), officially launched at a fintech summit in Hangzhou on 26 March. The research institute behind BROP operates under the jurisdiction of the People’s Bank of China, the country’s central bank.

A local investment association also backed by the government recently scrapped plans to found a blockchain funding center, allegedly due to internal structural conflicts.

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