After the stock price soared, is Thunder Wanke Coin really a scam?

Recently, something extraordinary seems to have happened to Xunlei. Xunlei issued Wanke Coin in the past two months, which pushed Xunlei's stock price up rapidly; but recently, Xunlei Finance, which also bears the name of "Xunlei", accused Xunlei Wanke Coin of being a scam and illegal fundraising, and asked Xunlei CEO Chen Lei to stop deceiving the public and infringing on the interests of Xunlei Big Data Company. What is going on? Why did Xunlei Wanke Coin lead to "internal strife" between Xunlei and Xunlei Finance? Is Wanke Coin really a scam? Let's talk about this matter briefly today.

What exactly is Xunlei Wanke Coin?

To talk about Xunlei Wanke Coin, we must first understand the recent craze for digital currencies. In the past few years, digital currencies based on P2P blockchain algorithms have suddenly become popular. The total amount of this type of digital currency is determined by the algorithm. By calculating a specific program and contributing computing power, digital currency can be obtained. This process is called "mining."

Since the total amount of this type of digital currency is limited, and its issuance and trading are not supervised by a specific central agency, some people regard it as the true form of future currency, and even call it "digital gold". The trading of this type of digital currency is becoming more and more popular. Take the most famous Bitcoin as an example. The price of one Bitcoin has risen from around US$1,000 at the beginning of the year to over US$10,000 now, which is much more popular than housing prices.

Blockchain digital currencies such as Bitcoin are generated by algorithms, and their issuance and circulation are not controlled by any institution.

For this type of digital currency, the initiator is expected to gain huge profits. The algorithm of digital currency determines the number of people who mine. When more computing power is invested, the income from mining will be subdivided, and the income of each miner will become smaller. You are the initiator of digital currency, which means you are the first person to mine, so you can get a large amount of digital currency through tiny computing power at the beginning. When the digital currency appreciates, you can naturally make a lot of money.

Faced with the temptation, many people personally participated in ICO and issued blockchain digital currency. Xunlei officially announced the mining of "Wanke Coin" on October 12. According to Xunlei, Wanke Coin also uses blockchain technology. It can share network bandwidth, storage space and other resources through Wanke Cloud smart hardware for "mining". However, unlike blockchain currencies such as Bitcoin, Wanke Coin does not have a fully public algorithm. Users need to purchase Wanke Cloud hardware to mine Wanke Coin, and cannot build mining machines by themselves.

Xunlei launches Wanke Coin, claiming to use blockchain technology

After the launch of Xunlei Wanke Coin, it quickly became popular. According to media reports, the price of Wanke Coin has soared 70 times. Due to the promotion of Wanke Coin, Xunlei's stock price has also soared. From the launch of Wanke Coin on October 22 to the recent peak on November 23, Xunlei's stock price has risen more than 5 times. There is no doubt that Wanke Coin is a very important business for Xunlei, but why is it accused of being a "scam"?

After launching Wankecoin, Xunlei's stock price has skyrocketed

Why is Wanke Coin accused of being a "scam" amid Xunlei's "internal strife"?

Why is Xunlei Wanke Coin accused of being a "scam" by Xunlei Finance? This may have to start with the relationship between Xunlei Group and Xunlei Finance. In 2016, Xunlei Group invested in Xunlei Big Data Company, but then there was a change in equity and Xunlei lost its seat on the board of directors.

Xunlei is no longer the largest shareholder of Xunlei Big Data

Recently, the board of directors of Xunlei Group decided to withdraw the brand and trademark authorization for Xunlei Big Data Company and its subsidiaries. Xunlei issued an announcement stating that Xunlei Finance, Xunlei Easy Loan, Xunlei Mini Games, and Xunlei Love Trading belong to Xunlei Big Data's business, not the business of Xunlei Group. Xunlei has withdrawn the brand and trademark authorization and required the company to stop using the Xunlei brand.

Xunlei issued an announcement, requiring Xunlei Big Data to stop using the name "Xunlei"

In response, Thunder Big Data Company fought back, saying that Thunder Big Data and Thunder Finance were both registered in accordance with the law and were protected by law and there was no such thing as withdrawing the brand; in addition, Thunder Big Data/Thunder Finance also stated that the Wanke Coin business launched by Thunder CEO Chen Lei did not use blockchain technology, violated relevant documents of seven ministries and commissions, was a disguised ICO, and was an illegal fundraising scam.

Xunlei Finance's rebuttal announcement, claiming that Wankecoin is a scam

We know that in September this year, the Central Bank, the Central Cyberspace Affairs Commission, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission issued relevant announcements on digital currencies, clearly stating that raising so-called "virtual currencies" such as Bitcoin and Ethereum is essentially an act of illegal public financing without approval. So is Xunlei Wanke Coin also an illegal financing behavior and a "scam"?

7 ministries and commissions express their views on digital currencies and strictly regulate token financing transactions

Is Xunlei Wanke Coin really a scam?

The announcement of the seven ministries and commissions mainly targets the fundraising and cashing of digital currency "tokens". Although digital currencies such as Bitcoin do not need to go through a certain platform and can be traded point-to-point, if they are to be cashed, they still have to be separated from their own system. As a result, a large number of digital currency trading platforms were born. These platforms specialize in providing centralized buying, selling and cashing services for digital currencies, which brings great financial risks - the circulation of digital currencies is uncontrolled, but these trading platforms can easily absorb large amounts of cash using digital currencies. Therefore, the seven ministries and commissions require that all types of token issuance and financing activities should be stopped immediately, and no platform should engage in token exchange business.

The consequences of a trading platform running away are disastrous. The runaway of Mt.Gox, once the largest Bitcoin exchange, caused the largest mining disaster.

So does Xunlei Wanke Coin meet the definition of "token" in the announcement of the seven ministries and commissions? According to Xunlei's official introduction, Wanke Coin can only be used to exchange for some official Xunlei services, such as network acceleration, cloud storage, shared content, etc., and cannot be exchanged for cash. At the same time, Xunlei also prohibits third-party transactions of Wanke Coin, and Xunlei will not sell or trade Wanke Coin.

However, despite Xunlei’s official statement, there are still third-party Wanke Coin trading platforms. In fact, the reason why Wanke Coin is hyped up has a lot to do with these third-party trading platforms. Although Xunlei stated that these trading platforms are all infringing platforms, once users participate in transactions on these platforms, Xunlei will cancel the Wanke Reward Program qualification, and will subsequently adopt methods such as real-name system to curb third-party transactions, but whether this can completely eliminate the Wanke Coin third-party trading platform is still a question. Not only that, because Wanke Coin can only be mined through Wanke Cloud hardware, and the output of hardware is limited, the price of Wanke Cloud hardware has also been hyped up by speculators.

Xunlei emphasizes that all Wanke Coin trading platforms are infringing, but from the side, it can be seen that there are indeed websites trading Wanke Coin.

In addition, Wanke Coin and blockchain digital currencies such as Bitcoin also differ in many aspects. The reason why people trust blockchain currencies such as Bitcoin and invest a lot of energy in mining is that their algorithms are transparent. According to the source code, anyone can build a mining machine to obtain digital currency, and everyone knows where the digital currency comes from. However, Wanke Coin is different. Although Xunlei also claims that Wanke Coin is also a blockchain digital currency, it has never fully disclosed the algorithm. Some people speculate that it is a private chain transformed from Ethereum, and some even speculate that it is not a blockchain. At the same time, Wanke Coin mining can only be carried out through Wanke Cloud hardware. Whether Wanke Coin is really trustworthy has also become a topic of discussion among many netizens.

Wankecoin only published a simple algorithm formula, but did not disclose the complete blockchain.

In short, despite Xunlei's restrictions, Wanke Coin can still be traded and hyped up through some channels; at the same time, the Wanke Coin algorithm is not fully public and can only be mined through specific hardware. Is Wanke Coin a scam? So far, it has not caused any serious consequences. However, if you participate in the hype, there are certain risks.

Summarize

As Xunlei's unique move, Wanke Coin has been accompanied by controversy since its birth. The recent "internal strife" between Xunlei Finance and Xunlei has pushed Wanke Coin to the brink of a knife. What will be the final outcome of Xunlei Wanke Coin? Will it be the savior of Xunlei? Let's continue to observe the development of the situation.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.