Li Xiaolai is one of China’s most popular crypto figures and the so-called most affluent bitcoin billionaire in China. Recently, he has aimed at several front line crypto trading names in the country, labeling them ‘cheats’ in an extraordinary recording that was leaked to social media.
The South China Morning Post reports that the expletive-ridden, 50-minute recording of Li shows him calling out a series of big hitters in the crypto space including Binance, the world’s largest crypto exchange, and NEO, a token with a market cap of $2.5 billion, describing them as ‘cheats’ and ‘scams.’ Since the recording leaked to social media on July 4, there have been intense conversations over the state of the Chinese cryptosphere, with some inferring that there are significant rifts within the industry.
Source: (Wall Street Journal)
In the recording, which was filmed at a private gathering earlier in the year, Li repeatedly describes many high profile Chinese crypto startup businesses as scams, offering no real value beyond hype-driven speculation. He also describes so-called ‘mom-and-pop’ investors (retail investors) as ‘leeks’, a term that implies that they stand no realistic chance of gaining sustained profit from trading but are instead a resource to be harvested by super-investors like himself.
His remarks have sparked debates and backlash in equal measure, as the competitors he named have spoken out to protest their innocence. Many social media users in China continue the age-old debate about whether cryptocurrencies in China offer real value or are based on speculative and marketing hype.
In the aftermath of the leak, Li’s contemporaries in the Chinese cryptosphere vocally responded to his remarks on their social media accounts. Binance co-founder, He Yi, wrote on his Weibo account, “In a cheater’s eye, everyone is a cheater.” Founder of Li’s former employer, New Oriental, Yu Minhong also responded to Li’s remarks casting himself as a “cash cow” for New Oriental. Yi’s post reads, “[Speculation] provides no valuable services, and is not considered by New Oriental or me, even if it can make people rich overnight.”
Li was an English teacher before reinventing himself as a successful venture capitalist. He is the founder of venture capital firm Bitfund, which operates from Beijing. With the dubious title of ‘China’s richest bitcoin billionaire,’ Li has amassed something of a cult following among Chinese crypto enthusiasts. He has the distinction of successfully raising a Chinese record $80 million in an ICO in July 2017, shortly before the Chinese government banned this method of raising capital.
He has not directly confirmed that the recording is genuine, and he refuses to speak to the media to clear the air, but Li alluded to the authenticity of the video via a post on Chinese social media website Weibo. The post reads: “When I speak privately, I use lots of swear words. I don’t have to look after my own feelings.”
BTCManager earlier reported that the Chinese crypto space had gone underground ever since the Chinese government banned ICOs and cryptocurrency trading within China’s borders, followed by a subsequent crackdown on bitcoin mining which it sees as a waste of electricity. Following the crackdown, most Chinese crypto companies moved overseas, but a thriving underground crypto trading industry still exists, mainly using online peer-to-peer chat groups.