a lot of countries banned ICOs not just China, but I have never heard them banning any pre-mine shitcoin.
I have been doing some token issuance legality analysis since 2015 and more intensely recently, and basically a premine is issuance of an illegal security (at least in the USA, but the same rationale is likely to apply in many nations) unless it fails one or more of the prongs of the Howey test:
Also they premined some tokens for themselves, thus it is not a pure airdrop. It is thus illegal securities issuance when they sell these tokens unless they can argue their ongoing efforts are no longer relevant to anyone’s profit expectation. And if there are no ongoing efforts, then what does that coin offer of any significance?
Btw, I also think Ethereum’s pre-functional token issuance was likely a security, but regulators are more likely to pursue easier cases to enforce and which include fraud. There are much larger fish to fry now such as EOS’ $300+ miillion “useless token” sale.
But in EOS’ case we should empathize because:
