It’s no puzzler that unregulated cryptocurrencies make cryptocurrency scams easier for hackers to develop techniques and schemes for looting the general public. The market has recently witnessed huge losses after hackers had stolen almost $900 million from Coincheck, Bitconnect and BitGrail exchanges. Initial Coin Offerings also provide an easy path for scammers to generate funds in the name of a ‘new coin’.
What might come as shocking, is that aside from the big scams that everyone hears about, a research report has now suggested that smaller scams have stolen approximately $9.1 million per day in the first two months of this year. What’s even worse is that the report predicts this amount to escalate to $3.25 billion by the end of this year. The only way to potentially cull this is if market forces implement strict regulations.
Social Media and Advertising afraid of cryptocurrency scams
Scammers are using social media and other platforms to attract the audience – an audience who have little-to-no knowledge on cryptocurrencies and ICO’s. Social Media platforms like Facebook (NYSE:FB) and Twitter (NYSE:TWTR) have already started a crackdown against cryptocurrencies and related services in order to protect its user base from dodgy investments and false schemes.
Twitter is aware of cryptocurrency-related “manipulation,” and is implementing measures to “prevent these types of accounts from engaging with others in a deceptive manner,” a Twitter spokesman said.
Following Facebook, Google (NYSE:GOOG) has also announced its ban on cryptocurrency related ads amid the potential for consumer harm. This announcement came just hours ago.
“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution,” Google said.
Regulators and Banks Are Sending Warnings
Regulators are strongly criticizing the entire cryptocurrency phenomena; some are calling it a complete fraud and compare it to Ponzi Schemes, while others believe only fools like to play with digital currencies.
The Bank of England governor, Mark Carney, suggested that global authorities should take more laborious steps to bring the era of cryptocurrency “anarchy” to an end. The U.S. SEC has warned cryptocurrency exchanges to get a registration certificate or expect a crackdown in the short-term. Despite all the negative opinions, some market pundits believe that the crypto markets can and will stabilize – even if it will take a long time for that to happen.
Are the signs pointing to cryptocurrency scams being too much of a risk? What are your thoughts?
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