With the 2022 collapse of fraudulent crypto exchange FTX and arrest of Sam Bankman-Fried (SBF), this scam venture has been hit by numerous scandals, which for obvious reasons have sharply raised skepticism and mistrust among the general public and encouraged more calls for regulators to step in. According to billionaire investor Mark Cuban, a new scandal will soon rock the entire crypto world.
This new scandal, he says, will appear in the form of the implosion of so-called wash trades, according to him, on the centralized exchanges.
“I think the next possible implosion is the discovery and removal of wash trades on central exchanges”, the owner of the Dallas Mavericks told TheStreet in an interview by email. “There are supposedly tens of millions of dollars in trades and liquidity for tokens that have very little utilization. I don’t see how they can be that liquid”.
He cautioned: “I don’t have any specifics to offer to support my guess”.
According to Chainalysis, the downfall has caused US$9 billion of losses for FTX clients, but this number doesn’t take into account potential losses for people who deposited their funds with the exchange. The likelihood of these investors recovering them is uncertain.
Meanwhile, people who already had been cheated by crypto companies are demanding immediate ban on such fraudulent ventures. They are leaving comments on social media and news sites. Here are some of the comments:
Nick: Regulating crypto would give it an air of legitimacy, they shouldn’t do it. Investors are responsible for their own actions; they can always sue in court to recover their lost funds – and good luck collecting!
Jeffrey: Where was Markie Mark a year ago when people were dumping their life savings into these various cryptos? That’s right. He was a cheerleader.
Willaim: Sometimes the old school is the best school: Warren Buffet famously said years ago that crypto will not end well.
Mike: Tether and other stable-coins are the largest fraud in the crypto market, bigger than FTX. All crypto pricing is based mostly in fake US dollars, the biggest Bitcoin trading pair is not actual dollars but a token (Tether) that claims it is backed by dollars.
Navin: Cryptos are Pyramid scams.
Howard: The cryptoverse, including Bitcoin (someone tried to say was not a part of the crypto world) is riddled with fraud and dark dealings. This is not news, perhaps it is for unintelligent people, but for those of us that never bought into the scam, we’re already aware.
Camino: Crypto was never real money anyway, should not be legalized. It must be banned immediately.
Rebecca: “A wash trade, an illegal practice, consists of creating artificial interest around a financial product — a crypto token or coin in this case — to make a profit. This form of “pump-and-dump” scheme is widespread in the cryptocurrency industry…Scammers have to make one or another token stand out from that pack so they can engage in wash trade. As an example, according to a 2022 study by Forbes magazine on 157 centralized cryptocurrency exchanges, more than half the volumes of exchanges concerning bitcoin are fake”.
Where Yahoo’s reporters while all this was going on? Yahoo has a Crypto tab on top of it pages and two crypto value listings on top of its main-page.
WHY so much promotion and so little reporting of this like over half of crypto exchanges being fake? That sounds like a big piece of news – that was withheld from readers.
Mike: All crypto is a scandal and a fraud, you can not invest in “nothing” and expect it to be worth something.
John: Crypto was created for people to transfer currency around the world without government influence or governmental regulations. The only people who need this type of “currency” are criminals.
Crypto don’t want government regulations but they want legitimacy, they should not have either and people who “invest” should be willing to lose everything when the crypto exchanges fail after all they are investing in criminals.
Terry: Billi Buffett’s advice is simple: “Don’t pass up something that’s attractive today because you think you will find something way more attractive tomorrow.” By being too greedy, investors could end up missing the boat on a great bay.
Roger: Crypto was invented for fraudsters from day one. The fake inventor named Satoshi Nakamoto should have been a big red flag for financial regulators. Time to ban Crypto like China has done.
Arthur: The problem is that crypto, itself, IS the scandal and the fraud.
Crypto often touted as being “decentralized” or unregulated, then terra and FTX and Solana happen.
Sure, regulating crypto may give investors some piece of mind, even if pegged to the USD. But then again, doing that defeats the purpose of cryptos very existence to begin with.
It’s a paradox that crypto nerds are unwilling to address.
Kawasaki: All crypto is scam. Just outlaw this immediately.
Lauren: Yeah, artificial volume and trading are the only things propping up the values of these cryptos. Insiders are getting their money out before the crash.
Richard: Crypto is a great opportunity for the video gaming crowd to lose all the money they were supposed to be saving for their first house. Ban it!
