Gambling With Cryptocurrencies – Warning About Total Loss

The boom in cryptocurrencies promises quick profits – and allows cheaters to do brilliant business. The „Wolf of Wall Street“ warns, „This is far worse than anything I’ve ever done.“

Three letters are currently electrifying gamers: ICO. Behind these letters lie „Initial Coin Offerings“, the initial public offerings of cryptocurrencies. That sounds risky? It is actually even more than gambling.

European stock market supervision ESMA warns investors are threatened with a total loss. The initial public offerings of such currencies were unregulated, intransparent and technologically untested. Similarly, the German financial supervision BaFin had already expressed last week. In Mainland, ICOs are banned.

Jordan Belfort, the former stockbroker who is the role model for The Wolf of Wall Street, puts it this way: „This is the biggest scam ever to blow people’s ears.“

Jordan has some expertise: He spent nearly two years in prison for cheating thousands of investors for a total of $ 190 million. „This is far worse than anything I have ever done,“ he told the Financial Times, referring to the ICOs.

What had he done? He bought junk stocks that were worth a few cents. They were not traded on regular exchanges, but „over the counter“, ie directly between market participants. Then Jordan praised the papers with false information as a hot stock tip and peppered them with a rich serve.

Besides trading betting and gambling with crypto coins is the second largest field where people lose a lot of money. Three of the most popular casinos can be found on bestbitcoinpoker.org.

Pump and Dump in Crypto

The method is illegal but is used repeatedly: Scammers buy stocks that are almost worthless and try to push the price higher, praising the papers as a hot tip with phenomenal potential. As soon as investors actually buy the shares and the price goes up, the owners part with their shares – and the price collapses again. „Pump and Dump“ is the name of this method.

And that is exactly what investors can do for unregulated ICOs. Given the hype surrounding cryptocurrencies, Coinschedule says there are 219 ICOs so far this year, totaling $ 4.1 billion.

The founders of cryptocurrency projects sell the digital tokens of their ecosystem. Investors receive these tokens in exchange for other cryptocurrencies such as Bitcoin or Ethereum. Unlike the IPO of a company – the initial coin offering – they often receive neither shares in the project nor other collateral. They are betting on digital currency gains alone.

„Probably 85 percent of the people out there have no bad intentions,“ says Jordan. „But the problem is that 5 or 10 percent try to rip you off.“ And it looks like it’s happening right now: The „Business Insider“ has been watching pump and dump in several cryptocurrencies over the past few days.

And the hype about cryptocurrencies like Bitcoin creates a fertile environment for it. How great the euphoria is currently, for example, shows that the British investment company On-line Plc announced that it would rename itself Blockchain Plc, „to reflect the current and future direction.“ As a result, the stock price jumped 400 percent.

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