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Kripto Savaşları: Sahte Ölümler, Kayıp Mi̇lyar Dolarlar ve Sektördeki̇ Bozulmalar
Kripto, büyük bir olay. Halihazırda kullanıcısı olabilirsiniz ya da çevrenizde kripto sayesinde kısa yoldan zengin olma vaatlerinde bulunan insanlar olabilir; ancak her ne olursa olsun kripto savaşlarında zirveye yükselmek için “magazin” değeri olan şeylerden de haberdar olmanız şart.
Kendini “Kripto Kraliçe” olarak adlandıran Ruja Ignatova, yarattığı yeni kripto para birimi OneCoin ile Bitcoin’i tahtından edeceğini söyleyerek yatırımcıların milyarlarca dolar kaybetmesine sebep oldu ve sırra kadem bastı. Çok değil, birkaç yıl önce oldu bu. Hâl böyleyken paranızın güvende olduğunu size düşündüren nedir? Hem de dolandırıcılık örnekleri yalnızca OneCoin ile sınırlı değilken.
Kripto uzmanı Erica Stanford’un kaleme aldığı Kripto Savaşları, dini liderlerden ünlülere pek çok ismin dahil olduğu en şok edici kripto dolandırıcılıkları sürükleyici bir dille anlatıyor. Bu kimi zaman üzücü kimi zaman eğlenceli “Vahşi Batı” hikâyelerinde, piyasa çapında milyonlarca insanı etkileyen manipülasyon planları, yanlış anlaşılan ya da bilinçli olarak çarpıtılan yeni para teknolojileri ve Ponzi sisteminin kılık değiştirmeleri gözler önüne seriliyor.
“Kripto paralara yatırım yapmayı düşünüyorsanız önce bu kitabı okumalısınız!” —Jamie Bartlett, BBC’nin The Missing Cryptoqueen podcast’inin sunucusu, yazar, sunucu ve gazeteci
“Kriptonun, yatırımcıların küçük yatırımlarla kısa yoldan zengin olmalarını mümkün kıldığını biliyoruz. Ne yazık ki kısa yoldan zengin olmayı uman insanları dolandırmak çok kolay. Sektörde sürekli olarak yatırımcıları ağına düşürmeyi planlayan yeni dolandırıcılık projelerinin çıkmasının sebeplerinden biri bu. Erica Stanford’un kaleminden çıkan bu sürükleyici kitap ile bir yandan olanlara üzülürken diğer yandan neler olduğunu öğrenmek için heyecan duyacaksınız.”
—Dominic Frisby, komedyen, aktör, Moneyweek’te köşe yazarı ve Daylight Robbery kitabının yazarı
Kendini “Kripto Kraliçe” olarak adlandıran Ruja Ignatova, yarattığı yeni kripto para birimi OneCoin ile Bitcoin’i tahtından edeceğini söyleyerek yatırımcıların milyarlarca dolar kaybetmesine sebep oldu ve sırra kadem bastı. Çok değil, birkaç yıl önce oldu bu. Hâl böyleyken paranızın güvende olduğunu size düşündüren nedir? Hem de dolandırıcılık örnekleri yalnızca OneCoin ile sınırlı değilken.
Kripto uzmanı Erica Stanford’un kaleme aldığı Kripto Savaşları, dini liderlerden ünlülere pek çok ismin dahil olduğu en şok edici kripto dolandırıcılıkları sürükleyici bir dille anlatıyor. Bu kimi zaman üzücü kimi zaman eğlenceli “Vahşi Batı” hikâyelerinde, piyasa çapında milyonlarca insanı etkileyen manipülasyon planları, yanlış anlaşılan ya da bilinçli olarak çarpıtılan yeni para teknolojileri ve Ponzi sisteminin kılık değiştirmeleri gözler önüne seriliyor.
“Kripto paralara yatırım yapmayı düşünüyorsanız önce bu kitabı okumalısınız!” —Jamie Bartlett, BBC’nin The Missing Cryptoqueen podcast’inin sunucusu, yazar, sunucu ve gazeteci
“Kriptonun, yatırımcıların küçük yatırımlarla kısa yoldan zengin olmalarını mümkün kıldığını biliyoruz. Ne yazık ki kısa yoldan zengin olmayı uman insanları dolandırmak çok kolay. Sektörde sürekli olarak yatırımcıları ağına düşürmeyi planlayan yeni dolandırıcılık projelerinin çıkmasının sebeplerinden biri bu. Erica Stanford’un kaleminden çıkan bu sürükleyici kitap ile bir yandan olanlara üzülürken diğer yandan neler olduğunu öğrenmek için heyecan duyacaksınız.”
—Dominic Frisby, komedyen, aktör, Moneyweek’te köşe yazarı ve Daylight Robbery kitabının yazarı
280 pages, Paperback
Published May 2, 2024
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Displaying 1 - 19 of 19 reviews
February 16, 2022
Good account of some of the biggest frauds/scandals in crypto from 2007 to about 2018. Fraud is moving so quickly in the space that this isn't out of date but doesn't yet cover some of the biggest frauds yet. When Stanford focuses on the summaries of the fraud, she's excellent. She does, however, have a near-tick need to state, frequently, that crypto is revolutionary, has boundless potential applications for good and already has use cases that are positive and world-changing.
I counted four instances where she lists out positive applications. 1+2. Twice, at the beginning of the book for the Brave browser (which used crypto to raise funds and not much else). 3. Venezuela gets a little chapter dealing with its broken currency (which doesn't solve any of the surrounding issues eg that merchants don't accept bitcoin or exchanging the asset to something more liquid). I'm not sure how crypto has really helped, what the numbers are and what the societal impact has been. She then says that other countries like Venezuela can benefit. OK. So when society has broken down, crypto has its change? 4. She ends the book - and I don't think this is a spoiler - with a note of hope about a plastic recycling charity paying workers in crypto.
But *none* of the inherent drawbacks of crypto are discussed. Liquidity issues. Volatility caused by rampant speculation. 51% attacks. (She gets close to identifying this one as an inherent problem) Exchanges manipulating the markets. The drawbacks of POW vs POW. The 20% failed transfers. The laughable limits on transactions per second. The forks for the wealthy etc. None of this is really touched, certainly not in a meaningful way.
So we end with a good account of the frauds with razor-thin analysis and a bewilderingly optimistic take on how these technologies exploited by some of the shadiest groups (also: idiots and a**holes) will somehow launch a Utopia. Ignore the fluff and there's a great account here.
I counted four instances where she lists out positive applications. 1+2. Twice, at the beginning of the book for the Brave browser (which used crypto to raise funds and not much else). 3. Venezuela gets a little chapter dealing with its broken currency (which doesn't solve any of the surrounding issues eg that merchants don't accept bitcoin or exchanging the asset to something more liquid). I'm not sure how crypto has really helped, what the numbers are and what the societal impact has been. She then says that other countries like Venezuela can benefit. OK. So when society has broken down, crypto has its change? 4. She ends the book - and I don't think this is a spoiler - with a note of hope about a plastic recycling charity paying workers in crypto.
But *none* of the inherent drawbacks of crypto are discussed. Liquidity issues. Volatility caused by rampant speculation. 51% attacks. (She gets close to identifying this one as an inherent problem) Exchanges manipulating the markets. The drawbacks of POW vs POW. The 20% failed transfers. The laughable limits on transactions per second. The forks for the wealthy etc. None of this is really touched, certainly not in a meaningful way.
So we end with a good account of the frauds with razor-thin analysis and a bewilderingly optimistic take on how these technologies exploited by some of the shadiest groups (also: idiots and a**holes) will somehow launch a Utopia. Ignore the fluff and there's a great account here.
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May 3, 2022Learn to spot some of the biggest red flags in the cryptosphere.
If you said “no,” then you just saved yourself a lot of (hypothetical) money. PlexCoin’s pitch was full of red flags. Those outlandish claims about PlexCard holders never having to worry about exchange rates and investors being able to use PlexCoin to pay their utility bills? They sounded too good to be true because they were. And there was nothing clairvoyant about PlexCoin’s “insights” into the rising future price of PlexCoin tokens – it’s simply impossible to accurately predict what value a currency, crypto or otherwise, will hold in the coming weeks or months.
If you’d done some more digging, you’d have found more red flags. For one thing, it’s standard practice for crypto companies to release a report ahead of their ICO, outlining how they’ll allocate the funds the ICO is projected to raise. PlexCoin did that . . . about 90 minutes before their presale started. That didn’t leave eager investors much time to do their research before buying in. And if you’d looked at their website, you might have noticed there was no team photo. In fact, there was no information about who was behind PlexCoin at all. According to PlexCoin, this was for undisclosed security reasons. They could have at least mimicked the equally scammy crypto startup Benebit and copy-pasted a photo from an elite British boy’s school to use on their staff page.
PlexCoin’s ICO raised $15 million. But their tokens never really rose in value, and their investors never saw the promised ROI. PlexCoin’s founders never expected they would. They siphoned off as much of that $15 million as they could before they were arrested for fraud, fined $100,000, and given a two-month jail term. Most investors never saw their money again.
PlexCoin wasn’t an isolated case. Between 2016 and 2018, you couldn’t throw a Bitcoin without hitting a dodgy crypto startup. While legitimate currencies like Bitcoin and Etherium have proven to be solid investments – sometimes stratospherically so – the market for crypto was initially barely regulated, poorly policed, and dangerously easy to exploit. The code behind Bitcoin was open source, meaning anyone could access it to create their own company with its own currency. And ICOs offered these companies an unchecked opportunity to raise vast amounts of money by conjuring tokens out of thin air, and then selling them without offering equity or having to meet any legal requirements. For fraudulent crypto companies this was, quite literally, money for nothing.
Nevertheless, investors couldn’t get enough. At the peak of the early crypto bubble, the market cap for cryptocurrencies reached a $1.8 trillion valuation. The volatile nature of this emerging market meant that some investors saw real returns, becoming millionaires – and more – overnight.
But all bubbles eventually burst. Now, law enforcement estimates that over 98 percent of crypto ICOs are, at best, failed projects. At worst, they’re outright scams. At least some companies were upfront about this. ScamCoin promised investors a 0 percent return on 100 percent of their investments – and, unlike many ICOs, it delivered on its promise. PonziCoin, despite its unpromising name, still raised $250,000 at its ICO. And plenty of other crypto companies with names like “Rich,” “Gold,” or “Real” seemed to promise authenticity and wealth.
Unfortunately, most investors would have done just as well if they’d invested in ScamCoin.
---
The oldest scam in the book.
In 2009, when Bitcoin was launched, one token was worth less than a cent. By 2014, one Bitcoin token was valued at roughly $800. No wonder investors were looking to get a foot in the door of the next big cryptocurrency. And in September 2014, OneCoin burst onto the scene. Its charismatic founder, Dr. Ruja Ignatova, all but guaranteed early investors the same staggeringly high returns Bitcoin was now delivering.
Dr. Ruja hyped OneCoin as a truly innovative online currency, secured with cutting-edge blockchain technology. But while the product she was spruiking was ultramodern, she was, in reality, running one of the oldest scams in the book.
While eager investors were buying up OneCoin’s ICO, Dr. Ruja was partnering with a notorious businessman whose involvement with OneCoin should have set alarm bells ringing. This was Igor Alberts, a Dutch businessman who had earned hundreds of millions spearheading multilevel marketing schemes, or MLMs. In an MLM, marketers earn not just by selling products but by recruiting other sellers and taking a cut of all the profits those sellers, known as the downline, generate.
Together, Dr. Ruja and Alberts implemented a similar structure at OneCoin. Investors were incentivized to bring in more investors, with the promise of a very generous 25 percent cut of any profits from their downline, to be paid part in OneCoin and part in Euros – cold, hard cash. Some investors grew very rich very quickly thanks to these incentives. But their profits were all coming from their downline, and not from the intrinsic value of OneCoin itself.
So, what was the intrinsic value of OneCoin? Well, here’s where it gets really tricky. On the surface, OneCoin appeared to be gaining value. Investors could look at their wallets and see just how much their tokens were worth on any given day. But cryptocurrency is effectively worthless unless it can be exchanged for other forms of crypto or for cash. There are numerous online platforms that facilitate these exchanges. OneCoin was never listed on any of them. According to Dr. Ruja, it was building its own exchange. But this exchange never materialized.
Why didn’t the fact that OneCoin couldn’t be exchanged for any other form of currency raise concern? Well, lots of investors trusted the value they saw in their wallets – and with good reason. Cryptocurrency is ultrasecure, thanks to the blockchain databases where it’s stored. Every transaction is written into the database in independent code that can’t be overwritten; this means not even the inventor of the code can alter a token’s value.
---
Small crypto concerns can be manipulated to bring big returns – for some.
Many in the crypto community, among them Cotten’s creditors, believe he faked his death. They’ve even called for an exhumation of his remains. They note the shady circumstances around his death, right down to the misspelling of his name on his death certificate. Cotten drafted a will a mere four days before he died. After his death, rather than sending his body to the embalmer’s as was their usual practice, the hospital sent Cotten’s corpse back to his hotel. The hotel then sent the corpse to the embalmer – but the embalmer didn’t accept the body, stating that there was no cause of death supplied alongside Cotten’s corpse.
Eventually, a medical college did the deed. Cotten’s widow accompanied the body back to Canada, where Cotten was given a closed-casket funeral, but she didn’t announce his death for another month. In the meantime, QuadrigaCX was still accepting new customers.
One of Cotten’s contractors remembered that Cotten kept a safe bolted to his attic rafters. This contained many, if not all, of the private keys needed to access the crypto stored on QuadrigaCX. Hearing of Cotten’s death, the contractor went to the house. Reportedly, all they found in the attic were four holes in the rafters where the safe had once been bolted. The keys, like Cotten himself, had disappeared.
The crypto market has had more than its fair share of big scams. Funnily enough, some of the biggest scams revolve around some of the smallest, least successful currencies. Remember in the heady days of the mid 2010s, when a silly number of ICOs flooded the market? The end result was a silly number of currencies that had little function or value. We’re talking about very small fish in a very big pond. Some of these currencies were so insignificant that the major crypto exchanges wouldn’t even list them. But smaller exchanges operating on the wild fringes of the market were often less discriminating. Some would list any currency that came calling – which is how some of the market’s smallest currencies came to be manipulated to deliver big returns.
How does this happen? Well, unless you have Jeff Bezos money, there’s no way you can manipulate the value of Bitcoin with a single buy or sell – it’s simply too valuable. But with small, niche currencies, it’s a different story. With a small currency, roughly $10,000 would be enough to place a buy or sell order large enough to drastically impact the currency’s value. If you were to place a large sell order, for example, you could spook the market. Investors would offload their coin, which you could then scoop up for a song. Once the currency’s value corrected itself, you’d have made a tidy profit. On the other hand, you could make a large buy. Doing this would artificially drive up the currency’s value, and you could sell your tokens off for more than they’re really worth. This kind of trade is known as a “pump and dump.”
Soon, pump and dump groups organized through the messaging service Telegram were orchestrating these trades, wildly inflating a currency’s value for a day or two – and then pocketing the profits. YouTubers in the cryptosphere got in on the action, too. Their signature move? Release a seemingly informational clip about a “promising” niche currency – a currency they’ve already bought into – thus luring inexperienced investors to pump up the price. While still spruiking the currency in their online videos, the crypto YouTuber quietly sells off their own holdings.
With even a small amount of influence, a small, volatile market can be easily manipulated. What happens when someone with a huge amount of influence gets to work in that same market?
---
Bubbles can be built and burst with a single tweet.
You might not know John McAfee, but – thanks to his ubiquitous computer pop-ups – you’re almost certainly familiar with the antivirus software he created. In 1994, McAfee the person sold his shares in McAfee Antivirus, banked $100 million, and went to Belize. There, if stories are to be believed, he attempted to invent female viagra, created natural antibiotics from plants, got addicted to bath salts, and – this last story is verifiably true – became embroiled in a murder and made it onto the Belizean police’s wanted list. In 2012, McAfee fled Belize for Guatemala and, to avoid extradition back to Belize, ultimately returned to the US, where he quickly became interested in cryptocurrency.
In 2017, McAfee infamously tweeted that Bitcoin would be worth $500,000 a coin in 2020 – and if it wasn’t he’d eat a specific part of his anatomy on live television. (Yes, that specific part.) Meanwhile, over the course of the year, Bitcoin went from $2,000 a token to nearly $20,000 a token. Was this partly due to McAfee’s confidence? One man, named Peter Galanko, thought it might be.
Galanko had invested in a niche currency called Verge. When Verge was tipped as the next hot investment, Galanko’s holdings quadrupled in value. He saw how buzz could drive up profit and began promoting Verge to his own 60,000 Twitter followers. But he wasn’t satisfied. He wanted a bigger reach. So, he contacted McAfee, who obliged Galanko’s request by tweeting that Verge was an investment that “couldn’t lose.” Verge’s market capitalization soared to a valuation of $2 billion, representing a 1,800 percent increase of its prior valuation.
Galanko was pleased. McAfee was not. He wanted payment in kind and demanded $1 million in crypto from Galanko, which Galanko refused to pay. So McAfee tweeted again, this time saying Verge wasn’t worth anything near $2 billion. Verge’s bubble burst shortly afterwards. So much for Galanko’s scheme. McAfee, however, continued to use his social media accounts to influence crypto markets, right up until he was arrested and charged with “fraudulently touting ICOs.”
These days, as crypto becomes more legitimate and trading becomes increasingly regulated, the market has become harder to manipulate. But many early adopters still remember the days when Bitcoin investors turned into overnight millionaires, when the price of a token could climb from a dollar or two into the tens and hundreds of thousands, and when one man with a Twitter account was enough to send the valuation of obscure currencies soaring.
Bitcoin revolutionized the way we think about money and made a lot of people very wealthy in the process. But investors seeking to recreate Bitcoin’s early success should proceed with caution. As the stories behind outfits like OneCoin and QuadrigaCX show, not every crypto startup is legitimate.
And here’s some more actionable advice:
Don’t discount cryptocurrency altogether.
Sure, there are lots of crypto scams out there – but plenty of outfits are actually trying to harness this revolutionary technology to change things for the better. Check out Plastic Bank, a crypto enterprise that’s tackling the problem of plastic pollution in our oceans. Plastic Bank rewards people in some of the world’s poorest communities for collecting plastic waste. Collectors receive digital money for every kilogram of plastic they “bank.”
If you said “no,” then you just saved yourself a lot of (hypothetical) money. PlexCoin’s pitch was full of red flags. Those outlandish claims about PlexCard holders never having to worry about exchange rates and investors being able to use PlexCoin to pay their utility bills? They sounded too good to be true because they were. And there was nothing clairvoyant about PlexCoin’s “insights” into the rising future price of PlexCoin tokens – it’s simply impossible to accurately predict what value a currency, crypto or otherwise, will hold in the coming weeks or months.
If you’d done some more digging, you’d have found more red flags. For one thing, it’s standard practice for crypto companies to release a report ahead of their ICO, outlining how they’ll allocate the funds the ICO is projected to raise. PlexCoin did that . . . about 90 minutes before their presale started. That didn’t leave eager investors much time to do their research before buying in. And if you’d looked at their website, you might have noticed there was no team photo. In fact, there was no information about who was behind PlexCoin at all. According to PlexCoin, this was for undisclosed security reasons. They could have at least mimicked the equally scammy crypto startup Benebit and copy-pasted a photo from an elite British boy’s school to use on their staff page.
PlexCoin’s ICO raised $15 million. But their tokens never really rose in value, and their investors never saw the promised ROI. PlexCoin’s founders never expected they would. They siphoned off as much of that $15 million as they could before they were arrested for fraud, fined $100,000, and given a two-month jail term. Most investors never saw their money again.
PlexCoin wasn’t an isolated case. Between 2016 and 2018, you couldn’t throw a Bitcoin without hitting a dodgy crypto startup. While legitimate currencies like Bitcoin and Etherium have proven to be solid investments – sometimes stratospherically so – the market for crypto was initially barely regulated, poorly policed, and dangerously easy to exploit. The code behind Bitcoin was open source, meaning anyone could access it to create their own company with its own currency. And ICOs offered these companies an unchecked opportunity to raise vast amounts of money by conjuring tokens out of thin air, and then selling them without offering equity or having to meet any legal requirements. For fraudulent crypto companies this was, quite literally, money for nothing.
Nevertheless, investors couldn’t get enough. At the peak of the early crypto bubble, the market cap for cryptocurrencies reached a $1.8 trillion valuation. The volatile nature of this emerging market meant that some investors saw real returns, becoming millionaires – and more – overnight.
But all bubbles eventually burst. Now, law enforcement estimates that over 98 percent of crypto ICOs are, at best, failed projects. At worst, they’re outright scams. At least some companies were upfront about this. ScamCoin promised investors a 0 percent return on 100 percent of their investments – and, unlike many ICOs, it delivered on its promise. PonziCoin, despite its unpromising name, still raised $250,000 at its ICO. And plenty of other crypto companies with names like “Rich,” “Gold,” or “Real” seemed to promise authenticity and wealth.
Unfortunately, most investors would have done just as well if they’d invested in ScamCoin.
---
The oldest scam in the book.
In 2009, when Bitcoin was launched, one token was worth less than a cent. By 2014, one Bitcoin token was valued at roughly $800. No wonder investors were looking to get a foot in the door of the next big cryptocurrency. And in September 2014, OneCoin burst onto the scene. Its charismatic founder, Dr. Ruja Ignatova, all but guaranteed early investors the same staggeringly high returns Bitcoin was now delivering.
Dr. Ruja hyped OneCoin as a truly innovative online currency, secured with cutting-edge blockchain technology. But while the product she was spruiking was ultramodern, she was, in reality, running one of the oldest scams in the book.
While eager investors were buying up OneCoin’s ICO, Dr. Ruja was partnering with a notorious businessman whose involvement with OneCoin should have set alarm bells ringing. This was Igor Alberts, a Dutch businessman who had earned hundreds of millions spearheading multilevel marketing schemes, or MLMs. In an MLM, marketers earn not just by selling products but by recruiting other sellers and taking a cut of all the profits those sellers, known as the downline, generate.
Together, Dr. Ruja and Alberts implemented a similar structure at OneCoin. Investors were incentivized to bring in more investors, with the promise of a very generous 25 percent cut of any profits from their downline, to be paid part in OneCoin and part in Euros – cold, hard cash. Some investors grew very rich very quickly thanks to these incentives. But their profits were all coming from their downline, and not from the intrinsic value of OneCoin itself.
So, what was the intrinsic value of OneCoin? Well, here’s where it gets really tricky. On the surface, OneCoin appeared to be gaining value. Investors could look at their wallets and see just how much their tokens were worth on any given day. But cryptocurrency is effectively worthless unless it can be exchanged for other forms of crypto or for cash. There are numerous online platforms that facilitate these exchanges. OneCoin was never listed on any of them. According to Dr. Ruja, it was building its own exchange. But this exchange never materialized.
Why didn’t the fact that OneCoin couldn’t be exchanged for any other form of currency raise concern? Well, lots of investors trusted the value they saw in their wallets – and with good reason. Cryptocurrency is ultrasecure, thanks to the blockchain databases where it’s stored. Every transaction is written into the database in independent code that can’t be overwritten; this means not even the inventor of the code can alter a token’s value.
---
Small crypto concerns can be manipulated to bring big returns – for some.
Many in the crypto community, among them Cotten’s creditors, believe he faked his death. They’ve even called for an exhumation of his remains. They note the shady circumstances around his death, right down to the misspelling of his name on his death certificate. Cotten drafted a will a mere four days before he died. After his death, rather than sending his body to the embalmer’s as was their usual practice, the hospital sent Cotten’s corpse back to his hotel. The hotel then sent the corpse to the embalmer – but the embalmer didn’t accept the body, stating that there was no cause of death supplied alongside Cotten’s corpse.
Eventually, a medical college did the deed. Cotten’s widow accompanied the body back to Canada, where Cotten was given a closed-casket funeral, but she didn’t announce his death for another month. In the meantime, QuadrigaCX was still accepting new customers.
One of Cotten’s contractors remembered that Cotten kept a safe bolted to his attic rafters. This contained many, if not all, of the private keys needed to access the crypto stored on QuadrigaCX. Hearing of Cotten’s death, the contractor went to the house. Reportedly, all they found in the attic were four holes in the rafters where the safe had once been bolted. The keys, like Cotten himself, had disappeared.
The crypto market has had more than its fair share of big scams. Funnily enough, some of the biggest scams revolve around some of the smallest, least successful currencies. Remember in the heady days of the mid 2010s, when a silly number of ICOs flooded the market? The end result was a silly number of currencies that had little function or value. We’re talking about very small fish in a very big pond. Some of these currencies were so insignificant that the major crypto exchanges wouldn’t even list them. But smaller exchanges operating on the wild fringes of the market were often less discriminating. Some would list any currency that came calling – which is how some of the market’s smallest currencies came to be manipulated to deliver big returns.
How does this happen? Well, unless you have Jeff Bezos money, there’s no way you can manipulate the value of Bitcoin with a single buy or sell – it’s simply too valuable. But with small, niche currencies, it’s a different story. With a small currency, roughly $10,000 would be enough to place a buy or sell order large enough to drastically impact the currency’s value. If you were to place a large sell order, for example, you could spook the market. Investors would offload their coin, which you could then scoop up for a song. Once the currency’s value corrected itself, you’d have made a tidy profit. On the other hand, you could make a large buy. Doing this would artificially drive up the currency’s value, and you could sell your tokens off for more than they’re really worth. This kind of trade is known as a “pump and dump.”
Soon, pump and dump groups organized through the messaging service Telegram were orchestrating these trades, wildly inflating a currency’s value for a day or two – and then pocketing the profits. YouTubers in the cryptosphere got in on the action, too. Their signature move? Release a seemingly informational clip about a “promising” niche currency – a currency they’ve already bought into – thus luring inexperienced investors to pump up the price. While still spruiking the currency in their online videos, the crypto YouTuber quietly sells off their own holdings.
With even a small amount of influence, a small, volatile market can be easily manipulated. What happens when someone with a huge amount of influence gets to work in that same market?
---
Bubbles can be built and burst with a single tweet.
You might not know John McAfee, but – thanks to his ubiquitous computer pop-ups – you’re almost certainly familiar with the antivirus software he created. In 1994, McAfee the person sold his shares in McAfee Antivirus, banked $100 million, and went to Belize. There, if stories are to be believed, he attempted to invent female viagra, created natural antibiotics from plants, got addicted to bath salts, and – this last story is verifiably true – became embroiled in a murder and made it onto the Belizean police’s wanted list. In 2012, McAfee fled Belize for Guatemala and, to avoid extradition back to Belize, ultimately returned to the US, where he quickly became interested in cryptocurrency.
In 2017, McAfee infamously tweeted that Bitcoin would be worth $500,000 a coin in 2020 – and if it wasn’t he’d eat a specific part of his anatomy on live television. (Yes, that specific part.) Meanwhile, over the course of the year, Bitcoin went from $2,000 a token to nearly $20,000 a token. Was this partly due to McAfee’s confidence? One man, named Peter Galanko, thought it might be.
Galanko had invested in a niche currency called Verge. When Verge was tipped as the next hot investment, Galanko’s holdings quadrupled in value. He saw how buzz could drive up profit and began promoting Verge to his own 60,000 Twitter followers. But he wasn’t satisfied. He wanted a bigger reach. So, he contacted McAfee, who obliged Galanko’s request by tweeting that Verge was an investment that “couldn’t lose.” Verge’s market capitalization soared to a valuation of $2 billion, representing a 1,800 percent increase of its prior valuation.
Galanko was pleased. McAfee was not. He wanted payment in kind and demanded $1 million in crypto from Galanko, which Galanko refused to pay. So McAfee tweeted again, this time saying Verge wasn’t worth anything near $2 billion. Verge’s bubble burst shortly afterwards. So much for Galanko’s scheme. McAfee, however, continued to use his social media accounts to influence crypto markets, right up until he was arrested and charged with “fraudulently touting ICOs.”
These days, as crypto becomes more legitimate and trading becomes increasingly regulated, the market has become harder to manipulate. But many early adopters still remember the days when Bitcoin investors turned into overnight millionaires, when the price of a token could climb from a dollar or two into the tens and hundreds of thousands, and when one man with a Twitter account was enough to send the valuation of obscure currencies soaring.
Bitcoin revolutionized the way we think about money and made a lot of people very wealthy in the process. But investors seeking to recreate Bitcoin’s early success should proceed with caution. As the stories behind outfits like OneCoin and QuadrigaCX show, not every crypto startup is legitimate.
And here’s some more actionable advice:
Don’t discount cryptocurrency altogether.
Sure, there are lots of crypto scams out there – but plenty of outfits are actually trying to harness this revolutionary technology to change things for the better. Check out Plastic Bank, a crypto enterprise that’s tackling the problem of plastic pollution in our oceans. Plastic Bank rewards people in some of the world’s poorest communities for collecting plastic waste. Collectors receive digital money for every kilogram of plastic they “bank.”
October 24, 2021
"If this book can save just one person from losing their money to a scam, crypto or non, then it has done a good thing".
What a an absolute journey into the Wild West of crypto from conception to modern day. Wear your seatbelt because it's a bumpy ride. Erica Stanford is an incredibly knowledgable individual who can outline the intricacies of block chain currencies in layman's terms and really breakdown how 98% of every Initial Coin Offering (ICO) has been a scam from day one. She delivers hilarious and heartbreaking case studies without boring the individual or gatekeeping the information behind industry terms.
In all honesty, I don't follow crypto nor have I ever been aware about the regulations surrounding it's existence in the past but it's truly fascinating and has fuelled an interest in learning more. There will always be scams and the best defence is preparation. Additionally, the book didn't present a one-sided doomsday piece, but a factual history. It very clearly highlighted the many benefits and real-life value of blockchain in a world where printed money is less valuable than toilet paper in some countries. The only catch is that an entirely non-regulated system won't help anyone if there are bad-will actors involved.
Finally, I just want to say that I absolutely died at the portion about John McAfee and 'the dickening'. For anyone who has ever used McAfee virus protection, or simply knows the name, you NEED to learn what he's been up to in the crypto world. It's literally not believable and yet it's true. I'm just hoping he prints a memoir at some point.
Thank you to NetGalley for the enlightening and valuable ARC.
What a an absolute journey into the Wild West of crypto from conception to modern day. Wear your seatbelt because it's a bumpy ride. Erica Stanford is an incredibly knowledgable individual who can outline the intricacies of block chain currencies in layman's terms and really breakdown how 98% of every Initial Coin Offering (ICO) has been a scam from day one. She delivers hilarious and heartbreaking case studies without boring the individual or gatekeeping the information behind industry terms.
In all honesty, I don't follow crypto nor have I ever been aware about the regulations surrounding it's existence in the past but it's truly fascinating and has fuelled an interest in learning more. There will always be scams and the best defence is preparation. Additionally, the book didn't present a one-sided doomsday piece, but a factual history. It very clearly highlighted the many benefits and real-life value of blockchain in a world where printed money is less valuable than toilet paper in some countries. The only catch is that an entirely non-regulated system won't help anyone if there are bad-will actors involved.
Finally, I just want to say that I absolutely died at the portion about John McAfee and 'the dickening'. For anyone who has ever used McAfee virus protection, or simply knows the name, you NEED to learn what he's been up to in the crypto world. It's literally not believable and yet it's true. I'm just hoping he prints a memoir at some point.
Thank you to NetGalley for the enlightening and valuable ARC.
August 23, 2022
The book is about an interesting and challenging subject, cryptocurrency, and the opportunity to disrupt the banking and fiat money landscape. The main problem is the innumerable crypto scams that arise, and the book tries to address that problem. The leading issue with the book is that's poorly written and full of overstatements, which makes it untrustworthy. While she tries to make her point she doesn't provide any support for the stories she tries to develop. Let's see some examples. The wording "out of thin air" is used, and overused, all over the book to explain a few things, there are better ways to express the same idea, without using in every paragraph "out of thin air." I counted 20+ times used just in the first chapters. In Chapter 2 she has a new motto "In those days..." as if it were thousands of years in the past, in a wild world, and not something that happened in a civilized society less than a decade ago, and where scams are something that happens in a lot of social environments. The book gives examples of the scams in the crypto world, but to make a point she made the boldest claims without much sustain. For example, when talking about an ICO in Vietnam that raised $660 Mi from 32,000 investors, that's $20,000+ for each investor. Where in the world people in Vietnam would have that kind of money to expend on cryptos when the GDP per capita is $2,800? At all costs, she wanted to show that Crypto-world is the Wild West, but the book is poorly written that she didn't even finish the stories, just throwing example after example without developing the story or providing support for examples. Might be that the author is in her mid-twenties or early thirties and doesn't live long enough to develop a proper well-centered mind to put a coordinated thought in place, typical behavior of the"new teenagers" in the late twenties, that thinks that the world started yesterday and people before them no nothing about anything.
Like many journalists wanting to spicy their stories, she claims that people sell their homes, put all their savings, etc. in these scams, but never naming anyone. She like many journalists copycats these claims, even word by word, never pinpointing anyone, that descriptions, laking for support, makes what is really ponzi-scams an improbable story so no one truly believes. If she wouldn't use those bold copycat overstated stories the truth could have been believed. The book is so poorly edited that when you click on the links for further information just pop-ups the same paragraph. I would call this book "scam book of the scam cryptos" as it is poorly written and edited. In Chapter 4 she didn't have any idea about how investment funds work and pretend to explain the crypto world. I would have liked that a better-written book deals with this important subject of cryptocurrencies and the scams that unfortunately arise when a new disrupting technology appears.
I gave it two stars because the subject is interesting, but the book is poor.
Like many journalists wanting to spicy their stories, she claims that people sell their homes, put all their savings, etc. in these scams, but never naming anyone. She like many journalists copycats these claims, even word by word, never pinpointing anyone, that descriptions, laking for support, makes what is really ponzi-scams an improbable story so no one truly believes. If she wouldn't use those bold copycat overstated stories the truth could have been believed. The book is so poorly edited that when you click on the links for further information just pop-ups the same paragraph. I would call this book "scam book of the scam cryptos" as it is poorly written and edited. In Chapter 4 she didn't have any idea about how investment funds work and pretend to explain the crypto world. I would have liked that a better-written book deals with this important subject of cryptocurrencies and the scams that unfortunately arise when a new disrupting technology appears.
I gave it two stars because the subject is interesting, but the book is poor.
October 24, 2021
"If this book can save just one person from losing their money to a scam, crypto or non, then it has done a good thing".
What a an absolute journey into the Wild West of crypto from conception to modern day. Wear your seatbelt because it's a bumpy ride. Erica Stanford is an incredibly knowledgable individual who can outline the intricacies of block chain currencies in layman's terms and really breakdown how 98% of every Initial Coin Offering (ICO) has been a scam from day one. She delivers hilarious and heartbreaking case studies without boring the individual or gatekeeping the information behind industry terms.
In all honesty, I don't follow crypto nor have I ever been aware about the regulations surrounding it's existence in the past but it's truly fascinating and has fuelled an interest in learning more. There will always be scams and the best defence is preparation. Additionally, the book didn't present a one-sided doomsday piece, but a factual history. It very clearly highlighted the many benefits and real-life value of blockchain in a world where printed money is less valuable than toilet paper in some countries. The only catch is that an entirely non-regulated system won't help anyone if there are bad-will actors involved.
Finally, I just want to say that I absolutely died at the portion about John McAfee and 'the dickening'. For anyone who has ever used McAfee virus protection, or simply knows the name, you NEED to learn what he's been up to in the crypto world. It's literally not believable and yet it's true. I'm just hoping he prints a memoir at some point.
Thank you to NetGalley for the enlightening and valuable ARC.
What a an absolute journey into the Wild West of crypto from conception to modern day. Wear your seatbelt because it's a bumpy ride. Erica Stanford is an incredibly knowledgable individual who can outline the intricacies of block chain currencies in layman's terms and really breakdown how 98% of every Initial Coin Offering (ICO) has been a scam from day one. She delivers hilarious and heartbreaking case studies without boring the individual or gatekeeping the information behind industry terms.
In all honesty, I don't follow crypto nor have I ever been aware about the regulations surrounding it's existence in the past but it's truly fascinating and has fuelled an interest in learning more. There will always be scams and the best defence is preparation. Additionally, the book didn't present a one-sided doomsday piece, but a factual history. It very clearly highlighted the many benefits and real-life value of blockchain in a world where printed money is less valuable than toilet paper in some countries. The only catch is that an entirely non-regulated system won't help anyone if there are bad-will actors involved.
Finally, I just want to say that I absolutely died at the portion about John McAfee and 'the dickening'. For anyone who has ever used McAfee virus protection, or simply knows the name, you NEED to learn what he's been up to in the crypto world. It's literally not believable and yet it's true. I'm just hoping he prints a memoir at some point.
Thank you to NetGalley for the enlightening and valuable ARC.
July 6, 2021
Great book to read before investing in Crypto
Author is well-known in the world of FinTech (financial technology), blockchain and crypto. Crypto wars is well-researched and provides great insights in the sometimes murky world of crypto. Her detailed analysis of the ICO hype and the many scams is highly interesting and should be read by anyone thinking of investing into crypto-related projects. There's nothing wrong with crypto, just the scammers that are trying to take advantage of the current crypto boom. Read this book, be aware and well-informed. Highly recommended.
Author is well-known in the world of FinTech (financial technology), blockchain and crypto. Crypto wars is well-researched and provides great insights in the sometimes murky world of crypto. Her detailed analysis of the ICO hype and the many scams is highly interesting and should be read by anyone thinking of investing into crypto-related projects. There's nothing wrong with crypto, just the scammers that are trying to take advantage of the current crypto boom. Read this book, be aware and well-informed. Highly recommended.
April 7, 2022
Really accessible book about the world of crypto and the ridiculous amount of scams that happened during the height of the bubble.
I picked this up on a whim, the true crime fan in me drawn to the cover. The blurb and reviews on the back sealed the deal. I’d had The Missing Crypto Queen podcast on my ‘to listen’ list since it debuted but I’d never got round to it. Listening to that, and reading this has made for an interesting and enlightening few weeks.
I know nothing about crypto of technical hi tech stuff, but I didn’t need to read this book. I highly recommend it to anyone.
I picked this up on a whim, the true crime fan in me drawn to the cover. The blurb and reviews on the back sealed the deal. I’d had The Missing Crypto Queen podcast on my ‘to listen’ list since it debuted but I’d never got round to it. Listening to that, and reading this has made for an interesting and enlightening few weeks.
I know nothing about crypto of technical hi tech stuff, but I didn’t need to read this book. I highly recommend it to anyone.
June 16, 2022
Interesting dive into the crypto world. While I was aware of various scams I found this book very detailed regarding the how and why of certain crypto scams. However, I would have appreciated more info regarding the legitimacy and opportunity crypto and NFTs offer.
I do find this a useful, educational read and too many people dive into or don't invest in crypto because they do not have enough information. There is an amazing opportunity in crypto BUT you MUST know what you are doing.
I do find this a useful, educational read and too many people dive into or don't invest in crypto because they do not have enough information. There is an amazing opportunity in crypto BUT you MUST know what you are doing.
March 14, 2023
nhiều kiến thức hay về cryto, mô hình ponzi, marketing đa cấp, cách các vụ lừa đảo tiền crypto bào tiền nhà đầu tư vô tri. Nhưng mà lặp í nhiều quá, đọc đi đọc lại cứ nhắc hoài những ý đã nói từ những trang đầu tiên, thiết nghĩ tác giả nên viết các bài sau ngắn thôi, lượt giản hết mấy cái định nghĩa với mấy câu hù doạ lại thì đọc đỡ khó chịu hơn.
Nhưng kiến thức của cuốn này đem lại cho 1 đứa k biết 1 cái gì về crypto như mình là rất nhiều và ...[hy vọng là] bổ ích nha :)))
Nhưng kiến thức của cuốn này đem lại cho 1 đứa k biết 1 cái gì về crypto như mình là rất nhiều và ...[hy vọng là] bổ ích nha :)))
July 10, 2021
Around 2017 I did attend quite a few meetups on Blockchain on London. I also used to have an account on earn.com and used to get regular offers for crypto projects, I had quickly deduced they were all scams except Brave.
It was fascinating to read about how these scams were setup and executed. Really well researched book.
It was fascinating to read about how these scams were setup and executed. Really well researched book.
July 11, 2023
Well researched and easy to get through, though there’s some repetition after a while. With the exception of the final chapter, which is just ten pages long and highlights cryptocurrency’s potential for good, the entire book focuses on various scams and basically how untrustworthy and pointless most ICOs are. I don’t own any crypto and have no intention of investing after this. And why would I?
July 1, 2024
3.5/5 rounding down for Goodreads.
Basically just a book about various cryptocurrency frauds and Ponzi schemes. As someone with no skin in the game (I don’t know much about cryptocurrency or own any) I found the book to be accessible. The book was released in 2021 so any more recent frauds/scams are not included
Basically just a book about various cryptocurrency frauds and Ponzi schemes. As someone with no skin in the game (I don’t know much about cryptocurrency or own any) I found the book to be accessible. The book was released in 2021 so any more recent frauds/scams are not included
August 28, 2021
Very well-written and informative book. If you are new to this space, the book is a must-read.
May 3, 2022
I heard the summary of this book and even the summary wanst interesting for me.
February 2, 2023
Written for novices who understand very little about of cryptocurrency.
January 14, 2024
A good book to highlight the crypto frauds and red flags for fresh investors
August 11, 2024
Fun to read about all the scams
March 22, 2022
Not really about crypto currency. More about how many "get rich quick" scamers saw an opportunity. All the standard scams : pyramid selling (known as MLM in the book), Ponzi, "pump and dump" ....
If it's to good to be true, it probably is.
If it's to good to be true, it probably is.
August 3, 2021
Fantastic book. A fast paced rollercoaster ride charting the history of cryptocurrency. The book explains what it is and goes through how these (most often) scams work, how they’re made to look legit and how people profit from them because they steal investments away from those who are stupid and greedy. The book covers many different types of crypto including the now infamous ruja ignatova Ponzi scheme.
The book is very easy to read and I’d finished it in a couple of hours. Definitely one for those who have heard the podcast about the crypto queen on bbc sounds,
4/5
The book is very easy to read and I’d finished it in a couple of hours. Definitely one for those who have heard the podcast about the crypto queen on bbc sounds,
4/5
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