By : Another week, another breathless report about cryptocurrency fraud. Is this even news anymore?
On April 30, in the first quarter of 2019, compared to $1.7 billion fraud over the entirety of 2018.
If the pace continues, we’ll see almost $5 billion in cryptocurrency-related fraud this year.
That’s bad, guys. Really bad.
But before you wave the “crypto’s a scam” banner and starts looking for ways to get out of eating his d*ck, let’s put things in perspective.
Crypto Fraud Looks Like a Big Deal—But It’s Really Not
bitcoin-related scams are only a problem when you take them out of context. | Source: Shutterstock
First, $5 billion isn’t that much in the grand scheme of things.
It’s less than 3 percent of the entire cryptocurrency market. While that may seem like a lot, it’s smaller than . And it pales in comparison to the .
Second, cryptocurrency is almost totally unregulated. Does fraud affect only about 3% of an unregulated market? That’s all? If cryptocurrency is really so full of scams, shouldn’t it be higher?
Third, nobody knows whether the first quarter bump is a trend or not. Maybe fraud goes down the rest of the year?
Mainstream Press Got it Wrong (Again)
Here’s how the headlines should’ve read:
- Crypto Fraud High, Still Way Behind Credit Cards
- Outrage About $1.2 Billion Crypto Fraud Causes Grocers to Scream “What About Us?”
- Criminals Take Note: Cryptocurrency is Better Than Cash for Laundering Money. Use it!
When you look at the big picture, it’s silly to sensationalize cryptocurrency fraud but not other types of fraud.
Last year, scammers stole $3.4 billion from credit card companies through fake new accounts. That number doesn’t even include fraudulent charges.
Grocery theft is a little harder to pin down, but probably totals $4 billion in the U.S. alone, based on .
Those figures only include data from the U.S. Imagine the totals once you include the other 192 countries in the world.
Oh, and money laundering? The United Nations estimates more than using banks, cash, and shell companies.
Are bitcoin Scams Really That Much of a Problem?
Infamous Bitconnect Promoter Claims Victimhood, Says It Wasn’t His First Scammers
— CCN.com (@CCNMarkets)
Yes, of course. Scams – whether involving or not – can , and the industry should actively combat them.
But let’s not blow this out of proportion. All markets have scammers. If playas gonna play, scammers gonna scam.
Think of the good news: because of the transparency of blockchain, we know about these crimes. We might not know who has the money, but we know where it went. Sometimes, .
Grocers? Credit card companies? Victims of financial scams?
They’re SOL.
About the Author: Mark Helfman is a former U.S. Congressional aide and cryptocurrency commentator. He is regularly featured among the top-5 Quora writers worldwide for cryptocurrency and bitcoin topics. His book, Consensusland, explores the social, cultural, and financial challenges of a fictional country that runs on cryptocurrency. Catch him at .
Published at Sat, 04 May 2019 13:19:15 +0000
