Keeping Up With The Cryptos
Here’s part 1 of 3 articles taken from a fantastic write-up on emerging challenges with Cryptocurrencies, blockchain and distributed ledger technologies from a Federal Receiver’s perspective.
Keeping Up With The Cryptos, Cryptocurrencies Likely The Best Fraud Show in 2018 (part 1)
by S. Gregory Hays1
Charles Ponzi, the notorious fraudster, was always the showman and loved the spotlight. In his last interview before his death in 1949, he told a reporter:
Even if they never got anything for it, it was cheap at that price. Without malice aforethought, I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over.
With last year’s dramatic price increases and this year’s decline coupled with rampant fraud, the cryptocurrency market may be the “best fraud show” to watch in 2018. When I started drafting this article in early January, the price of Bitcoin was around $16,000 and the price at the time of publication on 2/12/18 is approximately $9,000, a 50% decline this year. The total market cap of all cryptocurrencies fluctuated by almost $560 billion between January 1st and February 12th. The cryptocurrency story changes every day with new developments and rumors from around the world. Given the fraud and speculation, it is important for receivers to understand cryptocurrencies as regulators introduce new regulations and pursue the fraudsters and tax cheaters.
A few interesting and alarming cryptocurrency data points as of February 12, 2018 are summarized below. These figures, which change daily, are based on currently available sources referenced herein to provide a point of reference to provide an overview of the market: