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CFTC complain links: http://www.cftc.gov/PressRoom/PressReleases/pr7675-18#PrRoWMBL http://www.cftc.gov/PressRoom/PressReleases/pr7675-18#PrRoWM... http://www

CFTC complain links: http://www.cftc.gov/PressRoom/PressReleases/pr7675-18#PrRoWMBL http://www.cftc.gov/PressRoom/PressReleases/pr7675-18#PrRoWM... http://www.cftc.gov/PressRoom/PressReleases/pr7674-18#PrRoWMBL http://www.cftc.gov/PressRoom/PressReleases/pr7674-18#PrRoWM... Second fraud is very common on bitcointalk. Many people who have gotten rich off bitcoin or other cryptocurrencies don't know how to spread their risk. They are not exactly investment savvy. So they routinely fall for fraudsters claiming to be expert investors. These fraudsters solicit coins to be converted to fiat and then invested in real estate or some other commodity. This obviously is a bad idea because if you give say 1 BTC @ 10k USD, two things can happen: a. BTC price increases to 15k USD. Now the fraudster needs to pay back 50% more in USD. So, the fraudsters routinely come back claiming the investment was a bust or they got hacked. b. BTC price decreases to 8k USD. Now fraudsters need to pay 20% less. So they will come back claiming some family emergency and paying back all outstanding BTC obligations. And I have tried explaining it to people on the forum only to be drowned with "This is FUD" posts.

IIAOPSW 9y ago
I know saying this makes me unpopular, but I think maybe the best solution is to just leave things unregulated and let dumb money get burnt. The "this is FUD" crowd will never learn their lesson if the people teaching them get prosecuted. If someone wants to loose money on blatant scams with many warning signs, I say let them. If I want to take my life savings and put it all on red, that's my prerogative.
- JumpCrisscross 9y ago
  > I think maybe the best solution is to just leave things unregulated and let dumb money get burnt There are a lot of unsophisticated "investors" who cannot differentiate investing from gambling. We have experience with extra-systemic irrational exuberance. Too light-tough and the risks contaminate broader markets, thus fomenting a crisis. Too heavy and the risks go underground. There they (a) fuel broader criminality and/or (b) metastasize into the broader markets, thus fomenting a crisis. A strategy focussing on three things emerges from the literature: 1. Stomp out obvious, easy-to-enforce-against fraud. This keeps regulators engaged, helps keep everyone wary and removes fuel from the fire. 2. Monitor lending channels. In the late stages of a bubble, the devoted few will borrow to buy. Run properly, this transfers wealth from them to those exiting. What you don't want is for said zealots to re-transfer their risk to lenders e.g. by buying on a credit card. 3. Support prudent, de-leveraging instruments used by sophisticated investors. You want a controlled place where the smart money can slowly exert countervailing pressure without causing a panic. Bitcoin futures, which encourage sober shorting while causing the effects of a bad bet to come home to roost every day, are a good example. The best general-use analog I've found for bubble control is riot control, some principles of which are described in this video [1]. [1] https://www.youtube.com/watch?v=yT9bit2-1pg https://www.youtube.com/watch?v=yT9bit2-1pg
- buahahaha 9y ago
  It is theft. It's not a scheme, or a game, or a trick. They are stealing money. It needs to be made punishable. As these frauds get more sophisticated, it won't just be "dumb" money getting burnt. The answer to "someone stole this from me" isn't "well you shouldn't have been so dumb" - whether it is your wallet, a package from your doorstep, or a bit. Theft is theft.
  - Retric 9y ago
    If someone takes a pallet of hundreds sitting in the open on the back of a truck. It's reasonable to say: "Take reasonable precautions, temping targets promote crime." Bitcoin forums are filled with people that are both incompetent and well off, that's going to attract sharks. For similar reasons Google brought in investment advisers pre IPO to educate staff that where about to become targets. PS: That's not to say any form of theft is ok. Just locked doors keep people honest and let police focus on more important things.
    - candu 9y ago
      If someone takes a pallet of hundreds sitting in the open on the back of the truck, and it doesn't belong to them, it still meets the legal definition of theft. It might not be the best idea to leave it there, but that doesn't magically absolve the thief of legal responsibility. This example isn't even one of those murky ethical grey areas around property (see: copyright law extensions, squatters' rights, medieval concepts of hunting rights, privatization of public resources, farmers' rights to re-grow seeds, etc.) - it's out-and-out theft.
      - Retric 9y ago
        I completely agree. However, a large chunk of society would take it even if they had never stolen anything before and did not intend to commit a crime that day. PS: Look up Duty of Care, people can share responsibility even if a third party is commuting a crime. Placing a 10 lb solid gold statue on your roof and advertising this is is not just negligent, but flat out dangerous.
- kartan 9y ago
  > If someone wants to loose money on blatant scams with many warning signs, I say let them. I find this an abhorrent behavior that predates the uneducated. We have failed as a society to provide some people, actually a lot of people, with a good education. That people has a hard time defending themselves. Your solution to our failure is to let them being victims of scammers as punishment for being born with a lack of resources. This is not only morally wrong but even from a purely utilitarian perspective only creates an incentive for companies to move from normal business to legalized scam practices. > I know saying this makes me unpopular Take this as constructive feedback. This way of starting your comment creates the same kind of feeling than starting your sentence with "I'm not racist but...". It doesn't add anything to the conversation and it looks like you are trying to excuse something that yourself find wrong to start with.
  - pjc50 9y ago
    Quite a lot of these people are the very old, many of whom had a good education with which they earned their money; but time and dementia leads people into accepting terrible investment scams.
- vkou 9y ago
  I think the best solution to property crime is to leave things unregulated, and leave people too dumb, slow, and weak to defend themselves and their property get robbed. Why should the rest of society pay for their inability to protect themselves? I've got mine. (As soon as this becomes policy, I'll be looking for, ah, business partners.)
- runeks 9y ago
  There’s a huge difference between blatant fraud, and not registering as a “Commodity Pool Operator” with the CFTC. I can see the argument for allowing people to use unregulated services, but legalizing fraud and misrepresentation seems like insanity to me. Imagine buying anything in a market where fraud is legal... you’d never know what you’re actually buying.
- empath75 9y ago
  There’s enough dumb money to threaten the economy with scams like these.
- 21 9y ago
  > If I want to take my life savings and put it all on red, that's my prerogative. A guy famously did that: https://www.youtube.com/watch?v=zGCdBsOIKYA https://www.youtube.com/watch?v=zGCdBsOIKYA
- ataggart 9y ago
  I find it curious that when someone suggests leaving an area of human action unregulated (i.e., not _a priori_ restricting otherwise non-criminal acts), others rush to read that as allowing crimes such as fraud to go unprosecuted.
Animats 9y ago
The scams described are common financial scam types. These are standard CFTC actions that happen to apply to cryptocurrencies. Look for actions involving more ICOs. The SEC and CFTC are mostly reactive; people send in "they stole my money" complaints, and those get processed. The regulatory actions happen after people lose money.

IIAOPSW 9y ago

I know saying this makes me unpopular, but I think maybe the best solution is to just leave things unregulated and let dumb money get burnt. The "this is FUD" crowd will never learn their lesson if the people teaching them get prosecuted. If someone wants to loose money on blatant scams with many warning signs, I say let them. If I want to take my life savings and put it all on red, that's my prerogative.

JumpCrisscross 9y ago
> I think maybe the best solution is to just leave things unregulated and let dumb money get burnt There are a lot of unsophisticated "investors" who cannot differentiate investing from gambling. We have experience with extra-systemic irrational exuberance. Too light-tough and the risks contaminate broader markets, thus fomenting a crisis. Too heavy and the risks go underground. There they (a) fuel broader criminality and/or (b) metastasize into the broader markets, thus fomenting a crisis. A strategy focussing on three things emerges from the literature: 1. Stomp out obvious, easy-to-enforce-against fraud. This keeps regulators engaged, helps keep everyone wary and removes fuel from the fire. 2. Monitor lending channels. In the late stages of a bubble, the devoted few will borrow to buy. Run properly, this transfers wealth from them to those exiting. What you don't want is for said zealots to re-transfer their risk to lenders e.g. by buying on a credit card. 3. Support prudent, de-leveraging instruments used by sophisticated investors. You want a controlled place where the smart money can slowly exert countervailing pressure without causing a panic. Bitcoin futures, which encourage sober shorting while causing the effects of a bad bet to come home to roost every day, are a good example. The best general-use analog I've found for bubble control is riot control, some principles of which are described in this video [1]. [1] https://www.youtube.com/watch?v=yT9bit2-1pg https://www.youtube.com/watch?v=yT9bit2-1pg
buahahaha 9y ago
It is theft. It's not a scheme, or a game, or a trick. They are stealing money. It needs to be made punishable. As these frauds get more sophisticated, it won't just be "dumb" money getting burnt. The answer to "someone stole this from me" isn't "well you shouldn't have been so dumb" - whether it is your wallet, a package from your doorstep, or a bit. Theft is theft.
- Retric 9y ago
  If someone takes a pallet of hundreds sitting in the open on the back of a truck. It's reasonable to say: "Take reasonable precautions, temping targets promote crime." Bitcoin forums are filled with people that are both incompetent and well off, that's going to attract sharks. For similar reasons Google brought in investment advisers pre IPO to educate staff that where about to become targets. PS: That's not to say any form of theft is ok. Just locked doors keep people honest and let police focus on more important things.
  - candu 9y ago
    If someone takes a pallet of hundreds sitting in the open on the back of the truck, and it doesn't belong to them, it still meets the legal definition of theft. It might not be the best idea to leave it there, but that doesn't magically absolve the thief of legal responsibility. This example isn't even one of those murky ethical grey areas around property (see: copyright law extensions, squatters' rights, medieval concepts of hunting rights, privatization of public resources, farmers' rights to re-grow seeds, etc.) - it's out-and-out theft.
    - Retric 9y ago
      I completely agree. However, a large chunk of society would take it even if they had never stolen anything before and did not intend to commit a crime that day. PS: Look up Duty of Care, people can share responsibility even if a third party is commuting a crime. Placing a 10 lb solid gold statue on your roof and advertising this is is not just negligent, but flat out dangerous.
kartan 9y ago
> If someone wants to loose money on blatant scams with many warning signs, I say let them. I find this an abhorrent behavior that predates the uneducated. We have failed as a society to provide some people, actually a lot of people, with a good education. That people has a hard time defending themselves. Your solution to our failure is to let them being victims of scammers as punishment for being born with a lack of resources. This is not only morally wrong but even from a purely utilitarian perspective only creates an incentive for companies to move from normal business to legalized scam practices. > I know saying this makes me unpopular Take this as constructive feedback. This way of starting your comment creates the same kind of feeling than starting your sentence with "I'm not racist but...". It doesn't add anything to the conversation and it looks like you are trying to excuse something that yourself find wrong to start with.
- pjc50 9y ago
  Quite a lot of these people are the very old, many of whom had a good education with which they earned their money; but time and dementia leads people into accepting terrible investment scams.
vkou 9y ago
I think the best solution to property crime is to leave things unregulated, and leave people too dumb, slow, and weak to defend themselves and their property get robbed. Why should the rest of society pay for their inability to protect themselves? I've got mine. (As soon as this becomes policy, I'll be looking for, ah, business partners.)
runeks 9y ago
There’s a huge difference between blatant fraud, and not registering as a “Commodity Pool Operator” with the CFTC. I can see the argument for allowing people to use unregulated services, but legalizing fraud and misrepresentation seems like insanity to me. Imagine buying anything in a market where fraud is legal... you’d never know what you’re actually buying.
empath75 9y ago
There’s enough dumb money to threaten the economy with scams like these.
21 9y ago
> If I want to take my life savings and put it all on red, that's my prerogative. A guy famously did that: https://www.youtube.com/watch?v=zGCdBsOIKYA https://www.youtube.com/watch?v=zGCdBsOIKYA
ataggart 9y ago
I find it curious that when someone suggests leaving an area of human action unregulated (i.e., not _a priori_ restricting otherwise non-criminal acts), others rush to read that as allowing crimes such as fraud to go unprosecuted.

Animats 9y ago

The scams described are common financial scam types. These are standard CFTC actions that happen to apply to cryptocurrencies. Look for actions involving more ICOs. The SEC and CFTC are mostly reactive; people send in "they stole my money" complaints, and those get processed. The regulatory actions happen after people lose money.