(Natural News) Mainstream media giant The New York Times (NYT) recently covered a series of problems with cryptocurrency that have risen to the surface ever since Bitcoin suffered through a 60 percent drop in value after reaching all-time highs of around $20,000 per “coin” back in December.
Many of these problems we’ve highlighted here at Natural News, but now the corporate media is finally bringing these things to light as well. The NYT points to multiple hacking incidents, Ponzi schemes, and government regulatory wrangling that, according to some, seems to be tightening the noose around the cryptocurrency boom.
“Signs of trouble have appeared at nearly every level of the industry, from the biggest exchanges to the news sites and chat rooms where the investment frenzy has been discussed,” writes NYT journalist Nathaniel Popper.
The two primary financial regulatory agencies in the United States, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), are both set to testify before the Senate banking committee about what they’re doing to “police” the virtual currency markets. Multiple cases have already come forward, Popper says, but neither agency has made very much headway in addressing them.
While such problems are inherent to any new industry, such as was the case when the “dot-com” boom first began, crypto critics are taking a hardline stance against digital currencies like Bitcoin that they say are facilitating more “bad behavior” than normal.
“Cryptocurrencies are almost a perfect vehicle for scams,” says Kevin Werbach, a professor at the University of Pennsylvania’s Wharton School, as quoted by the NYT.
“The combination of credulous buyers and low barriers for scammers were bound to lead to a high level of fraud, if and when the money involved got large. The fact that the money got huge almost overnight, before there were good regulatory or even self-regulatory models in place, made the problem acute.”
Regulators must be open-minded about the future of cryptocurrencies, while also being aggressive towards potential scams
Because cryptocurrencies are still so new, and operate on an international scale, keeping tabs on them for the protection of traders is difficult, according to Jay Clayton, chairman of the SEC, and J. Christopher Giancarlo, his counterpart at the CFTC. Clayton is on record as stating that regulators need to be “nimble and forward-looking” when it comes to dealing with them, as opposed to simply trying to shut them down as countries like India and China seem to be in the process of doing.
At the same time, regulators need to be aggressive against cryptocurrency scams like BitConnect, for instance, which had a large portion of its exchange forcibly shut down in recent weeks after it was discovered that the company was running a shady Ponzi scam.
Another Ponzi scheme that the CFTC shut down back in January, known as My Big Coin, had reportedly bilked users out of about $6 million. There are even Ponzi cryptocurrencies like one known as “Proof of Weak Hands Coin” that actually branded itself as such – and was still able to raise more than $800,000 before hackers broke into the system and drained all of its funds.
This is all part of the scenario that Mike Adams, the Health Ranger, predicted in his annual rundown of predictions for 2018. Adams warned about major cryptocurrency crackdowns in which government agencies like the SEC and CFTC would likely go after these schemes and make public examples of them in order to deter people away from using crypto.
“2018 will be the year that central banks begin to fight back against the growing phenomenon of cryptocurrency,” Adams wrote back in December. “Manipulating the crypto markets is child’s play for the central banks, which will no doubt engineer a panic selloff or cyber attack on the blockchain as a means to destroy the credibility of crypto in the minds of the public.”
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