Unfortunately that won’t happen here because crypto folks are now learning what the rest of us already knew- that money is extremely highly regulated for a reason. There was a legal framework within which to prosecute Madoff and recover damages.
None of the scamming happening in crypto is even illegal. Pump-and-dump is written plainly into the mission statements of crypto companies. It is their stated business model. Nobody is even trying to hide it. Being independent of any borders, this may never get fixed. It may remain forever the financial chaos of the 1800s in crypto.
It’s hard to overstate the structural issues. A friend of mine knew a younger guy from his MBA program who did a full send on meme stocks in a year or two back with everything he could borrow/leverage. It worked out for him, but his backup plan was bankruptcy.
This was someone with a high level understanding of finance, who would probably get a job which pays in the top 10% pretty quickly. However, he saw it as his only chance to own property in Canada reasonably young, and that bankruptcy didn’t mean much as he didn’t have any assets to risk, and he could easily explain the economics of his game if it hadn’t of worked out.
With housing haven gotten even more out of reach even for top earners, I’m can’t really say what he did wasn’t a smart move. He knew there wasn’t real value and got out early and always had trailing stops/etc. It just points to horrible structural problems in the economy that gambling with bankruptcy when you don’t have assets looks like a sensible way to achieve a lifestyle that your parents had with mid-range earning jobs. It’s even more telling that an MBA program helped him come to this conclusion.
Really, it’s just a easier entry point to scams for the same people who became Uber drivers. Check out the “Uber Papers” on the Guardian et al in the past few days.
The damaging part of the whole scheme is not how it played out to “investors” getting hosed, but how cryptocurrency got securitized in the form of mutual funds and pawned off on institutional investors as secure investments. Entangling all that bullshit with the Nasdaq market and investors who may not have wanted anything to do with it. So yes amateur investors got burned. But so did professional ones and pretty much everyone, by proxy. Just like what happened with toxic mortgage debt from 2003-2008
I hear you. Typically at least for the last 20 years or so, toxic investments have been marketed to the mainstream by bundling them into securities and pawned off on larger institutional investors to diversify their portfolios.
Ratings/Risk Assessment agencies are all self-governing by the industry and thoroughly compromised.
““We’re seeing big players in Wall Street — like the traditional financial institutions, the endowments, the pension trusts — looking at this as a hedge against put from USD or fiat currencies,””
"if the finance industry writ large begins to view digital currencies as a more stable asset class this could change, potentially resulting in the same knock-on affect the housing market crash had during the Great Recession. "
I was apoplectic when I learned one of my pension funds invested heavily in crypto - and not early either. Can’t wait for the quarterly reports on this. There was a window to get in and get out… that closed a long time ago.
One of my brothers (who, thanks to his gf, has gone off the deep-end on facebook about vaccines and everything else), was trying to convince me and my other brother to invest in bitcoin. I’ll have to ask him how that’s worked out for him.
Fortunately(?) my little bro doesn’t have enough money to invest in anything, even if he wanted to, and I already ‘invested’ in bitcoin, by buying one when they were like £70 each. I’ve cashed it out several times over the years, and I think the dregs I have left are still worth more than £70.
