I think Molly kinda buried the lede here which is that crypto companies and influencers explicitly encouraged people to invest money they could not afford to lose. The crypto "community" need to own up to this.
Also people lie to get your money, that includes "celebrities" and companies.
*Most of the time you don't have idea if you talk to(or receive information from) real person, some hacker who hijacked their account, a program pretending to be a human(from emacs doctor to gpt3 and beyond), etc.
That is indeed buried relative to many other points
Lots of folks online saying that crypto is the only way to beat inflation. We both know that's bullshit, but with so many people huffing the laughing gas, it's easy to get taken in, especially with influencers and the Crypto.com Stadium et al.
It just seems like a perfect storm of massive hype, a lot of very convincing marketing, and the wind blowing in the right direction between a pandemic, Brexit, war, and a possible recession.
When desperate, and many big names are involved, it can obviously look quite seductive. Used to work in this predatory niche about 7 years ago. Never again.
This also applies to my parents' generation, who grew up primarily subsistence farmers. They don't understand finances or markets or anything like crypto. They understand business investment as mutual actions of trust, where they lend their neighbor money and their neighbor buys something to benefit the town. Cryptocurrency hijacks those avenues of business investments by forming parasocial bonds and fake communities.
Exactly. The crypto promoters built a community, acted trustworthy, and then they exploited it for an affinity scam.[1] The promoters gave the impression they were on your side. They weren't.
Just like Madoff.
If someone borrows against their home to try to double their money in stock trading or the casinos, were they exploited by Wall Street or Las Vegas?
Actually, yes. There are laws regulating loans for the purchase of securities. Most jurisdiction ban lending for gambling.
2. This doesn't address the point of where the coercion was involved to make this "exploitation".
[0] https://www.lendingtree.com/home/home-equity/home-equity-inv....
[1]https://www.thebalance.com/can-i-invest-in-stocks-with-a-hom...
How is Wall Street exploiting them in this case? It sounds like they are committing some sort of fraud (perhaps even criminal?) against the lender by breaking the terms the loan by investing in speculative assets.
It’s considered one of the worst ways to use home equity, but it’s absolutely legal for all parties involved
> The crypto "community" need to own up to this.
Whatever that means
It's like when the tobacco industry sponsored ads to "prevent kids from smoking" while investing millions in targeting them anyway.
And look, I'm not defending the current banking system. Should average people have no options while the wealthy can use complex derivatives to increase their wealth and power? Probably not. I'm just pointing out that the crypto world shouldn't be doing this specific thing.
And as you mention in the second part, it is a very difficult and tricky balance between protecting retail traders while preventing them access to instruments that the wealthy can use to further increase wealth.
As an example, it used to be that USA-based customers could leverage trade (short trade or margin leverage long trade) on crypto exchanges, for example Kraken. However, due to regulatory pressure, Kraken now requires registering as an Eligible Contract Participant in order to margin/leverage trade - the key requirement being proof of $10M in discretionary assets.
On one hand, this is probably a net "good" - short trading or leveraged long trades are _extremely_ risky, with the former having infinite loss potential and the latter resulting in margin calls or a greater loss than the account is worth (i.e. you're in debt to the exchange). I have little doubt that retail traders would've lost more money were this restriction not in place.
On the other hand, this reeks of "you must be this rich to enter; peons need not apply". A wealthy person can 66
Crypto is magic made fantasy up numbers. At least with baseball cards, you get a baseball card.
This wasn't Jim Cramer or some vetted CNBC talking head talking P/E ratios or future earnings potential.
These are carefully-engineered social media accounts with follower counts blown up by obvious market-engineering campaigns.
Again, to OP's point, if you're putting your life savings into speculative investment X, from the word of a rando instagram "influencer", you get what you deserve. Anybody in 2022 who doesn't understand that most social media presences are carefully curated, engineered, and biased, is a fool.
Live or die by the word of the shoeshine boy, it's a tale as old as time. We all learned of 1637 and 1929 in high school history. If you didn't pay attention, that's on you.
What if someone says to take some drug 'because it's safe' - when it's not?
I say let the lawsuits begin.
Or better yet, have some kind of basic regs.
Whenever anyone talks about 'health' or 'finance' in the commons, they had better be very clearly indicating that 'they don't know what the F they are talking about' and that people ought to 'talk to a doctor/accredited financial advisor' first and that 'following this advice could lead to illness/bankruptcy' etc..
I would love to see theses turds have to follow the same regs drug companies do: "This diarrhea medicine may cause X, Y, Z and A, B, C etc."
Well it depends on who it is (which goes back to personal responsibility). If I'm taking drugs that my barber recommended I deserve the same fate as if I buy the stocks or crypto he recommended.
The guy saying 'sell your home to buy BTC' is one such person.
We need credible groups and institutions.
>The guy saying 'sell your home to buy BTC' is one such person.
Almost nobody did that though. Which means 99.99999999% of people saw that to be bad advice and acted accordingly. For the handful who decided it was a great idea, that's on them. We don't need to regulate the speech of everyone to protect the biggest idiots from themselves.