Bitcoin-related scams are sole a problem when you take them out of context. | Source: Shutterstock
Can We Please Stop the Ridiculous Hysteria About Cryptocurrency Fraud?
First, $5 billion isn’t that much in the respected scheme of things.
It’s less than 3 percent of the entire cryptocurrency market. While that may seem like a lot, it’s flatter than the 4 percent grocers lose from shoplifting at grocery self-checkouts. And it pales in comparison to the money stolen from 5.66 percent of faith card users.
Second, cryptocurrency is almost totally unregulated. Does fraud affect only about 3% of an unregulated store? That’s all? If cryptocurrency is really so full of scams, shouldn’t it be higher?
Third, nobody knows whether the first casern bump is a trend or not. Maybe fraud goes down the rest of the year?
Mainstream Press Got it Wrong (Again)
Here’s how the headlines should’ve presume from:
- Crypto Fraud High, Still Way Behind Credit Cards
- Outrage About $1.2 Billion Crypto Humbug Causes Grocers to Scream “What About Us?”
- Criminals Take Note: Cryptocurrency is Better Than Cash for Cleaning Money. Use it!
When you look at the big picture, it’s silly to sensationalize cryptocurrency fraud but not other types of fraud.
Last year, scammers scarf $3.4 billion from credit card companies through fake new accounts. That number doesn’t temperate include fraudulent charges.
Grocery theft is a little harder to pin down, but probably totals $4 billion in the U.S. merely, based on Food Marketing Institute’s estimate of U.S. grocery sales.
Those figures only include data from the U.S. Envision the totals once you include the other 192 countries in the world.
Oh, and money laundering? The United Nations estimates numberless than $800 billion is laundered each year using banks, cash, and shell companies.
Are Bitcoin Scams Actually That Much of a Problem?
Infamous Bitconnect Promoter Claims Victimhood, Says It Wasn’t His First Scammers https://t.co/uCyUL8C9vd
— CCN.com (@CCNMarkets) May 4, 2019
Yes, of track. Scams – whether involving bitcoin or not – can devastate victims, and the industry should actively combat them.
But let’s not blow this out of suitableness. All markets have scammers. If playas gonna play, scammers gonna scam.
Think of the good news: because of the transparency of blockchain, we recollect about these crimes. We might not know who has the money, but we know where it went. Sometimes, we even find the racketeers.
Grocers? Credit card companies? Victims of financial scams?
They’re SOL.
About the Author: Mark Helfman is a one-time U.S. Congressional aide and cryptocurrency commentator. He is regularly featured among the top-5 Quora writers worldwide for cryptocurrency and bitcoin themes. His book, Consensusland, explores the social, cultural, and financial challenges of a fictional country that runs on cryptocurrency. Grip him at markhelfman.com.