The Mission portfolio team is not fond of cryptocurrency for many reasons. Basically, the cryptocurrency world is full of fraud—from the false allure and promise of Ponzi schemes, to poor security for crypto “wallets,” to “rug-pulls.”
The latter (derived from the expression “pull the rug out from under you”) has become a popular scam in which a crypto developer entices investors with a new token, then disappears with millions or even hundreds of millions of dollars, according to a March 2022 article in Fortune. The article notes: “This particular type of fraud accounted for $2.8 billion in lost money for victims, or 37 % of all cryptocurrency scam revenue in 2021.”
This recent article from the Federal Trade Commission (*see link below) highlights features of cryptocurrency that attract scammers:
“There’s no bank or other centralized authority to flag suspicious transactions and attempt to stop fraud before it happens. Crypto transfers can’t be reversed – once the money’s gone, there’s no getting it back. And most people are still unfamiliar with how crypto works.”
The FTC article also shares an unusual, but useful, caveat:
“Never mix online dating and investment advice.”
Romance scams are taking full advantage of online relationships by exploiting emotional vulnerability. If your online love interest is chatting up cryptocurrency, consider applying the brakes and heading for the nearest exit.
If you already own or have considered speculating in cryptocurrency or non-fungible tokens (NFTs), protect yourself by becoming familiar with this curated, current list of crypto and NFT frauds and disasters: www.Web3IsGoingGreat.com.