Gian Luca COMANDINI is part of the blockchain task force created by the Italian government and is the owner of the Cointelegraph.it website, which is a cryptocurrency bible for many Italians. An expert, who made his fortune on Bitcoin, is very pessimistic about the future fate of almost all virtual currencies. He shared his thoughts in an interview with the Italian edition of Il Fatto Quotidiano:
“The bubble is growing and will explode, as happened with the dotcoms at the beginning of the millennium.”
As an example, the expert gives the story of the cryptocurrency Bitcoiin2Gen: today it's rubbish, but by 2017 its launch was accompanied by an advertising campaign, fronted by Steven SEAGAL. The US Federal Securities and Exchange Commission (SEC) fined the actor at the end of February, as he collected $ 1 mln for advertising without notifying investors. Many fraudulent schemes work this way.
According to estimates of the Cypher Trace organization, $4.15 billion were lost in 2019 as a result of cryptocurrency fraud. For comparison, in 2018, 618 mln dollars disappeared. The fraudulent mechanism is built on the "classic" scheme of the financial pyramid. The fraudster offers investments with fantastic incomes, hoping that the unlucky investors will attract several more potential clients.
However, money is not invested anywhere but stolen. The pioneering investor, meanwhile, collects a small amount received from the fraudster, at the expense of another victim of fraud. And so on ad infinitum. Under this scheme, Bernie Madoff sprayed 65 billion dollars. A similar trick works with cryptocurrencies. Cypher Trace talks about three episodes: Bitclub Network, OneCoin and Einstein Exchange. In the case of the Bitclub Network, investors lost $ 722 million. New Jersey State Court accuses site owners Matthew Brent Goettsche and Jobadiah Sinclair Weeks of fraud. They face 20 years in prison.
Over the past 2 years, Italian law enforcement agencies have received 700 allegations of fraud with cryptocurrencies. This means that fraudulent operations are performed almost every day. Although the amount of stolen funds is still relatively small, only 27 thousand euros.
To protect yourself from fraud, you must follow basic precautions: do not give consent to financial transactions with dubious or false call centers and check the sites for official permission to operate with cryptocurrencies issued by the Italian Supervisory Banking Authority (CONSOB).