In spite of the countless changes in globalization and technology, there is still a lingering issue: If an investment is booming, scammers will devise new methods to swindle investors. Consequently, this is so with cryptocurrency, which is more and more the target of swindlers. The most current incident is the alleged hacking of Japan’s cryptocurrency exchange Coincheck. It was reported that hackers made off with over 400 million dollars in digital currencies, this has made it the current biggest robbery in virtual currency.
On the 29th of January, Japan’s government stated that they will penalize Coincheck following an attack on the Tokyo-based organization where hackers made off with digital assets worth millions of dollars from the firm.
As Coincheck assured their customers that they will validate meaningful changes to their system with the hopes of regaining their customer’s trust, regulators and critics worldwide remain on alert.
Recently, the Securities and Exchange Commission closed down ICO that the agency (International Coin Offering) targets retail traders to support a new decentralized bank.
Co-founders of AriseBank, Stanley Ford and Jared Rice Sr. apparently offered and traded unregistered assets in their professed “AriseCoin” cryptos by portraying the bank as a unique decentralized bank which gives many consumer-facing banking services and products using over 700 distinct digital currencies according to SEC. AriseBank alleged that it created algorithmic exchange software that spontaneously trades in several cryptocurrencies.
Right now, a regulated bank that operates heads on in trade operations such as holding or selling cryptos doesn’t exist. This may transform if regulators find a technique to regulate the unruly cryptomarket.
While the plan and notion of cryptocurrency and the tools backing blockchain is a great idea, digital currency is a decentralized banking. Bitcoin is only connected to the software which is why it’s difficult to ascertain who is trading the coin and why. Bitcoin has an unusual craze and devotion from people who trade the coin; this may be as a result of the irrational enthusiasm propelling its value and price.
New York Times columnist, Paul Krugman stated that there has been a 40% decrease in the value of Bitcoin over recent past. He also indicated that if cryptos were a real currency, it will be the corresponding value of an 8,000% yearly inflation rate. Furthermore, Bitcoin’s free nature has made it highly vulnerable to market alterations.
Like any investment, investors and traders who are not aware of what they are investing will suffer. The following are some precautions from the SEC:
- Investors should carry out appropriate research and take note of the information on social networking websites; company’s website and blogs may be wrong and misleading. Be guarded and careful about stock marketing campaigns such as ICOs.
- Some organizations are not mandated to log statements with the SEC. These organizations are termed “non-reporting”. Therefore, investors should note the dangers of exchanging the stock of these organizations.
- If a particular crypto is lodged, you will discover a Form S-1 or registration statement on SEC.gov via EDGAR.
Overall, carry out necessary research. Various technologies and tools will make digital currencies a practical option to a defective banking system. Though, it’s difficult to tell which cryptocurrency will thrive, hence, protecting yourself is important.