Quote from: distinct_user on July 13, 2017, 08:27:17 PM

Key: CC = Cryptocurrency

What are people's thoughts on the potential criminal use of cryptocurrency?

(I am not talking about the anonymous spending of cryptocurrency, like buying stuff off the dark web, but more so the utilisation of the currency and market, to perform fraud.)

Technically, it isn't even a crime (Yet.)

It has come to light recently that certain CC YouTubers have been shilling CCs for a fee. E.G. they could be paid a hefty sum, to promote a worthless or shifty CC. A currency they would not promote if it wasn't in their best financial interest. This could cause in an increase in potential CC price by unsuspecting victims to invest in the promoted CC, for the big players to sell-off when at a high, for all other victims to lose a significant amount.

In stock trading, this is Fraud. The scheme is actually called a 'Pump-and-dump' scheme. This is where you promote a stock through deceit and exaggeration, the stock rises exponentially. Then the original investor in the stock, sells off their large portion of shares and all other investors take a hit.

Now, you may be thinking "If an investor doesn't do the research themselves beforehand, it is their own fault." I understand what you are saying. However, it is not just YouTubers...

The biggest people to gain from Fraud are people or even organisations with very large amounts of money to invest in already. What is stopping an equity firm from hiring a tech team to develop a cryptocurrency, giving a portion of the coins to the equity firm and then the equity firm paying for advertisers of the currency? Then to eventually sell off after the ICO? Hell, i have even seen Facebook Ads for the new amazing 'Cryptocurrency' E.G. "You seen how fast Ethereum went from $40 to $160 in just one day, invest in 'X' now and it could be the same!"

Furthermore, this is all just 1 scheme. I'm not a Stock Broker, but i do have a police-related Degree and i'm well aware of different criminal methods that could be performed with CCs. Let me tell you, there is tons of different financial strategies which could be going on, especially by big players and i imagine IS going on.

My main concern though is, WHO is doing it? Just think about it; if it's not illegal, why wouldn't the already millionaires, equity firms and banks (etc), take advantage of CCs and the volatile market. Which defeats the purpose of decentralisation.

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Please note, this is not to discourage CC. I am a recent miner and investor of CC myself. This is just to get people's thoughts on the 'criminal' use of CC.

It is definitely the Wild West. Lots of scams and insider trades. Have to find a way to sift through the BS and decide which projects are real. To me, if a dev team is willing to put themselves out their publically, its always a good sign. People who want to stay anon (and there are understanble reasons for wanting to do so) always make me cautious from an investment standpoint.