- Roubini Macro Associates co-founder, Nouriel Roubini, calls the entire cryptocurrency space of “shitcoins” a scam.
- The analysis shows that at least $4.3 billion was scammed from investors in 2019 alone using Ponzi schemes and other frauds involving cryptocurrencies and Bitcoin.
- Roubini has previously shown his distaste and criticism for shitcoins that have no real utility or value.
Roubini Macro Associates co-founder, Nouriel Roubini, calls the entire cryptocurrency space of “shitcoins” a scam. Roubini tweeted quoting a Wall Street Journal article on how cryptocurrency scams fraudulently acquired over $4 billion in just 2019.0
Roubini expressed his frustration and anger at the article by saying that the losses feel more like $40 billion since the entire “shitcoins’ crypto land” is a scam.” Shitcoins are the term used to refer to cryptocurrencies that have depreciating value and no real utility or worth.
Only $4bn? Feels like $40bn as the entire shitcoins' crypto land is a scam!
Cryptocurrency Scams Took in More Than $4 Billion in 2019.
Ponzi schemes are the latest form of bitcoin fraud, with big platforms like one called PlusToken drawing the most moneyhttps://t.co/omguJIktAM
— Nouriel Roubini (@Nouriel) February 9, 2020
The Wall Street Journal article details a number of Ponzi schemes in the cryptocurrency space with exchange platforms. Cryptocurrencies are drawing in large investments and then locking in the money with large losses for the customers.
One such example that the article references is PlusToken, a cryptocurrency exchange that netted at $2 billion. The platform attracted a large number of investors from China and South Korea during 2019 and late 2018 for trading Bitcoin and Ethereum.
The platform was found to be a scam that was run by 6 Chinese citizens in Vanuatu. Their clients’ money was locked in, and all access to their holdings were lost.
Popular on-chain data analysis firm, Chainalysis concluded that PlusToken was a Ponzi scheme, a very popular form of investment fraud. The analysis shows that at least $4.3 billion was scammed from investors in 2019 alone using Ponzi schemes and other frauds involving cryptocurrencies and Bitcoin.
Ponzi schemes are investment fraud activities where large returns are promised with very little risk. Kim Grauer, the research head at Chainalysis, says that the large growth is seen in cryptocurrency platforms that mimic investing opportunities. As such platforms become larger without being identified, more investors are lured in and get scammed out of their pockets.
Roubini has previously shown his distaste and criticism for shitcoins that have no real utility or value. Cryptocurrency frauds have been increasing year over year with 2019 seeing more fraudulent activities in the space than 2017 and 2018 combined.
The cryptocurrency cesspool has been increasing with a number of new coins every day since the cryptocurrency boom in 2017, and most of them have weak infrastructure and low value. Roubini has previously stated in a tweet that it might take another decade before all the shitcoins are identified as scams and are locked out.