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India! I dare you to be rich

The Bitcoin market is full of scam and fraud. The unwary will lose big money. Stay away!

Bitcoin is weird and shady. $100 million stolen. Gone! No trace. And other types of fraud that I'm not even going to try to understand. Clearly, being an entirely unregulated market, it provides fertile ground for variety of criminals to prosper. I suspect all regulatory authorities are KEENLY working to crack down on Bitcoin. I would agree with stern regulation of such "currency".

Apparently a trader with Twitter username Fontase was involved in Bitcoin scam:

The call went out on Twitter: “For insane profits come and join the pump.”

It was an invitation to a penny stock-style pump-and-dump scheme — only this one involved Bitcoin, the soaring, slightly scary virtual currency that has beckoned and bewildered people around the world.

While such bid ’em up, sell ’em off scams are shut down in the financial markets all the time, this one and other frauds involving digital money have gone unchecked. The reason, in no small part: Government authorities do not agree on which laws apply to Bitcoin — or even on what Bitcoin is.

The person behind the recent scheme, a trader known on Twitter as Fontas, said in a secure Internet chat that he operated with little fear of a crackdown. [Source]

“For now, the lack of regulations allows everything to happen,” Fontas said in the chat, where he verified his control of the Twitter account, which has thousands of followers, but did not give his identity. He added that Bitcoin and its users would benefit when someone steps in to police this financial wild west, and would stop his schemes when they do.

I checked and found this was his account (Fontase):

But the secretive trader has shut down his Twitter account:

 

And finally: this:

Addendum

Is Bitcoin a Real Currency? by David Yermack, an NBER working paper

 

if you’re trying to keep government eyes off your transactions, untraceable currency has its advantages. But most of us don’t do transactions that the government much cares about, so the fear of theft outweighs the benefits of anonymity.

The second is that there is, as yet, no currency exchange like the ones we use for regular currency — backed by large institutions that can be sued if things go wrong. Again, there are advantages to this for the underground economy. But for folks in the regular old economy, that’s a problem. It’s hard to get enthusiastic about saving in a system where hundreds of thousands of dollars can disappear overnight, leaving you with no recourse.  [Source]


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Sanjeev Sabhlok

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