There are always new stories about scams and ripoffs in the digital currency industry.
The High Court of the U.K. shut down the digital currency trading company PGI Global U.K. in September after it was said to have scammed investors out of $709,000. The scam told investors they would get back up to 200% of their money, but when that didn’t happen, they couldn’t get their money out of the platform.
As a new development in the case, on October 27 the company was given an Official Receiver to help it close down. The U.S. Department of Justice and the U.S. Treasury have already shut down the firm’s parent company, Praetorian Group International Trading Ltd.
Scams, scams, and yet more scams
CoinGeek started a series called the Crypto Crime Cartel to keep track of all the scams and ripoffs in the digital currency industry.
Many newcomers don’t know that some of the biggest players in the industry and some of the biggest firms have been involved in all kinds of shady deals, from money laundering to insider trading and worse. Many of the industry’s leaders have openly supported anarchy and unchecked crime, but every year, millions of newcomers give them a lot of money. The goal of the Crypto Crime Cartel series is to bring this to light.
Even though not many people know it yet, BTC is a kind of scam that tries to pass itself off as Bitcoin when it is not. Yes, it’s that crazy: the largest digital currency by market cap, which Wall Street billionaires like Michael Saylor have bought in bulk, is a giant Ponzi scheme that will fail one day and cause a wave of financial loss and suffering.
As regulators check out and shut down more and more companies like PGI Global U.K., people are waking up and realizing that not everything in “crypto” is as it seems. There’s still time to get out, and the prices on the market show that a lot of people are leaving while there’s still some cash.
A heartbreaking catalog of carnage and chaos
When you look back at the last few years in the digital currency industry, you can see heartbreak on a scale that is almost impossible to imagine. All kinds of thieves have taken advantage of people who were just trying to make some money. Just a few examples are given below.
When the algorithmic stablecoin UST failed earlier in 2022, investors lost billions of dollars overnight. Do Kwon, who started Terra, is accused of moving millions of dollars worth of digital currency right before the crash. He is now refusing to work with law enforcement.
Shortly after the collapse of UST, the crypto hedge fund Three Arrows Capital fell apart. It had borrowed billions of dollars in bad faith to run a scheme that was close to, if not a direct Ponzi scheme. Once again, the founders won’t help the police, so lawyers for liquidators have to send them a subpoena on Twitter (NASDAQ: TWTR).
Several sites that let people borrow digital currency shut down, taking billions of dollars in deposits with them. Users’ accounts were frozen overnight by companies like Voyager Digital. Celsius Network was by far the largest. Alex Mashinsky, the CEO, took the time during the chaos to cash out millions of dollars worth of CEL tokens. This left users holding the bag with no relief in sight.
This is just a small sample of the dishonest things that people in the digital currency space have done recently. Even though it can’t be said for sure yet, none of the above situations were full-on scams like PGI Global U.K. is said to have been. This will be decided in due time. Still, these examples show that the industry is based on corruption and a callous lack of care for users.
The net is closing in, and the law is cracking down
The shutdown of PGI Global U.K. is just the latest in a long line of crackdowns by regulators and law enforcement around the world. Many digital currency scams have been shut down in the past, and top companies like FTX, Binance, and stablecoin issuer Tether are currently being looked into by regulators from the Texas Securities Exchange Commission to the U.S. Department of Justice.
