25% of Cryptocurrency Tokens in 2022 Were Fake: Chainalysis

• Chainalysis released a report that showed 25% of tokens introduced in 2022 were scams.
• Many of these tokens were part of pump-and-dump schemes which involve artificially inflating prices and then running off with the money.
• The ease with which bad actors can launch new tokens and remain anonymous makes pump-and-dump schemes easy to pull off, hurting the reputation of crypto investment.

Chainalysis Report on Fake Tokens

Chainalysis, a blockchain analysis firm, released a report that revealed roughly 25 percent of digital tokens introduced in 2022 were scams designed to make off with investor funds. This was largely due to pump-and-dump schemes, wherein developers or executives talk up a token to get investors interested, causing the price to rise artificially before they run away with the profits.

How Pump and Dump Schemes Work

Pump and dump schemes are typically orchestrated by talking up a token and getting investors interested through fear of missing out (FOMO). Eventually, so many people invest in it that its price reaches an all-time high before those behind it shut down the operation and run away with their profits. It’s an unethical practice that sees innocent traders losing out due to malicious greed.

Ease Of Pulling Off Schemes

According to Chainalysis‘ statement, teams launching new projects and tokens can remain anonymous, making it easier for serial offenders to carry out multiple pump and dump schemes. In addition, launching new tokens is relatively easy compared to other markets which helps fuel this type of fraud.

Effect On Crypto Industry Reputation

The company explained that pump and dump schemes have been damaging for the reputation of cryptocurrency as many believe mass adoption is on the horizon but may be hampered if people view crypto investments as rife with such scams designed at taking advantage of newcomers.

Red Flags To Look Out For

The report recommends keeping an eye out for red flags when investing in digital assets such as seeding initial trading volume or controlling circulating supply. It also emphasizes staying vigilant against any attempts at manipulating prices or engaging in activities which could damage public perception about crypto investments.

Crypto Fraudster Pleads Guilty to $250M Scheme

• Eddy Alexandre was accused of running a crypto exchange and defrauding investors out of nearly $250 million.
• He promised guaranteed returns through “secret technology” and didn’t invest the funds in cryptocurrencies as he claimed.
• U.S. attorney Damian Williams issued a statement warning cryptocurrency executives that misconduct in the crypto markets will be prosecuted.

Eddy Alexandre Pleads Guilty to Crypto Fraud Scheme

Eddy Alexandre, a man from New York, pleaded guilty in February this year after conducting an illegal crypto fraud scheme that stole almost $250 million from investors. The fraud was conducted between September 2021 and May 2022, through a company called Emini FX.

False Promises

Alexandre falsely promised investors exclusive access to passive income through an automated trading system for both forex and cryptocurrencies, claiming he could guarantee them weekly returns of at least 5%, which is impossible with the volatility of the market. He also promised to double their money within five months by investing through his „Robo-Investment“ platform.

Warning From US Attorney

Damian Williams, the U.S. attorney for the Southern District of New York issued a statement saying any misconduct in the crypto markets will be prosecuted severely and warned other cryptocurrency executives: “Eddy Alexandre admitted today to luring investors to his cryptocurrency investment scam by fabricating weekly returns of at least five percent…His scam caused investors to lose millions of dollars.“

Millions Of Dollars Lost

Alexandre’s promises were too good to be true, as he failed to invest a substantial portion of investors‘ money and even used some funds for personal purchases, resulting in thousands losing out on their investments all together totaling up to millions of dollars lost .

Conclusion

This case should act as an example that misconduct in the crypto markets won’t go unpunished or unnoticed by authorities who are closely watching these activities now more than ever before.

Tim Draper Tries to Bring BTC Adoption to Sri Lanka—Fails

• Tim Draper, a billionaire investor, recently tried to promote the use of Bitcoin in Sri Lanka to the nation’s central bank.
• Regulators were not receptive and stated that Bitcoin would never be adopted by Sri Lanka.
• Despite his efforts, Draper was unsuccessful in promoting Bitcoin as an alternative payment method due to its volatility and uncertainty.

Tim Draper Tries to Promote BTC Use in Sri Lanka

Billionaire investor Tim Draper recently took a trip to Sri Lanka to promote bitcoin to the nation’s central bank only to be kicked out unceremoniously. In his opening statement, he argued that a country known for corruption could keep perfect records with the adoption of bitcoin. Sadly, regulators of Sri Lanka did not welcome him with open arms and commented that the use of crypto or bitcoin would never occur within their borders.

The Reasons Why BTC Was Rejected

The work did not pay off and officials have made it clear that they will not move in the direction of the world’s number one digital currency by market cap. The reason behind this is because it is extremely hard to understand when bitcoin and its crypto family will go up or down when it comes to their prices. Many stores and companies have been reluctant to say „yes“ when it comes to accepting crypto payments for this reason, making BTC rejection understandable from a financial standpoint.

Examples Of Possible Losses

Consider the following scenario: someone walks into a store and buys $50 worth of merchandise with bitcoin. For one reason or another, the store doesn’t trade the BTC into fiat right away and about 24 hours go by. From there, the price of BTC goes down and that $50 becomes $40 – making it so that customer gets everything he or she bought but at an expense for the store who has lost money in the end. Is this a fair situation? Not every business can afford such losses which is why many are hesitant on accepting crypto payments as an option from customers despite its potential benefits long-term wise.

Seeking Balance Between Risk And Reward

It’s important for governments all over the world – including those like Sri Lanka -to find balance between risk and reward when it comes down to regulating blockchain technology, cryptocurrencies such as Bitcoin and other related fintech applications/niches alike so as investors don’t feel discouraged from investing in them while users can still enjoy all their features without worrying about fraud risks/losses etcetera associated with them (especially if these are held over long periods).

Conclusion

In conclusion, while Tim Draper’s mission was ultimately unsuccessful in terms of convincing regulators in Sri Lanka to accept Bitcoin as an official payment method – his efforts serve as proof that more needs done worldwide regarding cryptocurrency regulation & education so people become more comfortable using them day by day instead of being wary about them due their perceived “lack of safety” etcetera