New York Sues Crypto Firms For Losing Over $1 Billion (theverge.com) 50
New York Attorney General Letitia James is suing three cryptocurrency companies -- Gemini, Genesis, and Digital Currency Group (DCG) -- over claims they misled investors, leading to the loss of over $1 billion. From a report: In a lawsuit filed on Thursday, James says their alleged fraudulent schemes affected over 230,000 investors. The lawsuit targets Gemini, the crypto exchange owned by Cameron and Tyler Winklevoss, and its Earn program. The firm marketed Gemini Earn as a high-yield program that involved customers investing with Genesis Global Capital, which is owned by DCG. However, James alleges that Gemini knew investing with Genesis was risky and misled customers as a result.
Well don't do that... (Score:5, Insightful)
If you take away their ability to mislead investors, you are creating an existential crisis for them. Imagine if honesty about risk was enforced in the speculative markets. Chaos, I tell you. Unmanageable chaos. The money must continue to flow through the funnels. If there are to be wolves, you must have sheep.
Re: (Score:2)
Oh, I dunno... I took a huge step recently and engaged a financial advisor. We had more discussions about risk than about any other specific topic, including taxes and my expectations.
Risk may be something the unscrupulous and criminal would mis-state, minimize, and mislead, but that's hardly unique to financial industry, and is only one of the underpinnings of the brokerage industry. Only one. Your assertions would be useful to those who intend to take control of the business, as regulators, and so dictate
Re: (Score:2)
Crypto isn't an investment (Score:4, Insightful)
Re: (Score:3, Insightful)
Never invested in crypto, never will.
Good to see others losing money though.
Re: (Score:3)
Yes, obviously. But watch all the people aggressively claiming it is not so (including here) and you see the real problem: People being deeply in denial about reality.
Re: (Score:3)
Yes, obviously. But watch all the people aggressively claiming it is not so (including here) and you see the real problem: People being deeply in denial about reality.
Well, if you already own cryptocurrency you have every motivation to extol its virtues. And get as much in the way of hard currency from those willing to give it to you for your cryptocurrency.
Re: (Score:2)
So you say many of those that sing the praise of crypto-"currencies" are stupid and scum? Makes sense to me.
Re: (Score:1)
Re: (Score:2)
Re: (Score:1)
Re: (Score:2)
Why are you suddenly up in arms about inflation? We've often had inflation. Inflation is part of our economic cycles.
If you weren't aware of that you should head back to school.
Re: (Score:1)
Just keep believing and trusting, your friendly government would not steer you wrong. Yellen is totally competent and you can trust her too.
Re: (Score:1)
currency is about as hard as as jello, slight resistance to change but will bend with the pressures of money printing (aka tax.)
that almost sounds like wisdom
Re: Crypto isn't an investment (Score:2, Interesting)
If you buy a stock that doesb't yield dividend then you aren't investing in a company. That company recieved thier investment when the stock was first issued, by the time you pick it up on eTrade or whatver it has passed through several hands. You are hedging that a company will return to ask for another round of stock or the conpany decides to do a buy back, and your shares value will mean sonething then.
Re: Crypto isn't an investment (Score:2)
If you are investing in a typical companyâ(TM)s shares you are financing its economic activity. Companies create goods and services which their customers pay for, and which provide profits. While some companies may not be paying dividends for a while, there is an expectation that they will eventually pay dividends and / or buy back stock using money generated from their business activities (as opposed to holding that someone comes to buy you out).
Therefore investing in the stock market is completely di
Re: (Score:1)
If you buy a stock that doesb't yield dividend then you aren't investing in a company
how does it become an investment if it pays back a dividend? youre still not giving money to the company on the share certificate are you
Re: (Score:2)
Dividends are irrelevant. If you buy stock in a company you own a piece of that company. Literally. That's what having stock means.
You are also investing in that company - even if indirectly. Your shares were, at some point in the past, issued by the company (i.e. they got paid for them). You are taking over that original buyer's investment in that company. Maybe the valuation has changed in the meantime - that doesn't matter. You are making an investment, and you own a piece of them.
Re: (Score:1)
Dividends are irrelevant. If you buy stock in a company you own a piece of that company. Literally
true
Your shares were, at some point in the past, issued by the company (i.e. they got paid for them)..
Company only makes money from the ipo, and thats it.
Re: (Score:2)
Very true also - but you are, in fact, taking over the original investment. Forget stocks - you start a company and have 2 backers with 30% equity each. Both of them sell - for $1, or $1,000,000, doesn't matter - to a 3rd party. Well, guess what - that 3rd party has 60% equity in your company (and you'd better listen to them, for better or worse). But, yeah - the company got money from the first 2 guys, and nothing more from the third.
Re: (Score:2)
Re: (Score:2)
It's a ponzi scheme. Nothing of material value is created by crypto...
OK, valuing damn near any non-backed and unaudited (cough, the Fed) currency can be an exercise dancing between fiscal uncertainty and new math, but can we dispel with this delusion that cryptocurrency hasn't created anything of material value already? Plenty of mansions, yachts, real estate, cocaine and lambos painted in fuck-boy fuschia were purchased from just the exchange between that globally accepted ponzi scheme and every other fiat currency used to buy all that material in existence today. That ma
Re: (Score:2)
Crypto is zero sum, or maybe even negative sum.
While it may have created some value, it isn't in what folks would normally refer to. Examples of the value that crypto creates is:
- Ability (for a while at least) to trade illicitly online while being (allegedly) untraceable
- Ability to evade taxes and exchange control
Crypto has been wholly sustained by the increase in the price, or the expectation of it.
Re: (Score:2)
While it may have created some value, it isn't in what folks would normally refer to...
So, when Warren Buffet takes BH investors through the roof with million percent returns over time, the mansions, yachts, and fuck-boy lambos are referred to as "some value"..
..but when someone does the same thing with an investment called "crypto", they have a different name for all those mansions, yachts, and fuck-boy lambos? What do they refer to those as?
Crypto has been wholly sustained by the increase in the price, or the expectation of it.
Gee, I can't imagine what speculative-predictin' short-grabbin' IPO-runnin' CDO-gamblin' money-snatchin' insider-tradin' Too-Big-to-be-failin' Street th
Re: (Score:1)
Gee, I can't imagine what...they learned that idea from
and its the same people running the scams in the crypto world, precisely because theres no rule against it. they cant believe their luck.
but americans arent that dim surely? surely they wouldnt fall for scams invented in the 20s? oh....
Re: (Score:2)
So, when Warren Buffet takes BH investors through the roof with million percent returns over time, the mansions, yachts, and fuck-boy lambos are referred to as "some value".. ..but when someone does the same thing with an investment called "crypto", they have a different name for all those mansions, yachts, and fuck-boy lambos? What do they refer to those as?
BH investors are investing in underlying companies that actually generate economic activity / output. For example, BH owns:
- Acme Brick Company
- Clayton Homes, that builds actual houses
- GEICO insurance
Their profits are generated in the old fashioned way, customers pay them more than the cost of providing goods and service, and that activity is what sustains BH shares. While BH does not pay a dividend, they could if they wanted to.
Re: Crypto isn't an investment (Score:1)
Re: (Score:2)
You're describing the Greater Fool theory. An important, sometimes foundational, basis for much of the collectible industry, and perhaps also in real estate. Amon g others. Caveat Emptor -always-.
Re: (Score:3)
Yep, high-validity source. They will _have_ to convict on that evidence for sure!
Re: (Score:3)
Re: (Score:2)
Indeed.
Lose a billion and they sue you.. (Score:5, Funny)
T'is but a scratch (Score:2)
I've had worse.
And you think (Score:2)
that these companies could possible pay it back in any way, shape, or form? No. That money is gone. Poof. Just like everything else in the crypto world - there is no value.
Re:And you think (Score:5, Informative)
In the case of SBF he bought himself an island, gave millions to his parents, spread it around the other officers in the company - that money still exists and can be clawed back perhaps. But yes, much of it is gone.
Re: (Score:2)
You aren't wrong, but he was an exception overall. Most haven't done extravagant, obviously dumb things with their money.
"High yield program"... (Score:4, Insightful)
People continue to be utterly stupid and believe fantastic interest rates or financial gains on "investments" can be real and come with low risk...
This must be one of the oldest scams of modern times.
Re: (Score:2)
People continue to be utterly stupid and believe fantastic interest rates or financial gains on "investments" can be real and come with low risk...
This must be one of the oldest scams of modern times.
This is one of the oldest scams that's still functioning about as well as the rest of the house of cards offering obscenely low interest rates. Somewhere between Too Big To Fail and a Fed audit lies a digital QE printing press that's reportedly worth more than an entire collection of Hunter Biden fine art.
Re: (Score:3)
Re: (Score:2)
Didn't Investors Know It Was Risky (Score:3)
I'm sure that there was some indication that they could lose money, yes?
I'm sure that any "it's too good to be true" thoughts that the investors had were stifled behind the $GREED signs in their eyes.
Did none of the investors do any due diligence? Is it *that* easy to convince people that you have money? Just present them with pieces of paper, or e-forms, that state so? Hmm.
Shouldn't you be investing in things that you know about, at least in a broad sense? I mean, I know the stock market may go down, so I invest in a retirement mutual fund with low fees so that my risk is the risk for the whole economy, in general. I know the markets are regulated to the extent that I *do* have those shares, and they *can't* be taken from me or sold out from under me, nor can the liquid funds in those Investment Houses. It can all go to 0, but that disaster wouldn't be affecting just me, and there's nothing I can/could do against that. Yes, the mutual funds may invest in sketchy investments, but then I have to pick one that doesn't do that. Like, I don't want my retirement fund investing in Crypto. No thanks.
Perhaps these people just had too much money. People with too much money aren't generally as careful with it as people with less money, and fall for schemes which may net them even more too much money regularly. Maybe that's why they invested in such a sketchy product.
Wow (Score:3)
Investors (or losers) mislead themselves (Score:2)