The Business Behind CryptoCurrency Scams - Why Not To Trust the "Experts"
Nowadays it seems that new cryptocurrencies pop like scandal news and their owners want positive media coverage for their virtual currencies, even if the plan and everything behind it is a total scam.
According to a Reuters survey most of the positive feedbacks related to cryptocurrency are bought and totally fake.
When cryptocurrency issuers want positive coverage for their virtual coins, they buy it.
Self-proclaimed social media experts take thousands of dollars for reviews, research institutes accept payments in virtual currencies for their review, and there are experts who will positively evaluate anything for a price. All of these practices are common, according to more than two dozen people on the crpto market and some of the agency's documents.
Earlier this year, the Ukrainian blockchain startup Hacken tried to promote a new cryptocurrency, after winning $ 3 million online at the end of 2017. CEO Dmitro Budorin and his team identified a list of nearly 200 social figures in the online media they thought it could help.
Hacken paid $ 7,500 to Christopher Greene of Alternative Media Television, a YouTube channel with over 500,000 subscribers, to review the virtual currency in a video, Budorin said.
In a 25-minute video, published on June 22, Greene spoke about Hacken's business, talking about a "huge market opportunity" with potential gains of 1,000 times greater than the investment.
Nowhere in the video, which has over 92,000 views, there is no mention of Hacken's payment to Greene. Greene, who worked for Merrill Lynch, informs viewers in the first minute of the video that "he can get compensation for the products and services" he recommends the new crytocurrency , but he does not speak clearly about Hacken paying for the review..
Four days after the review was published on YouTube, Christopher Greene happily stated on Twitter the fact that Hacken's currency grew 14% to $ 1.54.
Some people have been mindful of Greene's recommendations: Carter Zurawel, a yoga instructor from Calgary, Canada, responded to Greene's tweet: "The video about Hacken was great! It made me buy a few hundred."
The token price has since fallen by more than 75% to 36 cents. Zurawel told Reuters in Twitter messages that he lost much of his initial investment worth several hundred dollars. He said he did not know that Greene was paid for his video. "I will probably keep the investment, because I strongly believe that the cryptocurrency market will grow in the future," he told Reuters.
In turn, Budorin admitted that payments to Greene and other commentators on YouTube were unethical.
The Hacken approach is just an example of the hype that makes recommendations seen by hundreds of thousands of investors. Few researchers or experts are revealing their own views on digital assets that have so far existed in a gray area of the market.
The cryptocurrency bubble peaked in December last year, when bitcoin reached nearly $ 20,000, a value that has now fallen by more than 70%. The total value of virtual coins is now about 121 billion dollars, down from about $ 830 billion at the beginning of the year.
In the end it does not matter the hype machine is still going on and people will still believe in fairy tales and the expert reviews on the market sound like a political speech.