One of the biggest financial losses of this century has been exposed once again with the FTX cryptocurrency bankruptcy in the US.
Since the introduction of cryptocurrencies in 2004, eight major cryptocurrency losses have been publicly documented. Lost or stolen items total over $900 million.
One scandal most Canadians may remember was when Quadriga owner Peter Cotten died suddenly in India in 2018. He has the only password to a cryptocurrency and investors have lost $190 million due to the lost password.
Some investors have insisted that his body be exhumed in India to make sure he didn’t fake his death and run away with the treasure.
Cryptocurrency speculation has made billions of dollars for some investors and lost billions for others.
Bitcoin is the best known of the many types of cryptocurrencies, but they are all like playing with Monopoly money. request.
Cryptocurrencies are “mined” by massive computers that mine cyberspace with complex formulas to find cryptocurrencies.
The amount of a single cryptocurrency is probably limited, giving it “value” through scarcity. Owners must take the author’s word on its limitations.
National currencies are backed by central banks and national wealth. Cryptocurrencies have no such backing.
The value of cryptocurrencies is based on trust in their creators and the expectation of increasing value in the market.
Since 2014, Bitcoin has gone from US$461 to a high of US$61,284 in 2021 and is currently trading at around US$17,000.
Proponents of these alternative currencies claim to eliminate the need for bank-cleared transactions, claiming they are private, hidden from government prying eyes, and stored securely in cyberspace. I’m here.
Hacker thieves disproved security claims.
According to a 2020 U.S. government study, the three main illegal uses of cryptocurrencies are: criminal trade. money laundering; theft.
Governments have been slow to regulate cryptocurrencies with some minor regulations over the past few years as officials saw them as a challenge to the control of monetary policy and a threat to tax collection.
Eight countries, including China, have completely banned these fake currencies. Tiny El Salvador has adopted Bitcoin as its national currency.
FTX’s bankruptcy was even worse for the public because it involved a cryptocurrency-based bank. Losers included several national investment funds, his $95 million from the Ontario Teachers’ Pension Fund, and US quarterback Tom Brady.
FTX founder and former CEO Sam Bankman-Fried lost $14 billion in fortunes, while so-called investors lost an estimated $8 billion. Bankman-Fried planned to donate his fortune to charity. He has been charged with fraud.
Cryptocurrency proponents will point to a lack of control as FTX executives used depositors’ money to buy private property and spend it lavishly. They shouldn’t have had access to cryptocurrencies yet.
As long as there is hope for fast money, some investors will cling to this exclusive money.
Ron Walter can be reached at ronjoy@sasktel.net.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the position of this publication.
