History
Several weeks ago a group of BitShares users decided to modify two significant parameters of the bitCNY asset on the BitShares blockchain. BitCNY is one of several #SmartCoins with a decentralized peg to CNY. As described here and here, the parameter change leads to a direct devaluation of bitCNY, robbing 1% of value from bitCNY holders in favor of bitCNY shorters.
I'm sure this behaviour violates existing laws regarding fincancial securities almost everywhere in the world, in particular because all existing documentation on BitShares' SmartCoins continues to make the following false promise:
SmartCoins are guaranteed to be worth at least their face value
In my view, the only adequate word for deliberately selling stuff with a false guarantee is #SCAM.
Latest events
Meanwhile, the same users who are scamming bitCNY holders and buyers, intend to expand their activity to #bitUSD. A proposal has been created to apply the same parameter modification to the bitUSD asset. As justification, they claim
the community now strongly support to modify bitUSD
(a support which consists of 26 forum members, not shareholders, at the time of writing).
Most likely the same will also happen to other SmartCoins. bitBTC will probably be next.
Conclusion
Stay away from BitShares' SmartCoins if you care about your money!
If you're looking for a USD-pegged SmartCoin, check out #Steem SBD. It has two distinct advantages over bitUSD:
- There are no modifiable parameters associated with it. Unless steem hardforks, SBD will always be converted to STEEM at the median price of the seven days preceding the conversion.
- SBD pays interest (10% per year at the time of writing)