Each morning I check out what is happening in the crypto world with just a general search for Crypto News. Sometimes I will find something that jumps out at me and I will wrote about it. Other mornings nothing special catches my eye and it is just a bunch of Elon Musk said this or that.
This morning an article from the Netherlands made me think a little. My main question is this the type of arrest we should be applauding in the crypto world, or is this just the beginnings of government involvement and control?
A couple of highlights from the article include:
• Dutch police arrested one of the men at a Deventer warehouse that held several computers used for mining cryptocurrency, and that there “was also an issue of electricity theft.”
• The arrests stemmed from an investigation of the cryptocurrency exchange Coinhouse.eu, which authorities have suspected of embezzling customers’ money and defrauding them.
• In what authorities described as a pump-and-dump scheme, one of the men, a 39-year-old, produced the cryptocurrency and advertised it on a cryptocurrency platform and Twitter, luring investors and boosting the price. He then sold a large volume of digital coins over a short time frame, rendering them “worthless.”
• The 39-year-old man is also suspected of similarly trying to scam investors using ERSO, MALC, EUROP and TulipMania digital currencies, the press release said.
• During the investigation, police seized a house, vehicles, computers and cryptocurrencies.
I have a couple of thoughts on this, but, not a hardcore opinion on it. (First, if they were stealing electricity to mine, then that is a separate issue that seems to constitute good ole theft and should be prosecuted. I don’t put that in the same boat as the other points)
My other incites are in more of a grey area. Pump and Dump schemes suck and are a real problem. In the traditional investing world, they are illegal, although, billionaires and large firms do it all the time. Pretty much any hedge fund that shorts a stock is doing some form of this.
The grey area comes in three thoughts I have about the article:
- Do we want police interaction in crypto in cases like this? If this becomes activity that police are making arrest on, then by default we accept that governments control crypto.
Second, the point I have made before is that a decentralized currency is policed by itself. We have sites that provide more information than we could ever need on any topic. We literally call new, smaller coins “shitcoins” because there are so many unknowns with them. Hence, if you give someone your money on a coin you know nothing about, do not be surprised when this happens. No group of investors has been more aware of the risk and the fluid aspect of what they are doing. Setting the expectation that the authorities will step in if we are taken advantage of is a bad precedent. (Also, I doubt one penny is actually returned from these arrests, I will be looking for a follow up article about what happens with the seized property and crypto.)
Last thought is on the term "Self-Made Cryptocurrecnty" in the title of the article. It may be a small thing, but as far as public opinion goes, labeling a shitcoin something like that is a slippery slope to governments de-legitimizing all crypto.
Let me know if I am wrong and you want this type of oversight in the cryptoverse. I would suggest if you are looking outside to the authorities for security, first type “scam” (or anything more specific you may be concerned about) in the search bar here and you will find all you need to know.
One last item, I hate to bring Musk back into the conversation as there are already thousands of articles on him, but, I am not sure how you say what he is doing is not some form of pump-and-dump. If he has not made millions off of talking up and dumping crypto using his huge platform, then, what else do you call it? No one is asking the popo to knock on his front door.
Thanks for reading. Research, HODL and check your zipper twice before that job interview.
Resources
https://finance.yahoo.com/news/dutch-police-arrest-three-pump-045321983.html