Former PayPal CEO has slammed Bitcoin (BTC) saying it is the biggest scam of all times. Bill Harris said that the so-called cryptocurrency has got no value and said it is a mere ‘pump-and-dump’ scheme.
In a note on technology website Recode, Harris retaliated his earlier calls that cryptocurrency is “gambling”, “speculative”, a “bubble” and a scam. In a “pump-and-dump” scheme, promoters raise the price of a security hence creating a speculative frenzy among unsuspecting investors, and then “dump” a portion of their holdings high prices created artificially. Many cryptocurencies have turned out to be frauds. According to Ernst & Young, 10% of the funds that have been collected for initial coin offerings have been stolen.
Harris now joins the growing list of experts from the traditional financial community who are cautiously watching the excitement surrounding cryptocurencies with many terming it as a bubble about to burst. Jordan Belfort, the real-life Wolf of Wall Street also termed cryptocurrencies as “pump-and-dump” schemes.
Recently, there were fears that Yassin Hankir, the head of Savedroid, a German cryptocurrency start-up had ran away with $50 million of investors’ money. This is after the initial website was taken down and instead started displaying a South Park meme, with the message “Aannd it’s gone.” Later, Mr Hankir tweeted the words “Thanks guys! Over and out, accompanying a photo of himself on a beach holding a beer.
This move ignites memories of Prodeum, an “alt-coin” ICO, which duped unsuspecting investors and later brought down it its website, replacing it with a blank website with the word “penis”. Later, after a cryptocurrency journalist tracked him in Egypt, Mr Hankir said that the move was a publicity stunt aimed at drawing attention of investors to the serious problems that are poised by scams. However, many investors were le not convinced.
Mr Harris says that potential losers in the cryptocurrency industry will be the ill-informed investors who have been caught up in greed. He says that as a result, many have moved their wealth from ordinary families to promoters on the internet.