‘Wolf of Wall Street’ warns raising money through ICOs is usually the ‘biggest scam ever’

Belfort, who spent 22 months in jail after pleading guilty to securities fraud along with also money laundering, said while most investors probably did not have bad intentions with ICOs, the item would likely only take a little proportion of people trying to scam the others for the item to become a “disaster”.

“the item is usually the biggest scam ever, such a huge gigantic scam of which’s going to blow up in so many people’s faces. the item’s far worse than anything I was ever doing,” Belfort told the Financial Times.

Digital currencies are pseudonymous, decentralized along with also encrypted, doing the item harder to track each of the transactions made, along with also the individuals behind them. Theoretically, anyone with an internet connection along with also a digital wallet can be part of a coin sale event. of which, many worry, leaves plenty of room for people to launder money or engage in additional fraudulent behaviors — especially in countries where corruption is usually rampant.

However, start-up companies argue ICO funding is usually a legitimate method of raising money along with also the item is usually representative of a broad grassroots movement to unsettle big banks along with also venture funds. A frequent refrain by bitcoin enthusiasts along with also cryptocurrency stakeholders is usually of which the blockchain system is usually actually problematic for would likely-be launderers.

of which is usually, every transaction of a blockchain-based token is usually permanently recorded on a publicly view-able digital ledger. Although the parties associated with each exchange are hidden behind pseudonymous IDs, the item is usually possible for investigators to track down who has done what if their activities go through a cooperating exchange.

So far This particular year, ICOs have raised more than $3 billion, according to Coinschedule.com.

Read the Financial Times full article here.

— CNBC’s Saheli Roy Choudhury contributed to This particular report.

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