Cryptocurrency fraud is the reason why investors are in no hurry to invest, preferring more predictable assets. Hacking exchanges, ICO projects that will never be implemented, fraudulent wallets – these are methods of deception, which are known to everyone and lie on the surface. We focus on another unpleasant circumstance that traders cannot avoid and it shows the vulnerability of cryptocurrencies.
Cryptocurrency hacks – an accident?
On the night of November 22, the media reported that on November 19, the Tether wallet was hacked, from which tokens were stolen for a total of about $ 31 billion. USA. The developers of the project, which in theory should have replaced the US dollar in transactions between the exchanges, immediately responded with a statement that the stolen tokens could not be exchanged – the address where they are stored is already recorded. The developers stole the amount immediately from the reserve. Bitcoin immediately sank by almost $ 500. USA in anticipation of further attacks, but within a few hours it recovered and went into growth.
At first glance, the situation is trivial – not the first time the exchange and wallets are hacked. But is everything clear in this cryptocurrency fraud? Let’s look at the Tether quotes chart.
For the whole year, the price of cryptocurrency almost did not change except for small fluctuations in May, when cryptocurrency was at its peak of popularity that began. True, after the drawdown, the price immediately leveled off, but the chart still has a horizontal view to the dollar. With respect to the PTS, the price falls the opposite (it is logical, since the PTS itself is growing). Another interesting thing is the dynamics of capitalization.
Questions arising from the Tether chart:
- who may be interested in cryptocurrency, which does not cause interest among investors (judging by the price schedule);
- why, with a capitalization increase of 10 times from May to November, the price of cryptocurrency has not changed;
- why capitalization has grown at all.
Capitalization is the total cost of tokens in the network, which grows with the price of tokens. But there is another option – an increase in the number of tokens at their fixed price. This is another type of cryptocurrency fraud.
According to unconfirmed data, only in November, Bitfitex cryptocurrency exchange released about 30 million Tether tokens that were not confirmed. In just 6 months, the amount of tokens in circulation jumped from 7 million to 650 million dollars. The United States, thanks to which the cryptocurrency was able to enter the TOP-20 by capitalization. In other words, Bitfitex, using unique opportunities, conducted an unsecured issue, which it can direct to the acquisition, for example, BTC or ETH, where the issue is more controlled.
Conclusion. Cryptocurrency fraud comes from the exchanges themselves. Small exchanges themselves invest money in coins on large exchanges with lower commissions. And if investors wanted to bring all their cryptocurrencies to wallets, the exchanges simply would not have them in stock. The ability to manipulate emissions is a direct threat to the bubble. After all, unsecured Tether can invest in the PTS, inflating the bubble even more. Do you still believe that the price of cryptocurrency really reflects their real value?