Topic: AttorneyBitcoin Reports on Latest Scams, Risks and Makes Predictions (Read 145 times)

Dear Community:

As an attorney for Bitcoin and Crypto I receive dozens of requests for help with either actual scams or suspected scams. I am in a unique position to report to the community what is happening on the ground, what to beware of and also to give my analysis of the current state of crypto investing and business. I despise fraud and want to warn the public about certain matters.

I will never reveal names of client's or even of those simply requesting help. I will also never give any specific information that might reveal who my sources or clients are. I take attorney/client confidentiality very seriously and will also protect the identity of those merely seeking representation whether or not they hire me.  

Now to the scams:

Thankfully there are exchanges that seem to be functioning well and also seem honest and sound. However some have better customer service than others. I have heard many, many complaints of tickets going unanswered, freezing of accounts and the inability to fix whatever the exchange wants fixed. While I attribute some of this to a lack of sufficient number of employees on these sites to handle all the tickets and problems, these incidents are a red flag. If the site is indeed honest and overwhelmed, they could still at the very least report to the customer as to how long it will take to answer a ticket and keep the customer informed.

This behavior of the trading sites is in the very least poor business practice and at the very most a bad sign of things to come on that site. I ask the exchanges to take some of their recent windfall profits and hire more people to serve those that have helped you build your business.

Sometimes there is an impatience on the part of the customer. Expecting a reasonable response in a reasonable period of time is fair, but expecting immediate service on a five dollar account or sending repeated tickets and complaints when you don't get the service you feel that you deserve can, I suspect, put you "accidentally" to the bottom of the list. Having said that, it is my view that most trading sites are undermanned and have generally behaved in a disrespectful manner to their customers. Be very careful when you set up your account, sign in, make changes. buy, sell or withdraw.  Mistakes could freeze your account for weeks. 

Generally if there is any widespread fraud, a number of complaints will be placed with the SEC or FTC, among others, and then the regulators will take action, if they can find the owners that is. With this in mind, consumers, when you put your money into these accounts/exchanges, have you done any due diligence? Are they registered as a business with a secretary of state and are they current? Do they provide a physical address? Have you read their terms of service and privacy policies? How long have they been in business?

Moving on from exchanges to cloud mining. Cloud mining has the worst reputation for fraud. Now, not all sites mind you, but enough of them to make any reasonable person wary. And so you should be. Longevity, reputation, price, timely payouts, responses to tickets, how well the site works, take all of this into account. Even then, you might be better off buying a miner and doing it yourself. At least you can control the mining. Buyer beware here. Something is also getting lost in all the excitement recently. Difficulty generally rises over time in mining. This means you need more mining power to achieve the same results with the same coin. Funny how most cloud mining sites fail to mention this to prospective customers. I have seen two or three that have disclosed this over the past few years, bravo to those folks on transparency and honesty.

Beware of hardware scams. They are out there. The price is too good to be true. The miner arrives but only partially works and the seller has disappeared. Most do not disclose what the miners can make in order to calculate ROI and do not disclose the amount of noise, heat and the cost of electricity. Miners that work but that are damaged. Improper PIN cables and connectors, some creating a fire hazard. Failure to educate or warn of the downsides of heat and dust. Now there are those of you out there who will say let the buyer do their due diligence, why should I tell them anything. This is a sardonic, and cynical view. I suggest you be honest and informative. As to the run up in price for miners, they are at ridiculous levels and there are profiteers out there preying on the newbies ignorance. Folks, wait a little while, there is a glut on the market believe it or not, and the prices will drop and there will be more miners on the aftermarket. Prices are already showing slight signs of weakening.

Trading bots, while I have not heard of any fraud, they are generally complex and do not come with any meaningful instructions or tutorials. It will take a lot of time and effort to understand and apply them. This type of knowledge is hard to come by and trading is competitive so you will get no training or information or you will get miss-information. It is a universal truth that you never get something for nothing. You have either earned it or paid for it one way or another.

Hedge funds for crypto. These are also ripe for ripping off people. Are they registered with the SEC? I doubt it. While there are a handful of legitimate ones it is more likely a trader, working at their kitchen table at home, who has had some luck recently and thinks he has it all figured out. He wants your money because he thinks he can make you money for a fee, with his magic touch and brilliant insights.

Now onto general observations and predictions. There are many amazing and exciting projects happening right now. It truly is historic. These new and innovative applications are changing the world in ways that are hard to see but they are very real and are having and will have a profound effect upon business and day to day life.

I believe, and this is my opinion only, that the price of BTC has hit a wall at around nineteen thousand for now. As of this writing it is hovering at sixteen thousand. Do not be surprised if there is a back off to sub ten at some point. If God Forbid there is any sort of unfortunate drastic event or events that cause financial distress, BTC and crypto will be the first to be sold. Yes, even before gold, comic books, cars and the like. Crypto will be sold off far before anyone taps their cash savings or tax deferred accounts or traditional brokerage accounts.  So be prepared, diversify and watch the world. Good luck and stay informed.

George D. Greenberg, Esq.
"AttorneyBitcoin"
www.attorneybitcoin.com

Law Offices of George D. Greenberg
8440 West Lake Mead Blvd. Suite 112
Las Vegas, Nevada, U.S.A.,  89128