Cryptocurrency usage is rising in Australia. More and more Australians are using exchanges to buy and sell cryptocurrencies such as Bitcoin and Etherum. However, over the past few years, we’ve seen a rise in consumer harms on these exchanges, including a big increase in scams and the sudden collapses of exchanges.
CHOICE is writing a policy submission to the Government and would value your thoughts on the cryptocurrency industry. Your thoughts will be critical to our thinking in this imminent law reform debate.
What has your experience with cryptocurrency been? Please share any positive or negative experiences you’ve had.
My partners mother, who lives in mainland China, decided to invest in a cryptocurrency. Thinking that Bitcoin was already too expensive to buy into, she invested in Verocoin. As soon as my partner told me about this, I got her to contact her mother to reverse the transaction, but alas too late. She, (mother), has now found that the only use for her crypto coin is to pay her electricity account, which is going to last her longer than she will live! The value of the coin initially crept lower and lower but is now stagnant due to zero trading.
There is an interesting website which lists the dead and dying cryptocurrencies, and what a surprising number there is. Visit 99bitcoins dead coin list and wonder how so many scams can be perpetrated on the general public.
I am glad that Choice raises this issue and it will be interesting to see the forthcoming responses to your question.
Personally I have no experience in it and thus cannot contribute anything of value only that I kept far away from it as too many financial experts considered it to be on the same level as gambling.
If anyone has invested in a cryptocurrency in the past 6 months or so, hoping to make a little money, the values of cryptocurrencies have declined with some even collapsing and disappearing. Even those which were touted as being more secure, such as stablecoins, have also proven not be to stable with their values also plummeting causing many to lose considerable sums of money. The ABC has reported on these challenges of delving into a highly speculative market…
Maybe the investment principle that one should only invest in things they understand could not be truer in the current environment. Investing based on hype is fraught with danger.
I have been trading crypto for 4 years, actively for 3.5.
I currently work for a crypto software company.
Crypto markets are different from other markets (stocks, forex, futures) due to the increased volatility. They dump hard but also rise quickly.
They are manipulated, although high cap coins usually aren’t these days.
Like any type of trading or investing, with crypto you need to know what you’re doing and have an “edge”.
Yes, I’ve lost money to scams along the way, although it’s peanuts in the scheme of things.
–buying services (e.g. signals) that then disappear. In this sphere, most services are paid for with crypto and hence there’s no recourse
–buying signals that looked good but didn’t work
–buying coins on an exchange that didn’t properly verify that the listees were valid. They weren’t and ran with the money.
–trading on an exchange that was hacked (Cryptopia)
–buying coins (LUNA) that were hacked and lost 99.9% of value. (WHo knows, they might come back). I sold most when they were down 50%, so didn’t lose it all on that one.
The losses in each case were relatively small since I never invest much in any one thing. And I always keep reserves in case the market dips.
Sometimes my account is 40% up and sometimes it’s 50% down. So I don’t invest more than I can afford to lose.
Initially, I found the cryptosphere a horrible misogynistic space, populated by numerous frat boys. Most of them disappeared during 2018 when the market kept going down. Nowadays the crypto community I’m part of is great and I no longer feel the need to hide my gender.
My limited brush with cryptocurrency was an attempt to learn how to invest in it and use it. My skepticism about its genuineness was reinforced by the continuing lack of substantial information. I did a short trial, investing the minimum amount of about $250, registered my purchase and then tried to reverse it to see the cash return to my bank. Unsurprisingly, that proved too hard for my formerly keen band of advisors.
My belief is that regulations of commerce is intended to protect the consumer and improve the quality of the market. There is no such thing as a completely free market. Cryptocurrency seems to favour an unregulated atmosphere. It appears to me to be a part of the push for deregulation of commerce by some people with enough wealth to wield power.
The world will be a better place when we help the maximum number of players into the game, not if we continue to create a club of haves in a sea of have-nots.
Like other financial services, legal use of crypto therefore requires licensing of accountable providers, with recorded transactions which provide evidence to substantiate complaints.
Crytocurrency scams are becoming more and more sophisticated and common. It s extremely challenging to know what is genuine and what is a scam. Without government regulation which may including the licencing of the industry like other sectors associated with finance, it is very much the wild west…
One of the original purposes of cryptocurrencies was to break down barriers associated with government regulation. To disrupt the basis of the traditional financial system - currencies. While trying to achieved this aim, it has also allowed criminals to prosper in an unregulated environment at the expense of consumers/victims.
It would be interesting to know if Choice has received any updates on the proposed new laws to regulate exchanges, which were commenced by the former government. Such regulation could be seen as being a priority for those victims of scams or may be considering putting money into cryptocurrencies.
