The Malta Independent 20 March 2019, Wednesday

TMID Editorial: Opening the floodgates - Beware the crypto cons

Thursday, 10 January 2019, 10:46 Last update: about 3 months ago

Any new, groundbreaking technology or financial investment vehicle is inevitably fraught with danger, and perhaps none more so than the fledgling cryptocurrency and Bitcoin frontiers that the government is pushing so hard.

And while it is perfectly understandable that in such enterprises the early bird catches the worm, the country has also inadvertently opened itself up to those who would seek illicit gain from what could be a perfectly legitimate and brave new sector.

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A couple of months back this newspaper had carried an article about how the Prime Minister himself was being impersonated online by a what appeared to be a Chinese conman encouraging people, in the Prime Minister’s name, to buy the cryptocurrency products. It was an obvious con but nevertheless the individual had managed to garner over 1,300 followers, most of whom were Maltese and included senior politicians.

At the time the Prime Minister’s office preferred not to comment on the situation, perhaps for fear of bringing the Bitcoin sector into disrepute.

Since then, the number of bogus social media advertisements mushroomed and quite clearly grew out of control until the same office was compelled to file a police report over the fake news doing the rounds on Facebook and asked the police to investigate the phony financial enticements being sold in the Prime Minister’s and other ministers’ names.

The fake news adverts and websites point the user to fake news websites making claims about unprecedented government investments or programmes as well as websites promoting cryptocurrencies like Bitcoin.    

Just yesterday, a pair of television presenters, as reported in today’s issue, were similarly compelled to file police reports over a similar ploy that roped them into the scam by creating an entirely fake story about how they had made Bitcoin investments on live television after being prompted to do so by a well known personality.

It was all completely fake but there was a certain amount of ingenuity integrated into the story that very well could have fooled the more susceptible among Malta’s sprawling social media community.

Now the problem is that when one sees such scams being perpetrated in broad daylight as it were, one truly wonders what is happening in the higher echelons of the cryptocurrency and Bitcoin sphere.

As a nation, we should be very careful of what we are opening ourselves up to because our hard-won reputation in the financial services sector has already taken multiple blows lately. And with trust perhaps faltering, one major scandal from the country leading the global cryptocurrency charge, us, could very well spell out the ruin of not only the crypto sector but the repercussions on the wider financial services sector could be brutal.

The country’s headlong rush into the murky cryptocurrency and Bitcoin worlds renders the need for our reputation to be squeakier than squeaky clean.  We really cannot afford any more blemishes on our carefully-constructed financial services sector, where reputation is paramount and where serious investors will begin to fear to tread should the country show itself to not only be open to new types of business, but also to the conmen that inevitably come with those new types of business.

 

 

 

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