Crypto may seem like it has a lot of scams popping up. But we are only seeing the monetary scams that have always existed throughout history. Crypto, in its more transparent nature, has just made it easier for us to unveil them. Scams can't hide as easily

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FTX's scam barely lasted under 3 years before too many people saw what was happening. And everything else from Bitconnect to Juicyfields, was called out very quickly.

Bernie Madoff was able to run his scam for more than 20 years. And even when people suspected something, it was still hard to prove it to everyone else.

There's actually nothing really new about the fraud we sometime see in those scam projects where people get rug-pulled. Nor about pump and dump schemes. Or any attempt at defrauding people.

It's the same fraud attempts that has existed since the birth of money.

The fact that there is so much money and growth involved in crypto, means that its lucrative for not only traders, but also scammers.

Same thing happened when the stock market became something more public, and became more lucrative. The early days of this new, more open stock market, opened the door to many scams. Including the infamous Charles Ponzi at around that time. But there were many less famous scammers who jumped in.

Wherever there is more money opportunity, there will naturally be more scam opportunity.

But the transparency of crypto has made a lot of the mechanisms much more visible. And they can be called out by the general public. You don't have to always wait for an inside whistle blower, or the government to catch it themselves.

There's not all these layers of 3rd party companies, shell companies, bureaucracy, and government to hide behind. The second your operation touches blockchain, smart contracts, defi, etc... you're gonna potentially leave traces for the public to pick up on. It's gonna be harder to cover up a scam when you operate in tandem with decentralization.

But what about regulation?

Isn't regulation what should solve this? Regulation took over 20 years to catch Madoff.

Regulation is actually already there for crypto. SBF has a financial company, and a US subsidiary that have to abide by corporate and financial regulation like anyone else.

The US subsidiary has to abide by US exchange and crypto regulation.

Just like anyone using or trading crypto, has to abide by their country's trading laws, pay their taxes on crypto trades, etc....

But the reason regulation may not always seem that effective for crypto, is probably because regulation for finance in general is a joke.

It all began in the 1930s, when the SEC was first setup, and one guy people thought had done a lot of shady trading in the 1920s, became the first chairman of the SEC.

From day one, they invited the wolf into the hen house.

Financial regulation has been a bit of a joke. If you don't believe that's the case anymore, you only need to look back at 2008.

Some of the biggest institutional scams resulted in 2008. Where companies sold junk bonds to people, disguised as A rated bonds.

Centralized institutions like Standard & Poor, that everyone has to trust, were giving out bullshit ratings, and taking junk bonds, and branding them as AAA rated.

Scam and fraud are always gonna be part of the system, and regulation hasn't done much to change that. But at least with blockchain technology, it will be a little more transparent, easier to catch, and create a lot of roadblocks for scammers as things become more decentralized and run by tighter algorithms with cryptography.

submitted by /u/fan_of_hakiksexydays
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