ICO’s and pyramid schemes

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Published on January 18, 2018 by

Andreas Antonopoulos: How do we make people more resistant to ponzi & pyramid schemes? Does regulation stop them? Is the added attention a risk for the rest of the cryptocurrency space? As long as you don’t make the mistake of stealing from the rich, regulators are not very effective at stopping scams. Scams and schemes happen in both thoroughly regulated and unregulated markets. Most of what regulators do involves restricting entrants on both sides of the market, and by consequence limiting liquidity. They will continue to happen. Most investors will have to have to experience losing money (perhaps repeatedly) in order to learn. It’s very hard to just tell them, to convince someone who’s making returns they’ve never seen in their life that they are participating in a scam which will inevitably collapse. What you definitely don’t want to do is tell investors that if they outsource decision-making and risks, they will get bailed out; that will only make them stupider.

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