Law 360 Piece From Ex-SEC Security Expert Bashes Bitcoin And IEOs For Use In Facilitating Crime

Ex-SEC Security Expert Bashes Bitcoin And IEOs

Since its Inception, cryptocurrency has received a mixed bag of reviews from members of the public with some heralding it as the next great innovation in the financial world while others see it as nothing but a scam. Even as crypto gains more and more adoption and acceptance in mainstream society, there are still those who refuse to accept it and continuously bash it, with one of the most recent of which is John Reed Stark, who is a cybersecurity expert that previously worked at the Securities and Exchange Commission's enforcement division.

This criticism was addressed in a Law360 column where Stark stated that the Securities and Exchange Commission should crack down on initial exchange offerings and referred to them as regulated crypto-casino fundraising mutation. According to him, the cryptosphere is a shady and sleazy place and the general public must be warned about it. He also stated that bitcoin is nothing but a con and the investors should avoid it, lest they lose their money.

Harsh Words

A good portion of Stark's column focused on initial exchange offerings which he stated are bogus investments which are only used to take advantage of unsuspecting investors. According to him the SEC is well aware of initial exchange offerings and will crack down on them in the near future.

“IEOs represent yet another blatant attempt to hijack a similar-sounding acronym — IPO — in an effort to lure investors seeking to get rich quick. However, just like ICOs, the IEO has not a single element in common with the IPO (other than the first and last letters of its acronym),” he said.

His criticism was not reserved only for IEOS but ICOs as well, which he says just like IEOs, are unregulated and that they are a medium for insider trading, fraud, and other illegal activity. This criticism was not limited to crypto-related fundraising methods but also extended to bitcoin itself, which he said is simply a valueless currency that is only good for facilitating crime and that because the industry does not have oversight, it is a growing hub for dangerous criminals and that retailers that embrace cryptocurrency are risking their reputation are putting themselves in jeopardy.

“Much of bitcoin’s value, outside of mere speculation, is derived solely from its ability to facilitate criminal activity. Need a fake I.D., bottle of opiates, a cache of credit card numbers, or a thousand Social Security numbers? Need a way to collect a ransomware payment? Need to fund terrorist-related activities? Need to hire a hitman? Cryptocurrencies like bitcoin have become the payment of choice for these, and a slew of other, criminal enterprises,” he said.

He also stated that bitcoin has become a tool for election tampering, making reference to the July 2018 indictment of Robert Mueller for attempting to influence the 2016 US Presidential elections in which was revealed that the conspirators used bitcoin to purchase several servers and registered domains for their shady activities. This, according to Stark, is further evidence of the shadiness of bitcoin and he is of the opinion that should be avoided by both the general public as well as serious investors because it has no merit.

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