Tag Archives: Securities Laws

0205 2015 Bernie Madoff’s Ponzi scheme in the making again – discussion with a centralized payment exchange company official trying to pump their new fiat cryptocurrency

Within the past week I came across and exchanged a few detailed email discussions with a dominant company trying to sell their new fiat cryptocurrency via a scheme that smacks of an IPO (Initial Public Offering) or a Private Placement sharing offering in the stock market. The problem is that they are not properly issuing a stock of a company through a normal securities broker dealer but rather trying to sell in the open market their own new fiat cryptocurrency themselves!

I see the company as perhaps having built a good payment system only, which has yet to be verified. For the version of the new fiat cryptocurrency that they are trying sell to the public on the payment exchange that they have built, it is a bit naive and may even be wishful thinking. They are also trying to keep a big chunk of each new issuance to themselves.

Even Uncle Sam may not be able to pull off such as good deal in issuing a new fiat national currency. I wonder how they could continue to hope to convince people to pay for it and use it. I was told by the official that they had recruited top tiered industry luminaries and ex-government officials as board members and hence the value of their new fiat currency is partially attributable to “who they are”. He tried hard to legitimize what they are doing and distance himself from having to do a security offering under the securities laws. I was not convinced. It is just too obvious.

What they are doing is like hoping to create wealth bubble out of thin air with a Ponzi game. Sooner or later it will burst when people come to realize there is no intrinsic value in their new fiat cryptocurrency. Their fiat cryptocurrency also seems to be primed to be used as a perfect pump and dump candidate.

Mark my words, it is a big disaster in the making. Watch out SEC!

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