Fraud is Holding Back the Crypto Market. Will it Ever End?

2019 was the worst year in history for crypto investors. By all accounts, more than $4 billion had been stolen over the course of the year – more than double that of 2018’s $1.7 billion.

And while a few fraudulent instances account for most of the stolen funds, small-scale operations also do their part, deferring people from entering and returning to a highly-volatile scam-prone digital assets market.

Many think that it is regulation that has been holding the crypto market back, but essentially, all governments are trying to do with proposed regulations and bans is to prevent the fraud that has become, sadly, a fundamental part of the market.

Fraud in 2019

Rarely was there are month in 2019 when we didn’t hear about a major crypto exchange breach, often involving millions of dollars worth of crypto assets stolen.

In May, Binance lost around $40 million worth of Bitcoin. Singapore-based Bitrue lost over $4 million in June. In July, Japanese exchange BITpoint lost $28 million.

And while good exchanges cover the losses of customer funds with their own assets, the economic vacuum created by fraudulent activity remains there. Money that would have otherwise been used to help progress the blockchain ecosystem is used, essentially, as insurance.

But it’s not only crypto exchanges that are on the receiving end of malicious activity. Countless instances of phishing operations, mining malware, pump-and-dump schemes, and exit scams were also part of the fraudulent crypto equation of 2019.

In fact, Forbes called 2019 the year of the “exit scam”. With PlusToken’s $2.9 billion Ponzi scheme and countless other vapourware projects, it is no wonder that the 2019 crypto market moved mostly sideways, with rare occurrences of strong bullish and bearish trends.

Much like lottery winners and airdrop participants, malicious actors usually look to dump stolen funds regardless of price, seeing as they essentially made money out of thin air.

Bad marketing

But the economic damage…

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