The Wolf of Wall Street, whose securities frauds were recounted in the film of the same name – where Jordan Belfort was portrayed by Leonardo DiCaprio – told the Financial Times that ICOs were “the biggest scam ever” and that they would “blow up [in investors’] faces.”
It is the biggest scam ever, such a huge gigantic scam that’s going to blow up in so many people’s faces,” he said, adding: “It’s far worse than anything I was ever doing.
However, Belfort said there was nothing inherently wrong with the idea of cryptocurrencies.
Cryptocurrency expert and founder of London firm CommerceBlock disagrees and says the old guard of banking and finance are running scared.
Nicholas Gregory, founder and CEO of cryptocurrency enabler CommerceBlock’s comment can be seen below:
The old guard are being cut out by ICOs which means the banks, VCs and lawyers are losing billions. No wonder they’re upset.
It’s wrong to ban them because an ICO is just a way of crowdfunding investment for technology firms who choose to do it in cryptocurrency because that is their field.
In the old days – up to a year ago – you would go to a VC and they would decide whether to invest in your company and you would have to follow their rules. ICOs make it easier for companies to raise funds from more sources and free themselves from the straitjacket of VC interference.
Are there scams? Of course. But there are scams in every financial system from penny stocks to fraudulent gambling sites.
It’s too easy for critics to point the finger of blame at the technology and not the criminals who exploit every loophole in every kind of commercial environment.
Investors take a risk by buying into ICOs just as they do buying equities, even though they are not securities. But they are offered far greater transparency. There is more they can vet with ICOs because you can look at the source code of the firm you are funding. You can download the product and play with it. In the stock market all you get is a brochure.
This is why it’s more transparent and that’s why VCs hate it. The VC model is all about the 1%. Only a multi-millionaire could invest in Facebook in 2009. With the ICO model, if you and I spot the next Facebook we can get in on it.