Understanding Cryptocurrency: Scams, Exchanges and Staking
Cryptocurrency is a digital or virtual currency that is secured by cryptography, making it incredibly difficult to counterfeit or manipulate. Cryptocurrency is decentralized in the sense that it does not have a system of banks or other traditional financial institutions that act as intermediaries to facilitate its trade. No unified regulatory framework exists to govern it. With its peer-to-peer money exchanges online, it has become popular amongst users, as it avoids oversight and fees.
Recently, the United States Attorney for the Southern District of New York, Damian Williams, announced that ISHAN WAHI, a former product manager at Coinbase Global, Inc., pled guilty to two counts of conspiracy to commit wire fraud. Wahi was arrested and charged in July 2022 for providing confidential business information that he learned in connection with his employment at Coinbase to Nikhil Wahi and Sameer Ramani so that they could secretly engage in profitable trades around public announcements by Coinbase that it would be listing certain crypto assets on Coinbase’s exchanges. Nikhil Wahi and Ramani profited from Coinbase’s public listing announcements by selling their crypto assets on multiple occasions.
The Denver office of the FBI warns of increasing cryptocurrency scams, with about 46,000 people reporting they’ve lost more than $1 billion. People in Colorado lost about $25 million to investment scams in 2021. To prevent this, the FBI encourages people to be aware of the warning signs and be alert to the ways fraudsters try to reel them in.
In addition to knowing the warning signs of crypto scams, it is important to understand how to purchase cryptocurrency. You can purchase cryptocurrency through many different online platforms known as Crypto Exchanges, all via a medium known as a Crypto Wallet where you can store your currency and manage it as you see fit. Staking is also an important process of contributing to the security and operability of a blockchain network by pledging tokens to a ‘validator’ who processes transactions.
Cryptocurrency has taken a major role in the role of money. You can purchase goods or assets with Cryptocurrency, just like you use paper money, credit cards, or debit cards to buy things. With the increasing popularity of Cryptocurrency, users should remain vigilant and aware of the potential scams, as well as understanding the different exchange mediums and staking processes.
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