Bill Harris, former CEO of PayPal and Intuit has claimed that bitcoin is nothing more than a scam which would eventually die taking billions of dollars from innocent investors. The founder of Personal Capital Corp gave many reasons to distrust the most popular digital currency in a piece for Recode.
He said, “I’m tired of saying, ‘Be careful, it’s speculative.’ Then, ‘Be careful, it’s gambling.’ Then, ‘Be careful, it’s a bubble. “Okay, I’ll say it: Bitcoin is a scam.”
He discredits all the crypto promoters who believe that bitcoin has value. As it is not accepted everywhere, it cannot be termed as a means of payment. Due to its extreme volatility bitcoin does not meet the requirements of a store of value. He also said that bitcoin’s perceived value reminds him of the Greater Fool Theory.
He continued, “It’s a colossal pump-and-dump scheme, the likes of which the world has never seen… the losers are ill-informed buyers caught up in the spiral of greed. The result is a massive transfer of wealth from ordinary families to internet promoters.”
By giving examples of WannaCry ransomware and Silk Road, he said, “Cryptocurrency is best-suited for one use: Criminal activity.” Moreover, the currency has made regular users trespass law by evading taxes on every sale.
He added, “All of this would be a comic sideshow if innocent people weren’t at risk. “But ordinary people are investing some of their life savings in cryptocurrency.”
He requested SEC and other financial regulators to take a bold step against bitcoin by saying “it’s time we gave them the legislative authority to do their job,”
On the other hand, the SEC has been skeptical about crypto dealings and is tightening its control over the community. Currently, SEC is dealing with the problem of ICO and its standing as a security or utility token.
In fact, SEC has previously said that it is not against the any ICO launch but wants to ensure that investors of the country are not getting duped.
Jay Clayton, Chairman SEC, said, “We seek to foster innovative and beneficial ways to raise capital while ensuring – first and foremost – that investors and our markets are protected.”
In 2017, SEC scrutinized DOA’s, Decentralized Autonomous Organization, model as it accused it of violating federal securities laws. It was charged with offering tokens against ethereum without any registration.
Co-Director of the SEC’s Enforcement Division, Stephanie Avakian, said:
“The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors and the integrity of the markets.”
In order to protect investors, the SEC Office of Investor Education and Advocacy has also issued a bulletin that explains the warning signs about an ICO not being registered.
Since its arrival, bitcoin has been a subject of debates and claims but until now has benefitted many investors around the globe. If it turns out to be a scam in future, then the world will lose billions of dollars in an instant.