Buying crypto coins is extremely easy and can be done very
quickly. From the comfort of your own chair, you can create a
wallet and/or an account, deposit money into your account and then
you can get started right away. Projects anywhere that use
blockchain tokens, such as Crypto and NFTs are accessible to people
all over the world.

The prices of crypto currencies went up rapidly in earlier
years. Some analysts predicted that Bitcoin would reach the
five-ton value in the foreseeable future. As a result, a lot of
investment money flowed into that sector, both institutional and
private. A striking example is that the total market value of
Bitcoin
darkened a thousand-fold in less than 10 years from around 1
billion euros in 2013 to more than 1 trillion euros at its peak in
2021.

However, this enormous popularity also came with a downside.
Recent years have shown that the fast-flowing money has also ended
up with less trustworthy parties. In this article, I discuss
examples where things have gone wrong, what the developments are
and what you can do right now if you have fallen victim to
this.

The role of influencers

As mentioned, the barrier to investment is very low in crypto
projects. Therefore, investing in crypto was also popular among
young people and people who were not investing before. This was
cleverly capitalized on.

Influencers were approached to promote crypto projects among
their followers. Often they were paid very handsomely to do so.
Some launched their own coin. They promoted a so-called Initial
Coin Offering (ICO). The more successful projects raised as much as
hundreds of millions of euros.

Lawless

Market regulators such as the AFM and DNB in the Netherlands and
the SEC and CFTC in the U.S. initially mostly kept quiet. They
apparently did not want to get in the way of new developments, not
to stifle innovation.

At times it seemed like the Wild West, the cowboys had free
rein. Examples of practices so evil that the impression was given
that the law did not apply when crypto came into play. Not
surprisingly, there are already several examples where things have
gone wrong.

Painful

A well-known example is the FTX group. FTX was the second
largest crypto exchange. FTX promised “savers” an 8%
interest rate on crypto coins deposited with the exchange. This is
all without any risk. Its founder Sam Bankman Fried (SBF to
insiders) was lauded as a prodigy. How did he do it anyway? In
retrospect, the answer turns out to be simple: it wasn’t true.
The records of the U.S. trustee show that the management of the
group was a complete mess.

Things also went wrong with influencer Logan Paul’s project.
His project, a coin called CryptoZoo, could be used in a game he
would develop. He sold it to his fans as:“A really fun
game that makes you money.”The ICO raised a lot of money.
Problem was that the promises were not fulfilled and the promoters
it. In the Netherlands, there are also crypto projects where things
went wrong, such as Xpose Protocol and WindNL.

Disclosures on Youtube

On Youtube, the channel Coffeezilla, run by American Stephen Findeisen,
has become big doing research into abuses on the Internet. To his
credit, we know what happened to the CryptoZoo project.

In the Netherlands, the BNNVARA program and Youtube channel BOOS, with
presenter Tim Hoffman fulfills a similar role.

Even a lawsuit requires information. Therefore, the revelations
of these Youtubers are not only entertaining to watch, but also
very useful for anyone who has lost money in the projects they have
investigated.

Changing attitudes supervisors

The days of regulatory reluctance are now over. Nowadays, the
DNB warns investors against ICOs. International warnings and
enforcement actions are also on the rise. Increasingly vigorous
action is being taken by regulators and the judiciary at home and
abroad against excesses.

The U.S. government is leading the way. For example, the owner
of the bankrupt FTX concern has been arrested and the SEC is now
litigating Kim Kardashian who advertised a crypto product without
disclosing that she was paid for it.

Empty hands?

Among investors in crypto projects who have lost money, there is
often a perception that the law cannot offer solutions to them.
However, that image is far from always correct. In many cases,
there are possibilities for victims to take action through civil
law.

This does not necessarily require that something criminal
actually happened. Several grounds for liability are conceivable.
Sometimes there is in fact the issue of a security. Then a
liability can be based on the absence of the mandatory
prospectus.

In the US, some investors have started cases against the
influencers who convinced them to invest (including in FTX) with
false promises. At CryptoZoo, Logan Paul has announced initial
(incomplete) compensation under heavy pressure from
Coffeezilla’s disclosures. Even in FTX’s bankruptcy, there
is still a chance that a significant amount will be secured for
creditors by the trustee.

Take action

In other words, don’t jump to conclusions. It won’t be
the first time that those people who take action themselves get
their damages compensated, while the wait-and-see person misses
out.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.