Ex-fraudster Jordan Belfort has issued a stinging criticism of Initial Coin Offerings (ICOs), calling them the “biggest scam ever” and a problem that’s going to “blow up” in the crypto community’s face. These comments come after Belfort attacked the viability of Bitcoin back in September.
Belfort, who himself spent nearly two years in prison for securities fraud, knows a thing or two about high-stakes financial scams.
The man memorialized by Leonardo DiCaprio in Martin Scorsese’s Wolf of Wall Street is now telling his loved ones—and the press—that ICOs are going to end up wrecking countless amateur investors.
Perhaps Belfort sees some of his old “pump-and-dump” techniques at work today in some of the shadier ICOs in the crypto space.
Whatever the case, though, Belfort was unabashed in his latest comments to the press:
“[ICO] promoters are perpetuating a massive scam of the highest order on everyone. Probably 85 per cent of people out there don’t have bad intentions, but the problem is, if five or 10 per cent are trying to scam you, it’s a f**king disaster.
“It is the biggest scam ever, such a huge gigantic scam that’s going to blow up in so many people’s faces. It’s far worse than anything I was ever doing.”
The former Wall Street hot-shot went on to liken ICOs to “blind pools,” a financial practice popular in the 70s and 80s wherein companies wouldn’t disclose how raised funds were to be used.
And while Belfort has spoken critically about Bitcoin and other cryptocurrencies in general in recent weeks, his latest comments were specifically aimed at the scammers who are willing to use the ICO craze to shamelessly manipulate, or over-promise, eager investors.
“Everyone and their grandmother wants to jump in right now. I’m not saying there’s something wrong with the idea of cryptocurrencies, or even tulip bulbs. It’s the people who will then get involved and bastardise the idea.”
Agree or disagree, Belfort’s new comments will certainly stir the pot.
And they come at an interesting time, particularly as the Tezos ICO—the largest to date in history, having raked in what’s now worth over $400 million in bitcoins and ether—is now being investigated for securities fraud.
Jordan Belfort Has Specifically Attacked Bitcoin in the Past, Too
Belfort’s certainly not on board the ICO bandwagon, and other comments he made last month convey his general disdain of cryptocurrencies.
In an interview with The Street in September, Belfort blasted the fact that cryptocurrencies like Bitcoin weren’t backed by fiat or banks.
“[Bitcoin] is backed by nothing other than a program that creates artificial scarcity, it seems kind of bizarre to me.”
It’s clear, then, that this particular Wall Street vet won’t be buying any bitcoins or entering any ICOs any time soon.
Where do you stand? Does Belfort have valid points, or has he failed to gain a sufficient understanding of the crypto space in general? Be sure to sound off in the comments below.
Images via TMZ, Paramount Pictures