Consumers are on their own in world of cryptocurrency – Bay News 9

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ORLANDO, Fla. — Cryptocurrency — which is basically digital money — has exploded in popularity in recent years, and a lot of people are curious about it. 

A lot of people are investing in it, too, including Jayson Moser.


What You Need To Know

  • Cryptocurrency funds, or digital money, can go missing overnight
  • Regulation is «very low to nonexistent,» UCF finance professor says
  • Without oversight, scams are common, Dr. Buvameshwaram Venugopal says
  • Only invest in cryptocurrency if you’re willing to risk funds, he says

Moser shared his experience with cryptocurrency as a warning for others.

Moser says he woke up to his Coinbase account wiped out, $2,000 gone overnight.

“It said zero, and I said, ‘Well, that can’t be right,’ ” Moser said.

So where did his money go? Moser said he didn’t have a clue.

“Eighteen emails later, 45 days later, no response. No meaningful non-automated response,” Moser said. “It’s hard to not feel like it’s theft! It’s hard not to feel like you gave $2,000 to somebody.”

And Moser isn’t alone. He shared a Reddit thread showing others who encountered the same problem.

University of Central Florida College of Business finance professor Dr. Buvameshwaram Venugopal said regulation of cryptocurrency is “very low to nonexistent.”

“The entire onus is on the consumer at this point in time,” Venugopal said.

Lack of government regulation is exactly what cryptocurrency founders wanted, Venugopal said. No centralized bank. No government oversight and no insurance for people whose money disappears.

“As of 2018, nearly 80% of the market are scams — $1.8 billion,” he said. “This is a lot of money that people are getting scammed out of. It’s very tough to identify.”

Since the government can’t easily regulate the industry, it’s a prime target for scammers.

According to FBI reports, the number of victims and money lost to virtual currency crimes rose from 2019 to 2020.

“This is kind of the wild west here,” Moser said.

Moser said he didn’t have any hopes of getting his money back.

Spectrum News then contacted Coinbase about Moser’s case. A spokeswoman immediately responded and stated, “The matter is now resolved.” She declined to offer details, citing customer confidentiality. 

Moser previously received a detailed response from Coinbase about his account, and the matter has been fully resolved. However, more information on the case was not provided because of customer confidentiality.

“We have made and continue to make significant investments in regulatory compliance and cybersecurity to earn the trust of our customers,” the letter said. 

“We are proud to be one of the longest running crypto platforms where customers have not lost funds due to a security breach of the platform, and we secure our customers’ funds with multiple layers of protection by employing what we believe to be the largest hot-wallet crime program in the insurance market,” the letter said. “As of December 31, 2020, over 15% of our full-time employees were dedicated to legal, compliance, finance, and security.

“Coinbase proactively engages with regulators in every market where we operate, and we invest heavily in regulatory compliance. This approach has allowed us to become the trusted entry point for people to interact with the cryptoeconomy.”

Moser said Coinbase put the money back in his wallet.

Two days later, Coinbase went public, becoming the most valuable U.S. exchange that day.

Venugopal said he believes the United States needs to find a way to regulate the industry before other countries do, to make it safe for consumers.

Until then? If you’re willing to take the risk, invest in cryptocurrency, he said. If not, don’t do it.

While Moser is relieved his case has been resolved, he said he is not willing to take that risk any more.

“My grandmother collected silver coins,” Moser said. “I think I’ll just stick with silver coins and not necessarily digital coins moving forward.” 

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