| | | Good afternoon. Well, that was fun… right? | There’s not much to be said about the Trump-Harris debate form last night. No mentions of crypto, either. | On one hand, we have an old bully who acts like he’s trying to pull off his best Howard Beale impersonation… On the other, a shape without form with a headpiece filled with straw. Alas! | Today’s Stories:
🏇 $4 Trillion AUM State Street Enters Crypto ETFs
🕵️♂️ FBI Releases Crypto Crime Report | Today's newsletter is 812 words, a 5-minute good read. |
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State Street and Galaxy Digital Launch New Crypto ETFs |
State Street Global Advisors, one of the world’s largest asset managers, and Galaxy Digital (GLXY), have partnered to begin offering a set of new crypto-focused ETFs. |
The new ETFs will give investors active exposure to a combination of both blockchain-associated companies and cryptocurrencies through futures or other ETFs. |
The three newly launched ETFs are: |
Digital Asset Ecosystem ETF (DECO) Hedged Digital Asset Ecosystem ETF (HECO) Transformative Tech Accelerators ETF (TEKX)
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Why it matters: State Street Global is the third largest asset manager in the US with $4.4 trillion – behind only BlackRock and Vanguard. This is the companies first major foray into the crypto industry. |
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Crypto Crime Is On The Rise. What’s New? |
The FBIs Internet Crime Complaint Center (IC3) just released its 2023 Crypto Fraud Report, in an effort to bolster greater awareness for today’s trendy schemes and educate the public on ways to protect themselves against frauds. |
As one would expect, rising crypto prices (circa 2023) equates to rising criminal activity, scams, and total losses. But take it all with a grain of salt (more on that below). |
First, some highlights: |
Growing complaints: IC3 received 69,000 complaints from the public regarding financial fraud involving the use of crypto in 2023 – a 30% hike from 2022. Rising losses ($): Estimated losses totaled more than $5.6 billion – a 45% uptick from last year. Small number, big impact: The number of crypto-related complaints represents only ~10% of the total number, but the losses associated with these complaints account for ~50% of the total losses. Boomers are getting rekt: People over the age of 60 filed the most complaints in 2023, followed by consumers in their 30s and 40s.
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What’s Trending In The World of Crypto Fraud? |
Investment scams are most prevalent, representing 71% of all losses related to crypto. This is where scammers offer big returns and false promises, and coerce retail investors to use fraudulent websites, applications, and so on. Much of this activity is socially-engineered, or “confidence-enabled” with the use of dating apps, social media outlets such as telegram and X, and other online communities. |
Other kinds of trendy scams the FBI warned of include… |
False job advertisements that are linked to "labor trafficking at scam compounds overseas.” Liquidity mining schemes Play-to-earn gaming applications Fake recovery schemes Cryptocurrency kiosks / ATM-like devices
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Our Take |
The headline-grabbing figure here is the $5.6 billion in crypto-related losses, which makes up half of the total financial losses reported to IC3 in 2023. But let’s consider that IC3 only collects data from internet crime reports. |
Also worth noting: 16% of reported complaints came from outside the U.S., with losses converted from foreign currencies to USD, and the potential for duplicate complaints, as IC3 has acknowledged.
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If we were looking at clean data and making a true comparison of total fraud in the U.S., including physical assets, traditional finance, and public equities, crypto would still represent a relatively small portion of the overall fraud landscape. |
But, with all that said, rising crypto scams are certainly still an issue – especially at a time when retail adoption appears to be flatlining. |
Who should we blame? |
The crypto industry itself. We need more utility, not higher APYs. When your selling point is only lending, staking rewards, or high yields — you don’t look much different than the latest anon pumping the flavor of the day with a sketchy URL and rocket emojis.
Regulators. This is what happens when regulators actively target legitimate U.S.-based crypto companies – more consumers get pushed toward riskier, unregulated platforms. Until there’s better regulatory clarity and guidance, many won’t be able to differentiate between whats legit and what isn’t.
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At the end of the day though, while American’s losing more ~$5 billion in fraudulent crypto-investment schemes is a big deal, at the same time American’s lost more than $66 billion in casinos. Caveat Emptor. |
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 | Naval @naval |  |
| The real tax is society forcing otherwise productive people to pay attention to politics. | | | 12:56 PM • Sep 11, 2024 | | | |
| | 12.1K Likes 1.49K Retweets | 419 Replies |
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 | Cory Bates @corybates1895 | |
| Bitcoin is now older than the stock market. | |
 | | | 11:49 PM • Sep 5, 2024 | | | |
| | 5.07K Likes 914 Retweets | 150 Replies |
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