With Bitcoin on the rise again at the end of the year, its critics have not hesitated to downplay the impact of its performance by pulling out old files. Among the old allegations that have resurfaced, we find in particular the one describing the cryptocurrency as a Ponzi scheme. While one internet user used this argument to attack Bitcoin on Twitter, an unexpected advocate of the asset stood out. Lawyer specializing in digital currencies at Anderson Kill, Stephen Palley was quick to point out the shortcomings of this accusation.
The Ponzi scheme literally has nothing in common with Bitcoin
“Just in case people forgot: Bitcoin is literally a Ponzi scheme. All the money invested in it disappears: $ 25 million / day goes to the miners, the rest to the few people who are smart enough to sell. Not a single penny is stored anywhere. This is the attack launched on Twitter that made Mr. Palley. As this was a legal proceeding, the lawyer then embarked on a defense. demonstrating point by point the arguments put forward by the opposing party.
He began by explaining how a Ponzi scheme worked, recalling that it was aboutan investment fraud in which fraudsters pay old investors with funds from new ones. He also added that claiming that $ 25 million in cash was given to miners every day was not true. Calling the accusations stupid, Mr. Palley invited the camp opposite use better arguments while relying on legal theories.
The price manipulation argument does not hold water
Faced with this defense, the detractors of the cryptocurrency released the argument of manipulation of asset prices to justify that it was indeed a fraud. Mr. Palley retorted then that although some people thought that Bitcoin was heavily manipulated it still did not meet the definition of pyramid fraud. Assuming for a moment that the cryptocurrency prices were really being manipulated, the lawyer recalled that it existed several products that are in this case without it being fraud or Ponzi.
” Among other things, intention to defraud should be shown, which means acting knowingly and with the intent or purpose to deceive or cheat and rely on false statements by defendants »He posted on his Twitter account to show the process to follow. As long as Bitcoin detractors are unable to provide such evidence, Mr. Palley no longer wants to see cryptocurrency be equated with a Ponzi scheme.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.
Whistleblowers now know what to do and in the meantime will have to put their accusations aside and watch Bitcoin’s strong performance. For those of them who have been negatively marked as trader Dave Portnoy, they can always try to rebuild their financial health by becoming active hodlers.