Cryptocurrency con worse than mine, says 'Wolf of Wall Street'
The American stockbroker immortalised in the film The Wolf of Wall Street has warned that the craze for initial coin offerings (ICOs) has become "the biggest scam ever".
Jordan Belfort said ICOs - a new fundraising method linked to cryptocurrencies like bitcoin - are "far worse than anything I was ever doing".
Belfort, who was played by Leonardo DiCaprio in the 2013 film, spent 22 months in jail for fraud after running scams that cost investors around $200-million.
Since leaving prison he has earned millions as a motivational speaker.
ICOs involve a company issuing cryptographic tokens, usually in exchange for bitcoin or ether, as an alternative to selling shares or raising debt.
Those cryptographic tokens can then be separately traded, or exchanged for services from the company itself.
Over $2-billion was raised in ICOs in the first nine months of 2017, according to CB Insights.
However, many figures have warned that ICOs, and cryptocurrencies in general, are in a bubble, with rising prices prompting more speculative activity, which in turn pumps up prices.
Some have lost millions in fake or hacked ICOs, leading to growing regulatory scrutiny.
"It's the biggest scam ever, such a huge, gigantic scam that's going to blow up in so many people's faces," Belfort told The Financial Times.
"Promoters [of ICOs] are perpetuating a massive scam of the highest order on everyone. Probably 85% of people out there don't have bad intentions but the problem is if 5% or 10% are trying to scam you it's a f****** disaster."
China has banned ICOs and the UK's financial watchdog has warned investors not to rely on them. However, those who have backed them have seen enormous returns.
- The Daily Telegraph