Investing.com - The Wolf of Wall Street thinks that Initial Coin Offerings are the biggest scam ever.
Initial Coin Offerings, or ICOs, are a method used by startups to raise capital. ICOs play on the popularity of cryptocurrencies among many investors and so far this year, ICOs have raised more than $3 billion. The legitimacy of ICOs is questioned by many investors, while startup companies argue that ICOs are a legitimate fundraising method.
However, ICOs circumvent the well-regulated, old-school methods of raising capital, and they can be fraudulent. Jordan Belfort, whose life inspired the 2013 blockbuster movie The Wolf of Wall Street starring Leonardo DiCaprio, apparently doesn’t think much of them.
The real-life Wolf of Wall Street was sentenced to four years in prison for defrauding investors of approximately $200 million in pump-and-dump schemes that used misleading information to artificially drive up penny stocks.
Speaking to the Financial Times on Sunday, Belfort commented on the ICO phenomenon, calling it “far worse than anything I was ever doing.”
The danger of ICO scams appears to be genuine, but that doesn’t mean they’re all bad. It just means that investors need to be cautious and look before they leap.