Home / Opinion / Views /  The cryptosphere must shun the air of a casino
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Light wagers at social dos are part of India’s festive spirit around Diwali and there are safe ways to join the fun. Log onto the internet and peer into the cryptosphere, however, and one can detect the distinct air of a casino. The hustle-bustle of crypto trades has had little if any supervision, and now much seems amiss. Consider this week’s crash in the value of a token named after Squid Game, a mega-hit survival serial on Netflix. After zooming to a peak of about $2,860 per coin, it reportedly dropped to a fraction of its $0.01 issue price, all within the span of a week. This Squid coin was marketed online as a “play-to-earn" token for theme games, digital affairs that presumably had nothing to do with the horrors portrayed on the dystopian show, but its value soon rose on a wave of demand that probably attracted crypto punters and inflated a gigantic value bubble. The losses left by this internet replay of ‘tulip mania’ are scandalous because many buyers may not have known what exactly they were buying, let alone weigh the risks. Similar problems of mistaken identity arise if a crypto token surfaces that looks as if it’s backed by a widely-trusted brand, as happened with Tata.

As crypto issuances can be based on little other than software linkages that operate blockchain ledgers, they have proliferated wildly even as an investor rush for well-known tokens has made eerie space for fly-by-night launches whose prices can be rigged upwards by shadowy players to stir a frenzy, encash the gains and then disappear. Squid coin’s website has vanished, perhaps taken down by shady operators who’ve already made a quick buck. Meanwhile, the Tata Group has been in search of legal recourse against a crypto coin that uses ‘Tata’ as its ticker ID. The coin is called HakunaMatata and Tata’s move to restrain its issuer (and others) from using its trademark failed at the Delhi high court, which reportedly did not find sufficient support for the claim that this token run by a firm abroad was aimed at Indian buyers. The finer details of law aside, the likelihood of such a crypto being seen as a Tata offering by internet users in India can only be considered too high for comfort.

Since India’s crypto boom after the Supreme Court lifted a ban on their trading nearly two years ago has seen plenty of fair-and-square money made on safer digital currencies, it’s safe to assume that crypto safety levels vary widely. Not all buyers seem aware of coin- specific risks, unfortunately, or even general pitfalls. People tempted to trade on platforms that have no circuit breakers are especially vulnerable to wipe-outs. Given the scale of this web phenomenon and signs of reckless enthusiasm, what’s going on is worrisome. While a recent study by BrokerChoose pegged crypto owners in India at 100 million, the world’s biggest such cohort, a fifth of that estimate is held as more realistic by professionals in this space. Though we have no reliable count, we clearly have millions of crypto dabblers in a market that is yet to be regulated. The Centre has been working on a bill for that, but in the interim, a clutch of top crypto exchanges has pledged to adopt a joint self-regulatory mechanism to safeguard the interests of investors. In the same spirit, crypto advertisers should also take the effort to issue risk disclaimers that actually serve to inform people instead of flashing past screens. It is in our cryptosphere’s interest to assure investors they won’t be left in the lurch by a possibility they were clueless of.

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