Investors do not have the structural protections they have relied on for many decades. As a result, many have been victims of classic cases of fraud and abuse—some appropriately classified as “Ponzi schemes” under a high-tech veneer.
Moreover, while crypto-assets are hyped as “decentralized,” there has been an emergence of new, quite centralized intermediaries that are either not subject to or not compliant with appropriate regulation and supervision, which has perpetuated harm to consumers. Complicating matters further, these entities often seek out jurisdictions with loose or less developed legal and regulatory frameworks for financial activities.