Consider what is known as a “rug pull” – which is simply the idea that a cryptocurrency or NFT is minted and the minters overpromise to potential buyers. Contrary to the previously discussed scam – pump-and-dump – rug pulls do not generally involve a promise of future increased value. Rather, they promise… virtually anything: video games, online casinos, networks which store medical records, etc. These promises frequently are illusory on their face, if not at least vague to the point of meaninglessness, and nothing binds minters of cryptocurrency and NFTs to their promises. Some research suggests that the particular population bias of crypto traders – typically younger, middle class men inexperienced in investing – make these scams easy to fall for. If something seems too good to be true, it just might be – whether on purpose or accident.
We will continue our discussion of cryptocurrency next time. If you are interested in the history and philosophy of the economy, bankruptcy, and debt, stay tuned for my blog posts. And, if you are thinking about filing, reach out to us at www.lifebacklaw.com.