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Belgium vs. Crypto Scams


With rising interest in the Crypto and Blockchain space, the Belgian government has launched a website to educate the public on Crypto fraud. In that the Blockchain space is fraught with scams, that are apparently only 4% reported, it would seem that such an offering could only be good for the future.


What inspired the Belgian government departments called the Federal Public Services Economy and the Federal Services and Markets Authority to start such a website, were the local reports of citizens losing around $2.5 million in 2017, to Crypto scams.


According to reports that were supposedly done by these departments, this is where the previously mentioned 4% comes in. The FPSE and the FSMA have even gone so far as to estimate that Belgian citizens have actually lost an average of $152 million a year, although this number does not seem to have been confirmed by any hard data as of yet.


The key aim of the website, which the departments have called, “Too Good to Be True,” is teach the average investor how to recognize whether a Crypto project is a scam or not. In connection with this, an original report by Cointelegraph mentions the specific examples of a project promising guaranteed returns as well as “big profits,” and celebrity endorsements.


They also talk about checking whether the project has some sort of a “valid license,” although with global regulations as they are, it’s not clear exactly what this refers to. On the one hand, an all-encompassing Crypto or Blockchain license does not exist but it is possible that the FPSE and the FSMA are speaking in a more abstract way.


 Above all, what is arguably the website’s defining feature is that it offers users the option of reporting companies that they think are scams as well as some sort of feature called a “scanner,” which is said to look over websites to see if people have already complained about them in any fraud-related way.


As the website is in Dutch, it is difficult for a non-native speaker to understand but after a quick look, it also became clear that “Too Good to be True,” is running one or more social media campaigns to promote what it is doing. Finally, such a look also confirmed that most of the site is devoted to simply educating its readers about what Crypto is as well as what Crypto scams are.


Don’t despair if you’re currently living in a country that doesn’t speak Dutch. According to the same report by Cointelegraph, in May, the SEC actually put a fake ICO forward in order to show the masses what scam ICOs look like, first hand. If you’re interested take a look at Howeycoins.


Tech industry professionals like Howard Marks, the co-founder of Activision/Blizzard Entertainment, claim that this fake ICO stems from the SEC feeling like their efforts, up to now, have been for naught. More precisely, this is mainly due to the fact that ICOs don’t seem to be heeding the SEC’s guidelines related to selling securities.


According to Howard Marks, the name Howeycoins, is a direct reference to what is called The Howey Test in the world of traditional finance, which boils down to a simplified way of determining whether a market asset may be classified as a security. At the same time that this test exists, one could make the point that the reason that Crypto projects aren’t heeding SEC guidelines, is because they aren’t quite sure what they are.


While this fake ICO is a good step towards preventing the mass scamming of future Crypto investors, its success depends on the word getting out about what it is and why it is important to pay attention to. Furthermore, as mentioned above, since we still don’t have clear guidelines across the board, it is tough to know how to do business within the lines. Until the SEC does create clear regulations that are accepted by the industry as a whole, then we will have to live in our current purgatory, for the foreseeable future.




By: BGN Editorial Staff

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