Crypto-assets again occupy the center of the alert systems of securities regulators this year. It must be said that 2022 has been a year rather rich in cryptodramas, with social networks as the perfect amplifier.
For 2022, it has already been written that the pandemic, with its low interest rates and the savings surplus it has generated, has stimulated the arrival of a new generation of investors and created a fertile ground for speculation fueling the appeal of crypto-assets and igniting the universe of “meme” stocks, these stocks that have gone viral.
The craze for the spontaneous acquisition of foamed shares on social networks for the purposes of mimicry, solidarity or even shareholder activism has broadened the scope of action. “Because of the immensity of the Web and the use of social networks, in particular instant messaging applications which allow the establishment of private exchange and discussion groups, it is often impossible for regulators to be able to intervene. preventively,” lamented the Autorité des marchés financiers (AMF).
It should be added that this collateral effect of the pandemic had the consequence of accelerating a fundamental change, already underway, under the influence of technological innovations and the robotization of the trading market. It was bolstered by a drastic lowering, if not elimination, of transaction fees, usually without access to advisers or non-robot financial planners.
It all came together last year. As a corollary, the number of complaint calls relating to cryptoassets received by the AMF last year amounted to 474, almost 75% more than in 2021 and 11.5 times more than the 41 complaints from 2020, according to data collected by La Presse+. On its site, the Authority gives a list of sites and platforms with potentially high-risk activities or subject to a warning extending over pages and pages. The market capitalization of the crypto universe may have been reduced by two thirds last year, to be around US$1 trillion today, there are some 22,700 cryptoassets on CoinMarketCap and more than 550 platforms trading these days. these have daily trading volumes of more than US$50 billion.
Prevention month
In this fraud prevention month of March, the AMF returns to the weight of social networks, particularly felt in the crypto universe. “When they want to invest independently, consumers increasingly favor social media as a source of information, or too often misinformation, about financial products and services,” said Louis Morisset, p.- in a press release. Managing Director of the Authority. “Their financial decisions are thus increasingly dependent on ‘influencers’, whose objective is often not to adequately inform their audience, but rather to generate the greatest number of views or clicks, or to profit financially from a craze for securities or cryptoassets in which they have sometimes themselves invested. »
Contacts under the influence of publicity on social media, creation of a relationship of trust, high returns that are dangled, FOMO syndrome (for Fear of missing out), this fear of missing something being particularly exploited on the networks… One of the main entry points for fraud is at the level of the initial emissions of crypto-assets or tokens, known by the English acronym of ICO. “ICOs operate in an environment conducive to manipulation and fraud. The creation of tokens is easily accessible from a technological point of view, and the marketing of these on certain decentralized exchange platforms is done just as easily, without any intervention or authorization from a third party. […] It is very easy to find websites on the Internet that explain how to create tokens and how to make them available for trading on the blockchain in a few minutes, ”recalls the AMF. Especially since many of these tokens can be purchased or traded on decentralized and robotic platforms.
Young people most at risk
From a broader perspective, and within this larger digital universe, the Annual Fraud Study published by the Chartered Professional Accountants of Canada (CPA Canada) highlighted that despite numerous reports of fraudsters specifically targeting an older demographic, three in five (63%) aged 18-34 say they have been victims of at least one type of financial fraud in their lifetime — a number that drops to 39% for those aged 35-54 and 31% for people aged 55 and over.
“The use of online services and personal devices in everyday life is becoming commonplace, especially among young people […]. The more we go on the Web, the more we lend ourselves to scams. Great caution is therefore required, ”we can read.
In this study, credit card fraud remains the top type of financial fraud for 21% of credit card users, followed by email or phishing fraud (8%) and debit card fraud (8%). debit card users).