When fraud and embezzlement take center stage… The film norbourg hit the screens against the backdrop of an advertising campaign by the Autorité des marchés financiers (AMF) warning investors about the vulnerability of cryptoassets to fraud. Numerous attempts at crypto-related fraud are underway, writes the AMF on its site, and publishes a non-exhaustive blacklist of more than 220 names of sites and companies “carrying out potentially illegal risky activities in Quebec”.
We have seen the pandemic, with its low interest rates and the excess savings it has generated, stimulate the arrival of a new generation of investors and create fertile ground for speculation fueling the attraction for crypto-assets and igniting the universe of “meme” stocks.
Only for cryptocurrencies, the AMF has already recalled that the creation of tokens is easily accessible from a technological point of view. As of Friday, CoinMarketCap listed more than 10,000 cryptocurrencies claiming a market capitalization of US$1.85 trillion — after surpassing $3 trillion last November — with 60% of that capitalization going to bitcoin and ethereum. “This situation thus favors the proliferation on the Web of many tokens whose promoters sometimes give the promise of staggering returns from an investment project. These tokens are often available from decentralized platforms and operate automatically without human intervention,” warns the AMF.
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,” adds the Autorité.
This collateral effect of the pandemic has 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 or even elimination of transaction fees, usually without access to advisers or non-robot financial planners.
In its 2021-2025 Strategic Plan filed in May 2021, the AMF placed digital transformation at the forefront of its strategic orientations and noted that the growing entrenchment of electronic platforms in securities trading will be a long-term one. ” The fintechs deploy business models that provide their customers with a high level of personalization, as well as easy access, often through mobile applications,” she pointed out.
This rise is part of a context of increased confidence of consumers of financial products and services in their abilities. The regulatory authorities are thus concerned about a mismatch between the autonomy and the vulnerability of the small investor. One of the major distortions observed in this family of so-called independent investors comes from the notion of risk, which would be greatly diluted. The Financial Conduct Authority has already documented the emergence of a new generation of investors for whom the loss of capital is simply not part of the risk.
Citing a survey conducted by Bank of Canada staff, colleague Éric Desrosiers wrote that almost half of the 5% of Canadians who already held bitcoins between 2018 and 2020 reported having suffered a collapse in the value of their investment (18%), loss of access to their virtual portfolio (14%) or fraud (12%). Mainly composed of young men with university degrees, these investors demonstrated an above-average understanding of how this cryptocurrency works, but a lower level of financial knowledge.
Certain enthusiasm
However, the enthusiasm is very real. From individuals, but also increasingly from companies. The results of a study commissioned by the consulting firm Sage evoke the emergence of a new generation of financial directors more aware of cryptocurrencies and the metaverse. With the evolution of digital payments technology being what it is, the global study The Redefined CFO adds that while only 17% of finance managers in SMEs said they currently accept transactions in cryptocurrency, 33% plan to do so in the more or less short term. At the moment, the biggest hurdles surrounding the adoption of decentralized currencies are environmental, social and governance factors and the difficulty in finding the talent to manage them.