FBI warns of cryptocurrency – FBI warns of cryptocurrency…

FBI warns of cryptocurrency – Following the $5.6 billion…

Following the $5.6 billion losses in America’s crypto industry by scammers and criminals in 2023, law enforcement has been extra cautious. They spoke again during the recent US election.

Whenever there is a large and renowned financial system or platform, it draws attention from all sorts of people, including criminals. Cryptocurrencies were no exception.

In fact, it has been increasing yearly, and 2023 saw a 45% rise in it. Investors suffered the most from all the total losses (71%).

Since September 2024, Doland Trump and his family have been highly active in cryptocurrencies. The FBI already disliked this, calling it a hive of pervasive criminality.

With Trump winning the election in November, his family and associates are more at it now, providing bold proposals. Of course, this has caused the FBI to warn potential investors about the potential issue.

This article will discuss what it means for the crypto industry and what we can expect in 2025.

The Start of the Whole Crypto Situation with Trump and the FBI

You see, the FBI has been skeptical about crypto rules for ages. They have been hot on any crypto fraud for many years. In 2023, they released their cryptocurrency fraud report.

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This report showed just how much criminal activities are happening in this industry. It said-

“Since cryptocurrencies eliminate the need for financial intermediaries to validate and facilitate transactions, criminals can exploit these characteristics to support illicit activity such as thefts, fraud, and money laundering.”

According to Assistant FBI Director Michael D. Nordwall, criminals have been exploiting every nook and cranny of cryptocurrency categories.

Now, let’s come to September 2024. In case you didn’t know, Trump was strictly against crypto in the early 2020s. We have seen a constant back-and-forth among politicians, renowned people, and different parties regarding their stance on crypto.

Cryptocurrencies have gained support from both the left and the right, but they have also received many criticisms (again, from both sides).

Two popular figures who strictly opposed it were Gary Gensler and Elizabeth Warren. This argument about crypto is still present in the US (alongside other countries).

Trump’s Shifting Opinion on Crypto

After Trump started embracing crypto, we have seen many other big names do it, too. However, the events were not necessarily casual but correlated.

For example, Chuck Schumer, who previously supported Gensler and Warren, detached. Moreover, after a federal judge rejected Gensler’s attempt to stop a Bitcoin ETF, its price soared.

We should note that despite all this unfolding, many Americans are still sceptical about crypto. They believe that banks are still the safer way to trade than current cryptosystems.

However, it is still unclear how knowledgeable the participants were about crypto and DeFi in the Pew Study survey in 2023 that revealed this.

Trump’s shift towards crypto started early this year. Things turned interesting after Trump launched his crypto, WLFI, and it flopped on the first day.

Why Did WLFI Crypto Crash Despite Trump’s Victory?

On the first day of WLFI crypto’s release, things were already turning bleak for the authorities. Experts believe there are two reasons behind this. They are-

WLFI is Unavailable to Most

Not everyone can get their hands on the DeFi coin as its authorities have set strict criteria on who can buy it. The major requirements are that-

Living in the USA:

1. The buyer needs to be living in the USA. And,

2. The buyer must be an ‘accredited investor.’ Or,

Living outside the USA:

1. The buyer must be living outside the USA.

If you live in the USA but don’t meet the second criterion, you can’t even advance the KYC (know your customer) period on the WLFI official website.

So, what makes you an accredited investor? Investopedia has stated that the necessities to become an accredited investor, one must either-

1. Have a net worth higher than $1 million. And,

2. Have an annual income of $200,000 or higher. Or,

3. Be a director or executive of a company issuing unregistered securities.

It goes without saying that many people don’t match these descriptions.

Of course, the buyer can choose the ‘outside the USA’ option. However, that will require them to show proof of residency from any foreign nation.

WLFI Is Non-Transferable

You may have wondered from the last section: Can’t people from the USA just get someone from outside to buy it for them and later transfer it to their account? Well, no.

WLFI authorities made it impossible for anyone to transfer the token from one wallet to another. This trait stops people from bypassing the criteria for buying the token.

You may wonder—if the user can’t sell or transfer it, what use does it have? Nothing at the moment, really. They can only hold it for now and wait for DeFi protocols to come out.

When the DeFi protocols are launched, WLFI holders can vote on major proposals. Not many people have shown interest in the token with such limitations.

People’s Distrust of The Token

Despite the token’s website clearly stating that anyone can’t sell or transfer the token in the fine print, many didn’t notice it. It caused an outrage among many buyers who now believe it to be a scam.

Some even said that WLFI authorities knew people don’t read the fine print, so they added it there. However, we can’t blame the authorities for this.

There has been another problem. Many were confused on the KYC page. The confusion arose from two reasons-

• Some didn’t know what it meant to ‘live in the USA,’ as it didn’t say to have any citizenship.

• Some didn’t understand what it means to be ‘accredited investors,’ as the website didn’t mention the necessary criteria.

Overall, many stayed away from the token because they were either confused or sceptical.

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