'Wolf of Wall Street' Jordan Belfort Warns of 'Massive Scam' With ICOs
If there is one thing Jordan Belfort has mastered, it’s definitely how to run a scam. The infamous “Wolf of Wall Street,” who served four years in prison for running a “pump and dump” scheme while working at his brokerage firm Stratton Oakmont that resulted in about $200 million in losses is now warning investors about ICOs, which he calls a “massive scam” in a new interview with the Financial Times.
“Promoters [of ICOs] are perpetuating a massive scam of the highest order on everyone,” he said. “Probably 85 per cent of people out there don’t have bad intentions, but the problem is, if five or 10 per cent are trying to scam you, it’s a f**king disaster.”
In fact, Belfort actually thinks that many of the ICOs are using the same “pump and dump” scheme that he used at Stratton Oakmont to “get supply, promote aggressively, leak a little into the market, stir interest — perhaps via celebrity endorsements — then sell the rest before the price collapses.”
Belfort also echoes Jamies Dimon’s analogy to the “tulip bulb” scams that swept through Holland in the 17th century in which speculators drove up the prices on worthless tulips. While Belfort says he doesn’t think there is anything inherently “wrong with the idea of cryptocurrencies, or even tulip bulbs,” he tells the Financial Times that the problem is “the people who will then get involved and bastardize the idea.”