Andrew Left, founder of corporate research firm Citron Research, has called cryptocurrencies a ‘fraud’. Left has made its brand one of the major short sellers. However, last year they announced that Citron Research would stop publishing reports about companies at fault and companies whose shares could be bought. However, the Left faced outrage after it was reported that the share price of video game retailer GameStop was high.
Asked about fraud in financial markets at a conference, Left said, “I think cryptocurrencies are outright fraud.” However, he did not state that cryptocurrencies whether they have investment or not. Reuters reported in December last year that the US Department of Justice had launched a criminal investigation into short selling on behalf of hedge funds and research firms including Citron Research. Regarding the investigation, Left said, “I hope the Department of Justice will one day find that short sellers do not exist.”
Last month, the Reserve Bank of India (RBI) termed cryptocurrencies as a clear threat, saying that anything with a trust-based value without any asset guarantee is only speculative. The central government has prepared a consultation paper on cryptocurrencies. Inputs have been taken from various stakeholders and institutions for this.
After the steep fall in the stablecoin Terra UST almost two months ago, there has been a demand for regulation of the crypto segment in many countries. In this episode, South Korea’s financial regulator Financial Supervisory Service (FSS) also decided to tighten the monitoring of virtual assets and analyze the risks associated with them. Stablecoins are cryptocurrencies that attempt to link their market price to a reserve asset such as gold or common currencies. These are more commonly used for digital transactions that involve converting virtual assets into real assets. Fast growing version of crypto stablecoin has emerged as a major medium of exchange.