Crypto Companies Face Lawsuits As Theft Ramps Up

The crypto crash might be making headlines, but crypto theft and fraud should be the focus of regulators. Mike Papantonio is joined by attorney Michael Bixby to talk about this financial Wild West.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

The crypto crash might be making headlines, but crypto theft and crypto fraud should be the focus for regulators right now. It's an ugly story. Joining me to talk about it, this financial wild west that's taking place, is attorney Michael Bixby. Michael, I, you know, first of all, the whole crypto scene is kind of hard to follow to begin with. But then when you start saying this fraud is taking place, this scam is taking place, you start wondering, should I be messing with crypto? And I, what are the types of fraud that we're seeing. What's happening out there?

You're, I think you're exactly right, wild wild west because it's something that's been new for now for a number of years. People have been interested in it and you hear about, oh, all these wonderful, you know, crypto things that are going on and people are making a bunch of money and there's all these trappings with it. And so you've seen a lot of sophisticated scams and Pap that's the most amazing thing of the types of scams you're seeing. People where, where money's being stolen from people, you know, SIM swaps, people are getting, fraudsters are taking control of people's phones and, and getting into their accounts, getting into their Coinbase account, getting into their crypto account.

Isn't it part of, okay, but part of the problem is the whole idea behind this crypto is to have your, is to have the secrecy. But with that secrecy, there's a trade off, isn't there? That secrecy is so secret and it's so hidden and it's so far down there that you don't really know what's going on and you're, you're easily hacked in the process.

That's, that's exactly right. You have a, a system, you have things that are on the blockchain and so you can measure this. You can, you can follow it, but things can get moved around Pap and that's what's happening is that somebody's getting access to somebody's account. Right. And they transfer it over to somewhere else or they convert it to a different cryptocurrency or a stable coin or something like that. And unlike if you're at a bank, let's say you're at a bank, a major bank.

FDIC.

Exactly. You have FDIC. You also have the idea of reversing transactions. That's what you'll see. I mean, if, if there's somebody who's, who's stealing from a bank account, boom, it can be reversed. And one of the big problems.

But it can't here? I take it.

It, it, it can't, or at least the exchanges are not making the effort. So if you look, look at for instance, Coinbase is one of the most major platforms. It's a publicly traded company that's worth tens of billions of dollars. I mean, they're raking in money here.

Mm-hmm.

But what happens when somebody's, a regular person and we're not talking about these aren't oh, this is a meg, mega national corporation. We're not talking about Tesla getting scammed and Elon Musk getting scammed. We're talking about regular folks who either are getting scammed by someone and they're basically having these platforms, they're using the platforms as an instrumentality. The criminals are saying we know we can get away with it here. We know we can sneak in under the radar because frankly, here's one of the big issues, there's not enough support. I mean, there's been several exposes on this, for instance, with Coinbase, where they don't have enough customer support agents. There aren't enough.

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