- Former SEC Enforcement Attorney John Reed Stark describes NFTs as a giant Ponzi Scheme.
- Crypto and NFTs are not an investment but are the manipulation of the financial market.
- Out of the Top 34 Real World Blockchain Projects, 33 have failed to raise questions about the utility of the entire cryptocurrency.
Former SEC enforcement attorney John Reed Stark took the internet by storm as soon as an interview of him with Katie Greifeld, and Tim Stenovec went live on the Bloomberg Markets and Finance YouTube Channel. Addressing the NFTs as a “Giant Ponzi Scheme”, John addresses the NFTs as mere crypto nonsense that turns the victims into victimizers.
He addresses NFTs as the hyperlinks to a JPEG file or the metadata as some representation of an investment is absurd and ridiculous. Moreover, through his LinkedIn, he outright dismisses the use of blockchain, stating that there is no practical case scenario in the world.
Additionally, John Reed Stark has a solid opinion that crypto is not a currency due to its volatile nature and is not an investment as there are no regulatory oversight/consumer protections/net capital requirements making the fees too high. Additional drawbacks of using crypto are:
- NFT Marketplace is rigged with manipulation, insider trading and fraud.
- Taxes are too burdensome
- There is an absurd amount of cybersecurity risks to the users, leading to data leaks.
Additionally, John supports his claim by pointing out a study on Nik’s blog that states 34 Top Real World Blockchain Projects, out of which 33 have failed, raising questions about the utility of crypto and NFTs in the real world. Furthermore, blockchain, crypto and NFTs are very commonly and easily used to commit perilous crimes from ransomware, terrorism, human sex trafficking and much more.
He addresses that this financial offering has come up as SEC cracked the codes of initial coin offerings and SAFTs (Simple Agreement to Future Tokens), making it much more difficult for the investors and the financial advisors to manipulate the transactions, calling it a giant scam.