Hey everyone, it’s Finance Fridays again. This is kind of a post in combination with Whatever Wednesdays because it involves Crypto. Today, we’re going to talk about “Crypto, Scams, and Physicians”.
Crypto, Scams, and Physicians
First things first.
I’m probably one of the very, very few doctors that still talks about Crypto. Since the “bubble” of 2017, and “crash” of 2018, crypto has been in a bear market, and rightly so. They really haven’t produced anything of value yet, and it’s basically just been speculation run wild.
That said, I chose my horses (Cardano [ADA] and Ripple [XRP]) back in 2016 or so and have just let them go. I’ve always understood that this was a high risk gamble. As such, I purchased crypto with money I was ok losing. This was a high risk, high reward gamble — essentially like going to Las Vegas and playing some slots. That said, I also knew I was investing for the long term, with no plans to even think about selling until 2025. At this point, I doubt I’d even sell in 2025, it’s looking more like 2030 or so. I paid my taxes on the profits I made (on paper), and am currently just sitting on “my bag” until then.
On this little blog of mine, I’ve always warned people about Crypto:
Crypto is not an investment. It’s gambling.
Ok, so did something happen?
There is currently an SEC complaint about an Ohio man, Michael W. Ackerman, of defrauding 150 investors in a cryptocurrency trading scheme.
You can go ahead and read the entire complaint in the SEC link above. However, the long and short of it was this guy claimed he had created a proprietary algorithm for cryptocurrency trading. Of course, the promise was massive returns and photoshopped screenshots of holding $310 million in assets were utilized. The long and short of it is that is was a classic scam, defrauding people of their money on promises which were too good to be true.
Investors were promised 50% of the account’s profits. This kind of return should throw up red flags everywhere. However, greed tends to blind people from the truth.
This happens all the time, why does this matter?
The reason I am bringing it to your attention is because this person managed to infiltrate a Physicians group on Facebook. It’s called Physician Dads Group (PDG). I actually know about this group, one of my friends is in it. It’s actually a closed group and you need to be invited to join and then be ok’d by the admins. As such, there is some semblance of security with the knowledge that everyone is a physician.
In this particular instance, Ackermann had a surgeon accomplice. I am assuming they managed to infiltrate the Physician Dads Group (PDG) and specifically target physicians, through him.
You can read more about it here:
I just wanted to bring this to the attention of physicians. There are scams that specifically target us. Like I’ve said before, physicians tend to tunnel vision into a mindset of “leave it to the professionals” on anything outside of medicine. This particular scam managed to get money from 150 different investors, the majority of which were physicians.
Be careful out there. If something seems too good to be true or you don’t understand it — stay away. Don’t trust everything you read and please do your own research (DYOR). If someone is pushing/pulling you into an investment, you should stop and wonder why this situation is so high pressure.
I also want to explain that things like this can happen to anyone. It’s the sensation of getting caught up in something new and/or “getting on the ground floor”. The idea of “I know something before everyone else does and it’s going to make me rich” is a normal human initial reaction.
However, you need to be able to sit down and blow away all the smoke and mirrors and see what is actually there. In this particular instance, this “miracle algorithm” didn’t actually exist and the fund itself didn’t even convert most of the holdings into cryptocurrency.
What can I do?
There are a lot of good sayings about how to avoid scams.
Investor.gov has a good article which I recommend you read here:
I think the most important one is that if it seems too good to be true, it probably is.
Be careful of claims that an investment will make “incredible gains,” is a “breakout stock pick” or has “huge upside and almost no risk!” Claims like these are hallmarks of extreme risk or outright fraud.
The words “guaranteed returns” should also set off red flags everywhere.
Don’t invest in something you don’t understand. Every question you ask should have an answer you are happy with before you invest.
Be aware of these phrases:
“Once in a lifetime opportunity.”
“Will be gone tomorrow.”
“Everyone is buying it.”
Also, be wary of any “free lunch”. You don’t owe anyone anything for a free lunch. Because, you need to remember, there is no free lunch.
Crypto, Scams, and Physicians
Be careful out there
If it’s too good to be true, it probably is.
There ain’t no such thing as a free lunch.
Agree? Disagree? Questions, Comments and Suggestions are welcome.
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