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Jason Calacanis slams VCs who flip tokens to retail—warns ‘grift’ will have consequences

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Angel investor and VC Jason Calacanis recently slammed venture capitalists (VCs) involved in digital currencies on an episode of Bloomberg’s Odd Lots podcast.

Calacanis labeled the actions of some VCs “grift” and predicted that the Securities and Exchange Commission (SEC) and other enforcement agencies would come down hard on those responsible as the path to regulation picks up pace.

Who is Jason Calacanis, and what does he mean?

Calacanis is an American venture capitalist and angel investor. He was an early investor in companies like Uber (NASDAQ: UBER) and Robinhood (NASDAQ: HOOD). These days, he’s best known for his weekly ‘All In’ podcast alongside his friends David Sacks, Chamath Palihapitiya, and David Friedberg.

Calacanis recently appeared on an episode of the Odd Lots podcast in which he took VCs in the digital currency industry to task for flipping worthless tokens to unsophisticated retail investors. He predicted years of litigation and possible criminal charges ahead.

The angel investor stated his belief that the “overwhelming majority” of tokens are securities and that this would have consequences for those who issued and promoted them. He highlighted the difference between what VCs like him do (investing in early-stage startups) and what the ‘crypto’ VCs do (issuing worthless tokens and socially manipulating people into buying them with phrases like “have fun staying poor”). He said most of the projects are run by frauds, incompetents, or a combination thereof.

Opinion: The era of regulations is going to be painful, but it’s necessary

Everything we have been reporting on CoinGeek for the past several years points to Calacanis being right. The SEC and other regulators have warned us for years that regulations are coming, and they’ve been taking one steady step after another to stamp out the reckless criminality in the industry.

To believe that the digital currency industry can exist outside of regulatory purview is sheer denial. We’ve reported on the arrests and charges, the banning of anonymous transactions, the vows by regulators to tame the industry, and how country after country has cracked down on, regulated, and tamed the industry.

Indeed, there will be painful consequences for those who issued and promoted illegal securities and cost retail investors billions. While these people claimed to be for the little man, wanting him to have the same rights as accredited investors, the truth is that they’ve pumped tokens and dumped them on the very same people for years. Story after story has proven this, such as the recent arrest of a former Coinbase (NASDAQ: COIN) manager in a case linked to insider trading or how Ripple’s executives dumped billions of dollars worth of XRP during price pumps.

While this cleanup will be painful, and it will see most tokens crash to zero and stay there, it’s necessary for the industry’s long-term health. It’s high time that blockchains that offer real solutions and utility shine. They’ve been kept in the dark for too long while an unsustainable gambling craze has taken over, setting the technological progress the industry promises back by years.

Calacanis is right that fines, criminal convictions, and other painful consequences are coming. However, unlike the “crypto bros” who paint this as the government trying to keep the little guy from getting his piece of the pie, truthfully, it’s the opposite. When the grifters and scammers are swept away, those who want to provide real value will build a new world on Bitcoin SV. Then, the little guy will be liberated as micropayments, peer-to-peer transactions, and an open protocol anyone can build on takes center stage.

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