Light bets on social dos are part of India’s festive spirit around Diwali and safe ways to join in the fun. Log on to the Internet and peer into the cryptosphere, and one can find the distinctive air of a casino. If there is any supervision, there is very little movement of crypto trades, and now a lot feels wrong. Consider this week’s crash in the value of a token named after the Squid Game, a mega-hit survival serial on Netflix. After zooming to a peak of around $2,860 per coin, it reportedly fell to a fraction of its $0.01 issue price within a week. This squid coin was marketed online as a “play-to-earn” token for the theme game, Digital Affairs, which probably had nothing to do with the horrors depicted in the dystopian show, but its value was soon demanded. Soared on the wave which probably attracted crypto punters and inflated a huge price bubble. The damages left by this internet replay of ‘tulip mania’ are reprehensible as many buyers would not know what they were actually buying, let alone weigh the risks. Similar problems of mistaken identity arise if a crypto token surfaces that appears as if it is backed by a widely trusted brand, as was the case with Tata.
Since crypto issuance software can be based on something other than linkages that operate the blockchain ledger, they have grown wildly, even as the crowd of investors for the famous token made for a fly-by-night launch terrifying. Granted, prices of which can be rigged upwards by shady players to frenzy, capitalize on profits and then disappear. The Squid Coin website has disappeared, probably taken down by shady operators who have already made quick bucks. Meanwhile, the Tata Group is looking for legal recourse against a crypto coin that uses ‘Tata’ as its ticker ID. The coin is called Hakunamata and failed in the Delhi High Court to prevent Tata’s own issuer (and others) from using its trademark, which reportedly did not find sufficient support for the claim that it was made by a firm abroad. The token being operated was aimed at Indian buyers. . Apart from the finer details of the law, the likelihood of internet users in India seeing such crypto as a Tata offering can only be taken for granted too much for comfort.
Since India’s crypto boom has lifted restrictions on their trading by the Supreme Court almost two years ago, secure digital currencies have seen a lot of fair and square money, it’s safe to assume that crypto security levels vary widely. Huh. Not all buyers are aware of the coin-specific risks, unfortunately, or of the general pitfalls. Those tempted to trade on platforms that have no circuit breakers are especially vulnerable to wipe-outs. Given the scale of this web phenomenon and the signs of reckless enthusiasm, what is happening is worrying. While a recent study by BrokerChoose pegged crypto owners at 100 million in India, the world’s largest such group, a fifth of that estimate is considered more realistic by professionals in the sector. While we don’t have a reliable count, we clearly have millions of crypto dabblers in a market that has yet to be regulated. The Center is working on a bill for the same, but in the interim, a group of top crypto exchanges have resolved to adopt a joint self-regulatory mechanism to protect the interests of investors. In the same spirit, crypto advertisers should also strive to issue risk disclaimers that actually serve to inform people rather than flashing back screens. It is in the interest of our cryptosphere to assure investors that they will not be left out of the possibility that they were unaware.
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