Baby Boomers, blockchain and boiler rooms


As an investor, you are always looking for a new market or a piece of information that will give you a competitive edge. When discovering new information on the latest opportunities, you are rightfully skeptical of some and seize upon others. The integration of technology in our daily routines has opened up a new realm of possibilities in both our professional and personal lives, but with that, a new field of risks too.

What risks are emerging for investors in online markets?

The risks of online markets are known, but who is creating various schemes is not. One emerging market lies in cryptocurrencies like Bitcoin, which older generations of Americans have yet to embrace. According to Coin Telegraph, an independent cryptocurrency publication, people age 55 and older make up less than seven percent of investors and users in an $87 billion market.

While this statistic is probably unsurprising to many, it could be indicative of the risk older Americans see in a market that is emerging, volatile, optimistic and unknown all at once. Many of the same issues Americans saw in the early days of Wall Street are popping up in online cryptocurrency markets.

But, that doesn’t mean cryptocurrencies haven’t provided the larger economy with just volatility. Cryptocurrencies rely on what is known as a “blockchain” to record transactions publicly. Financial service companies at-large are adopting this same technology in their businesses as a way to secure online information, according to Harvard Business Review.

Cryptocurrencies mimicking the stock market

While financial service companies are incorporating the benefits of the blockchain, cryptocurrencies are modeling Wall Street in their public offerings. According to Coin Telegraph, cryptocurrencies are now establishing Initial Coin Offerings (ICO) as a way to gain capital and a pool of investor voting powers early in a venture.

However, where there is money to be made, there are people who want to take advantage of potential investors. In August, police in London shut down a ‘cryptocurrency boiler room’ which offered digital investments that didn’t exist. People who were tricked by these boiler room cold calls are probably looking for a way to recoup their losses, but technology adds another layer of difficulty to tracking down who is responsible for scams.

Anonymity leaves many people in the dark

Even individuals who use cryptocurrencies legitimately enjoy a high degree of global anonymity in their operations. Transactional accounts and their users are not identified by a name or business, but only a set of digits similar to a bank account routing number. Because these cryptocurrency markets are still emerging, so is the surrounding law. Many questions regarding enforcement of and justice for securities law infractions in online markets have yet to be answered, which is why attorneys are tasked with finding them.