“Wolf of Wall Street” Jordan Belfort has called initial coin offerings (ICOs) “the biggest scam ever.”
"It's such a huge, gigantic scam that's going to blow up in so many people's faces," Mr Belfort told the Financial Times.
"It's far worse than anything I was ever doing,” said Belfort, who spent 22 months in prison after pleading guilty to securities fraud and money-laundering. Since leaving prison he has earned millions as a motivational speaker and author.
Mr Belfort, who was played onscreen by Leonardo DiCaprio in a 2013 movie, said the techniques employed by ICO salespeople appeared to be similar to the “pump and dump” tactics used by boiler-rooms: get supply, promote aggressively, leak a little into the market, stir interest — perhaps via celebrity endorsements — then sell the rest before the price collapses.
Jordan Belfort is advising friends and family to steer well clear of ICOs. He says while most investors probably do not have bad intentions with ICOs, 5% or 10% trying to scam others is already a “disaster.”
So far this year, ICOs have raised more than $3 billion, according to Coinschedule.com.