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‘Trading is gambling, no doubt about it’ – how cryptocurrency dealing fuels addiction | Cryptocurrencies

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Steven has lost more bitcoin than most people will ever own.

Raised on the remote Shetland archipelago, he left school at 13 to become a trawlerman before moving into construction, eventually earning £85,000 a year digging tunnels for Crossrail.

Despite his self-made success, compulsive cryptocurrency trading, alcohol and drug use took over his life.

In the fog of multiple addictions, he lost the “addresses” of between five and 10 bitcoins, rendering his digital buried treasure – worth up to £300,000 today – impossible to retrieve.

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What is cryptocurrency?

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Cryptocurrencies are an alternative way of making payments to cash or credit cards. The technology behind it allows the ‘money’ to be sent directly to others without it having to pass through the banking system. For that reason they are outside the control of governments and are unregulated by financial watchdogs – and transactions can be made in a way that keeps you reasonably pseudonymous.

If you own a crypto-asset you control a secret digital key that you can use to prove to anyone on the network that a certain amount of that asset is yours. If you spend it, you tell the entire network that you have transferred ownership of it, and use the same key to prove that you are telling the truth. Over time, the history of all those transactions becomes a lasting record of who owns what: that record is called the blockchain.

Bitcoin was one of the first and biggest cryptocurrencies and has been on a wild ride since its creation in 2009, sometimes surging in value as investors have piled in – and occasionally crashing back down. Dogecoin – which started as a joke – has also seen a stratospheric rise in value.

Sceptics warn that the lack of central control make crypto-assets ideal for criminals and terrorists, while libertarian monetarists enjoy the idea of a currency with no inflation and no central bank.

The whole concept of cryptocurrencies has been criticised for its ecological impact, with “mining” for new coins requiring vast energy reserves and the associated carbon footprint of the whole system.

Richard Partington and Martin Belam

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Steven spotted the potential of bitcoin early and he had a talent for trading. But even if he had that money now, his addiction means it would soon be squandered.

“Trading is gambling, there’s no doubt about it,” he says.

“I studied and studied. I taught myself how to be a good trader and tried really hard to manage my accounts and stick to a set of rules.

“But my mind would twist and I’d go all in, like a poker player that thought he had the perfect hand. I was convinced I was going to be a bitcoin millionaire.”

Now in recovery at the Castle Craig residential treatment clinic in Scotland, Steven fears that legions of young people are being lured into high-risk trading and potentially addiction, based on the same misguided quest for untold riches.

“A whole generation think that with a little mobile phone they can win, that they can … beat the market,” he says.

“It scares the bejesus out of me.”

Representation of cryptocurrency Dogecoin.
Representation of cryptocurrency dogecoin. Photograph: Dado Ruvić/Reuters

Steven’s fears are founded partly on crypto’s rapid emergence into the mainstream.

When he started investing in 2015, digital currencies meant nothing to most people.

Now, they are being touted as a more democratic alternative to a monopolistic and exploitative global financial system.

As the Guardian revealed on Friday today, crypto firms launched a record-breaking promotional push in London last year, targeting millions of commuters with 40,000 adverts on billboards, at tube stations, in carriages and across the side of double decker buses.

Advertisers included relatively obscure names such as Hex, Kraken and Puglife about whom consumers know little, if anything.

Meanwhile, football clubs and players, not to mention globally recognised celebrities, tout crypto investments on a daily basis via social media.

This week, reality TV star Kim Kardashian West and boxer Floyd Mayweather Jr were named in a lawsuit alleging that they helped promote crypto firm EthereumMax, as it made “false and misleading” statements that left investors nursing heavy losses.

An Instagram post about EthereumMax, to Kardashian’s 250 million followers, may have been the most widely seen financial promotion of all time, according to the head of the UK’s Financial Conduct Authority (FCA).

Yet despite their ascendancy – and warnings that governments could suffer “limitless” losses – cryptoassets remain unregulated in the UK, pending a Treasury review.

That means that the FCA, the UK’s financial regulator, is all but powerless to influence how the industry behaves.

While some trading platforms that offer digital assets are regulated – because they also offer more traditional financial instruments – crypto coins and tokens are not.

Cryptoasset executives do not have to prove that they are fit and proper people to take people’s money. The companies they run are not required to hold enough cash to repay investors if they go bust. Nor must they worry about the FCA’s stipulation that financial promotions, such as those splashed across public transport in London, are fair, clear and not misleading.

Amid the marketing blitz, the Advertising Standards Authority is the only watchdog that has bared its teeth. It is investigating one advert by the cryptocurrency Floki Inu and has already banned one for Luno Money.

A cryptocurrency poster advert at a London tube station.
A cryptocurrency poster advert at a London tube station. Photograph: Gavin Rodgers/Alamy

“If you’re seeing bitcoin on a bus, it’s time to buy,” the Luno advert insisted, contrary to prevailing investment wisdom.

Luno Money told the Guardian it would welcome an “effective regulatory framework”.

But in the ongoing vacuum of oversight, experts fear that cautionary tales of addiction, such as the one told by Steven, are being drowned out by powerful, overwhelmingly positive messages.

To monitor the type of messaging sent out by marketing teams, the Guardian created an experimental cryptocurrency portfolio – holding a mixture of bitcoin, ether and Shiba Inu.

As bitcoin slumped towards the end of 2021 and into 2022, having reached all-time highs just weeks earlier, the Twitter account of smartphone trading app eToro remained doggedly optimistic.

“Is bitcoin on its way to a new high?,” it asked, as the slide began. “We’ve seen bitcoin rally before. But could this be the one to take it to the MOON?”

The answer, for the time being at least, was “No”. But holders of crypto portfolios were encouraged to stay positive.

“Your account gained 1.87% yesterday,” one app notification read, as the slump abated. “You had a good day. Share the news with everyone.”

No such invitation appeared on the far more frequent days when the value of the Guardian’s portfolio went down.

“It’s a very strategic marketing ploy,” says Dr Anna Lembke, one of the world’s foremost addiction experts, professor of psychiatry at Stanford University School of Medicine and author of the book Dopamine Nation.

“They’re encouraging you to amplify the wins and ignore the losses, creating a false impression there are more wins.”

Asked about this, eToro says that it is “committed to helping retail investors engage with each other and foster an environment of learning and collaboration”, adding that its platform is not “gamified”.

According to eToro’s UK managing director, Dan Moczulski, some users make their account public so that “all investments are visible to others, whether they are profitable or not”.

The company said it also provides educational tools, performs know-your-customer checks and encourages long-term, diversified investing.

But Dr Lembke is concerned by the potential for the social media element to fuel compulsive behaviour in crypto trading, an activity she says bears the hallmarks of addictive gambling products but without the acknowledged risk.

“When you mix social media with financial platforms, you make a new drug that’s even more potent,” she says.

Social media posts pushing crypto frequently refer to Fomo – the fear of missing out – fuelling an urge to participate.

“You get this herd mentality where people talk to each other about what the market is doing, they have wins together, losses together, … an intense shared emotional experience.”

“We get a little spike in dopamine, followed by a little deficit that has us looking to recreate that state.”

This, she says, echoes characteristics of gambling but with a crucial difference.

“It’s less stigmatised,” she says. “It has this socially sanctioned status as something that maverick smart people do.”

Parallels with gambling are becoming harder to ignore.

GamCare, which runs the National Gambling Helpline, said it fields about 20 calls a week related to crypto. Callers reported trading for 16 hours a day, making huge losses and struggling to cope with the guilt.

As with gambling, where every one addict is estimated to harm seven other people, many were suffering at the hands of someone else’s habit.

One recounted how her partner’s trading obsession was leading them to spend time away from the family. Another said their partner had taken to trading while in recovery from alcoholism, spending every waking hour making trades.

GamCare has even dealt with young patients who bought digital coins in a desperate attempt to make enough money to get on to the property ladder, only to lose life-changing sums.

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At Castle Craig, where Steven is receiving treatment, the first crypto addict arrived at the clinic in 2016, followed by more than 100 since then.

“More and more people are isolated and are doing this [trading], especially since Covid,” says Tony Marini, the senior specialist therapist at the clinic and a recovering gambling addict himself.

“It’s tenfold already since 2016, so what’s it going to be like in the next five years?”

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Best podcasts of the week: what does the bloodsucking saga Twilight tell us about society? | Podcasts

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Picks of the week

The Big Hit Show
“Twilight is stupid; if you like it, you’re also stupid.” Why is there so much vitriol towards female Twihards? (Spoiler: misogyny.) In the first run of a series unpicking pop culture’s biggest moments – from the Obamas’ media company – Alex Pappademas starts by dissecting the wildly popular tale of teenage vampire love – and what the reactions to it say about us. Even if you’re not a fan, he raises some great questions. Hollie Richardson

Fake Psychic
Journalist Vicky Baker captivated listeners with Fake Heiress and now she investigates the fascinating story of Lamar Keene, the go-to spiritualist of 1960s America. When he hung up his questionable crystal ball he decided to reveal the tricks of supposed psychics, and Baker asks if that too was a con while pondering the authenticity of the psychics who followed. Hannah Verdier

Deep Cover: Mob Land
Animal lover, lawyer and switcher of identities Bob Cooley is the subject of Jake Halpern’s new season of the reliably mysterious podcast. Cooley was a top Chicago mob lawyer in the 70s and 80s, but what was the price when he offered to switch to the FBI’s side? This dive into corruption quizzes the key figures around him. HV

Chutzpod
This lively, engaging podcast attempts to “apply a Jewish lens to life’s toughest questions”. Hosts Rabbi Shira Stutman and one-time West Wing actor Joshua Malina cover topics ranging from reality TV shows to the Jewish “New Year of the Trees”, via the recent hostage stand-off at a synagogue in the Dallas suburb of Colleyville. Alexi Duggins

Backstage Pass with Eric Vetro
Eric Vestro is a vocal coach who’s worked with the likes of John Legend, Shawn Mendes, Camila Cabello and Ariana Grande. Here, he entertainingly lifts the curtain on their craft, talking to them about their journey in a manner that feels genuinely intimate given their pre-existing relationships. Expect some enjoyably daft voice exercises too. AD

Royally Flush investigates the monarchy’s relationship with the British slave trade.
Royally Flush investigates the monarchy’s relationship with the British slave trade. Photograph: Chris Radburn/Reuters

Chosen by Danielle Stephens

It’s fair to say that in the last couple of years the British monarchy has been put under a microscope for the way they handle their own family members, whether that be an heir to the throne and his American wife, or a prince embroiled in a civil sex abuse case. In a two parter titled Royally Flush, however, the Broccoli Productions’ Human Resources podcast goes back in time to investigate the royal family’s role in the slave trade in Britain, questioning how influential they were in trying to prevent abolition.

This is clearly a pandemic production as audio quality can sometimes be shaky, but the content is an important listen. As the country gears up to celebrate the Queen’s platinum jubilee, writer and host, Moya Lothian-McLean takes us on an unexplored trip down memory lane, presenting fascinating insights into why – despite ample evidence that the monarchy was historically instrumental in propping up the slave trade in Britain – we haven’t heard so much as a sorry coming from Buckingham Palace, according to the program maker.

Talking points

  • Never underestimate the skill that goes into making a good podcast. Over a year since Meghan and Harry’s audio production company Archewell signed a podcast deal with Spotify, they’ve only managed to release a single podcast. Hence, presumably the job ads Spotify posted this week, looking for full-time staff to help Archewell.

  • Why not try: Smartless | Screenshot

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California’s net neutrality law dodges Big Telecom bullet • The Register

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The US Ninth Circuit Court of Appeals on Friday upheld a lower court’s refusal to block California’s net neutrality law (SB 822), affirming that state laws can regulate internet connectivity where federal law has gone silent.

The decision is a blow to the large internet service providers that challenged California’s regulations, which prohibit network practices that discriminate against lawful applications and online activities. SB 822, for example, forbids “zero-rating” programs that exempt favored services from customer data allotments, paid prioritization, and blocking or degrading service.

In 2017, under the leadership of then-chairman Ajit Pai, the US Federal Communications Commission tossed out America’s net neutrality rules, to the delight of the internet service providers that had to comply. Then in 2018, the FCC issued an order that redefined broadband internet services, treating them as “information services” under Title I of the Communications Act instead of more regulated “telecommunications services” under Title II of the Communications Act.

California lawmaker Scott Wiener (D) crafted SB 822 to implement the nixed 2015 Open Internet Order on a state level, in an effort to fill the vacuum left by the FCC’s abdication. SB 822, the “California Internet Consumer Protection and Net Neutrality Act of 2018,” was signed into law in September 2018 and promptly challenged.

In October 2018, a group of cable and telecom trade associations sued California to prevent SB 822 from being enforced. In February, 2021, Judge John Mendez of the United States District Court for Eastern California declined to grant the plaintiffs’ request for an injunction to block the law. 

So the trade groups took their case to the Ninth Circuit Court of Appeals, which has now rejected their arguments. While federal laws can preempt state laws, the FCC’s decision to reclassify broadband services has moved those services outside its authority and opened a gap that state regulators are now free to fill.

“We conclude the district court correctly denied the preliminary injunction,” the appellate ruling [PDF] says. “This is because only the invocation of federal regulatory authority can preempt state regulatory authority.

The FCC no longer has the authority to regulate in the same manner that it had when these services were classified as telecommunications services

“As the D.C. Circuit held in Mozilla, by classifying broadband internet services as information services, the FCC no longer has the authority to regulate in the same manner that it had when these services were classified as telecommunications services. The agency, therefore, cannot preempt state action, like SB 822, that protects net neutrality.”

The Electronic Frontier Foundation, which supported California in an amicus brief, celebrated the decision in a statement emailed to The Register.

“EFF is pleased that the Ninth Circuit has refused to bar enforcement of California’s pioneering net neutrality rules, recognizing a very simple principle: the federal government can’t simultaneously refuse to protect net neutrality and prevent anyone else from filling the gap,” a spokesperson said.

“Californians can breathe a sigh of relief that their state will be able to do its part to ensure fair access to the internet for all, at a time when we most need it.”

There’s still the possibility that the plaintiffs – ACA Connects, CTIA, NCTA and USTelecom – could appeal to the US Supreme Court.

In an emailed statement, the organizations told us, “We’re disappointed and will review our options. Once again, a piecemeal approach to this issue is untenable and Congress should codify national rules for an open Internet once and for all.” ®

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RCSI scientists find potential treatment for secondary breast cancer

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An existing drug called PARP inhibitor can be used to exploit a vulnerability in the way breast cancer cells repair their DNA, preventing spread to the brain.

For a long time, there have been limited treatment options for patients with breast cancer that has spread to the brain, sometimes leaving them with just months to live. But scientists at the Royal College of Surgeons Ireland (RCSI) have found a potential treatment using existing drugs.

By tracking the development of tumours from diagnosis to their spread to the brain, a team of researchers at RCSI University of Medicine and Health Sciences and the Beaumont RCSI Cancer Centre found a previously unknown vulnerability in the way the tumours repair their DNA.

An existing kind of drug known as a PARP inhibitor, often used to treat heritable cancers, can prevent cancer cells from repairing their DNA because of this vulnerability, culminating in the cells dying and the patient being rid of the cancer.

Prof Leonie Young, principal investigator of the RCSI study, said that breast cancer research focused on expanding treatment options for patients whose disease has spread to the brain is urgently needed to save the lives of those living with the disease.

“Our study represents an important development in getting one step closer to a potential treatment for patients with this devastating complication of breast cancer,” she said of the study, which was published in the journal Nature Communications.

Deaths caused by breast cancer are often a result of treatment relapses which lead to tumours spreading to other parts of the body, a condition known as secondary or metastatic breast cancer. This kind of cancer is particularly aggressive and lethal when it spreads to the brain.

The study was funded by Breast Cancer Ireland with support from Breast Cancer Now and Science Foundation Ireland.

It was carried out as an international collaboration with the Mayo Clinic and the University of Pittsburgh in the US. Apart from Prof Young, the other RCSI researchers were Dr Nicola Cosgrove, Dr Damir Varešlija and Prof Arnold Hill.

“By uncovering these new vulnerabilities in DNA pathways in brain metastasis, our research opens up the possibility of novel treatment strategies for patients who previously had limited targeted therapy options”, said Dr Varešlija.

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