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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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Elon Musk sells Tesla shares worth $6.9bn as Twitter trial looms | Elon Musk

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Elon Musk has sold $6.9bn (£5.7bn) worth of shares in Tesla after admitting that he could need the funds if he loses a legal battle with Twitter and is forced to buy the social media platform.

The Tesla CEO walked away from a $44bn deal to buy Twitter in July but the company has launched a lawsuit demanding that he complete the deal. A trial will take place in Delaware in October.

“In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” Musk said in a tweet late on Tuesday.

In other comments on Twitter on Tuesday, Musk said “yes” when asked if he was finished selling Tesla stock. He also said he would buy Tesla stock again if the Twitter deal does not close.

Musk has committed more than $30bn of his own money to the financing of the deal, with more than $7bn of that total provided by a coterie of associates including tech tycoon Larry Ellison, the Qatar state investment fund and the world’s biggest cryptocurrency exchange, Binance.

Musk, the world’s richest person, sold $8.5bn worth of Tesla shares in April and had said at the time there were no further sales planned. But since then, legal experts had suggested that if Musk is forced to complete the acquisition or settle the dispute with a stiff penalty, he was likely to sell more Tesla shares.

Last week Musk launched a countersuit against Twitter, accusing the platform of deliberately miscounting the number of spam accounts on the platform. Twitter has consistently stated that the number of spam accounts on its service is less than 5% of its user base, which currently stands at just under 238 million. Legal experts have said that Musk will find it hard to convince a judge that Twitter’s spam issue represents a “company material adverse effect” that substantially alters the company’s value – and therefore voids the deal.

Musk sold about 7.92m Tesla shares between 5 August and 9 August, according to multiple filings. He now owns 155m Tesla shares or just under 15% of the electric carmaker.

The latest sales bring total Tesla stock sales by Musk to about $32bn in less than one year. However, Musk remains comfortably ahead of Jeff Bezos as the world’s richest man with an estimated $250bn fortune, according to the Bloomberg billionaires index.

Tesla shares have risen nearly 15% since the automaker reported better-than-expected earnings on 20 July, also helped by the Biden administration’s climate bill that, if passed, would lift the cap on tax credits for electric vehicles.

Musk also teased on Tuesday that he could start his own social media platform. When asked by a Twitter user if he had thought about creating his own platform if the deal didn’t close, he replied: “X.com”.

With Reuters



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Iran reveals use of cryptocurrency to pay for imports • The Register

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Iran has announced it used cryptocurrency to pay for imports, raising the prospect that the nation is using digital assets to evade sanctions.

Trade minister Alireza Peyman Pak revealed the transaction with the tweet below, which translates as “This week, the first official import order was successfully placed with cryptocurrency worth ten million dollars. By the end of September, the use of cryptocurrencies and smart contracts will be widespread in foreign trade with target countries.”

It is unclear what Peman Pak referred to with his mention of widespread use of crypto for foreign trade, and the identity of the foreign countries he mentioned is also obscure.

But the intent of the announcement appears clear: Iran will use cryptocurrency to settle cross-border trades.

That’s very significant because Iran is subject to extensive sanctions aimed at preventing its ability to acquire nuclear weapons and reduce its ability to sponsor terrorism. Sanctions prevent the sale of many commodities and technologies to Iran, and financial institutions aren’t allowed to deal with their Iranian counterparts, who are mostly shunned around the world.

As explained in this advisory [PDF] issued by the US Treasury, Iran has developed numerous practices to evade sanctions, including payment offsetting schemes that let it sell oil in contravention of sanctions. Proceeds of such sales are alleged to have been funnelled to terrorist groups.

While cryptocurrency’s anonymity has been largely disproved, trades in digital assets aren’t regulated so sanctions enforcement will be more complex if Iran and its trading partners use crypto instead of fiat currencies.

Which perhaps adds more weight to the argument that cryptocurrency has few proven uses beyond speculative trading, making the ransomware industry possible, and helping authoritarian states like Iran and North Korea to acquire materiel for weapons.

Peyman Pak’s mention of “widespread” cross-border crypto deals, facilitated by automated smart contracts, therefore represents a challenge to those who monitor and enforce sanctions – and something new to worry about for the rest of us. ®



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Edwards Lifesciences is hiring at its ‘key’ Shannon and Limerick facilities

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The medtech company is hiring for a variety of roles at both its Limerick and Shannon sites, the latter of which is being transformed into a specialised manufacturing facility.

Medical devices giant Edwards Lifesciences began renovations to convert its existing Shannon facility into a specialised manufacturing centre at the end of July.

The expansion will allow the company to produce components that are an integral part of its transcatheter heart valves. The conversion is part of Edwards Lifesciences’ expansion plan that will see it hire for hundreds of new roles in the coming years.

“The expanded capability at our Shannon facility demonstrates that our operations in Ireland are a key enabler for Edwards to continue helping patients across the globe,” said Andrew Walls, general manager for the company’s manufacturing facilities in Ireland.

According to Walls, hiring is currently underway at the company’s Shannon and Limerick facilities for a variety of functions such as assembly and inspection roles, manufacturing and quality engineering, supply chain, warehouse operations and project management.

Why Ireland?

Headquartered in Irvine, California, Edwards Lifesciences established its operations in Shannon in 2018 and announced 600 new jobs for the mid-west region. This number was then doubled a year later when it revealed increased investment in Limerick.

When the Limerick plant was officially opened in October 2021, the medtech company added another 250 roles onto the previously announced 600, promising 850 new jobs by 2025.

“As the company grows and serves even more patients around the world, Edwards conducted a thorough review of its global valve manufacturing network to ensure we have the right facilities and talent to address our future needs,” Walls told SiliconRepublic.com

“We consider multiple factors when determining where we decide to manufacture – for example, a location that will allow us to produce close to where products are utilised, a location that offers advantages for our supply chain, excellent local talent pool for an engaged workforce, an interest in education and good academic infrastructure, and other characteristics that will be good for business and, ultimately, good for patients.

“Both our Shannon and Limerick sites are key enablers for Edwards Lifesciences to continue helping patients across the globe.”

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