This unfortunate news came yesterday with many investors being trapped in the name of fixed deposits.
Knowingly or unknowingly, govt and RBI did a proactive thing as crypto volumes fell more than 60% after the announcement to tax it.
One big lesson which is old but is taught to new investors/traders in different ways is to never trust influencers blindly and put ur hard earned money in such shady products.
some interesting tweets on why we should not blindly trust these social media influencers :
I hope nobody from the Tqna community is trapped in this fixed deposit crypto ponzi scheme.
RBI governor has been issuing warnings against crypto since a long time. But nobody takes him seriously. Even former governor Raghuram Rajan, whoâs an economist, warned against crypto. But still nobody cared.
What I hate is how much he was downplaying the risks - he even says âguaranteedâ and âthere is no riskâ. His description says âI am now urging you to investâ. Must have received a fat sum for him to get so intoxicated.
Now I know why his book is titled âDo Epic SHITâ
Reading this it made me realise is that this same fiasco happened with lakshmi villas bank. Only difference it was gold as collateral. So when collateral value goes down in value borrowers never even bother paying their debts and would gladly default . So apparently all those who borrowed having bitcoin or crypto as collateral found it makes no sense to pay principal + interest when most cryptocurrencies have lost more than 50% value .
All I see problem here is people are still stuck with FD syndrome and applying that on cryptocurrencies which I think is far worse
Itâs only gonna get worse if you ask me. Nexo is going to go down as well. Well what happens when collateral pledged is lesser than outstanding amount and borrowers know it makes no sense to pay principal + Interest , only way out is depositers better understand their money is gone or a central bank has to step in and print money which kinda even worse.
Going back to LVB bank in 2020 when it was known to give gold loans , all borrowers took gold loan pledging gold as collateral and as soon they noticed price of gold dropped they realised it makes no sense to pay back the loan for gold which is 10% less than outstanding amount and rather opted to default. LVB was left with gold and I guess Net demand and time liabilities (NDTL) really got them as they couldnât pay the depositers back. RBI stepped and printed the depositors out. This option neco or vauld is not happening and central banks hate cryptocurrencies , they would rather let them go bankrupt than to bail them out. I am pretty sure bank of England nor reserve bank of india are not going to provide any options. Better to transfer coins to any other wallet than to cash in.
Regulators trying to prevent mis selling in insurance since ages. But not much impact.
This too will be same story. Once the market revives, everyone will forget the pain and the fresh Murgas will be lured.
In a country where banks, stock markets are so tightly regulated its just a matter of time before these sort of entities are brought under the legal umbrella or banned all together.
. So apparently all those who borrowed having bitcoin or crypto as collateral found it makes no sense to pay principal + interest when most cryptocurrencies have lost more than 50% value .