Fintech CEO: Crypto Derivatives a Potential Solution for Crypto Investment Scams

A new FTC report shows that, since the beginning of 2021, more than a billion dollars in cryptocurrency was taken through scams. The plurality of these scams originated through social media, with about $575 million related to bogus investment opportunities. Investment scammers promise huge, immediate returns, then abscond with the cryptocurrencies obtained from victims.

“The best defense against scammers is still due diligence. Any time you consider any investment, there’s a great deal of due diligence that is required. Consult your advisors — legal, financial, and otherwise. As regulators continue to create a commonsense guidebook, and as the public gets more education on crypto, there will be a better understanding, and that should begin to limit the success of some of these fraudulent scams. Still, there are other things to consider,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“Consider the derivatives market. After the current downturn in digital assets, I think we’re going to see many begin to move towards derivatives. One of the positive things about derivatives is that it limits the risk of holding any one particular asset. When you see some digital assets swinging in a particularly volatile manner, far outside the mainstream of the industry, that’s going to have some investors looking to mitigate some of the risk associated with investing in individual assets,” opined Gardner.

“Once national regulators in key countries begin to develop a more concrete set of regulations for digital assets, including derivative markets, I think that will be a boon for alternative segments. Derivative trading makes a great deal of sense for many investors which have immersed themselves in digital assets,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“When you offer derivatives as a mainstream option, a broader cross segment of the population will participate. With a little bit of education about the industry, people will be able to better identify scams that are too good to be true, while taking advantage of a derivatives market which satisfies their desire to participate as an investor in a safe, regulated manner,” said Gardner.