The entire cryptocurrency market continues to swell and represents more than $ 3 trillion.

But while bitcoin, which hit a new all-time high at more than $ 68,000 on Tuesday, is of increasing interest to financial professionals, more or less serious cryptocurrency projects abound.

"Any team of developers can create an application and issue a cryptoasset," warns Martha Reyes, who heads research for the Bequant cryptocurrency exchange, interviewed by AFP.

The boss of the gendarme of the American markets, Gary Gensler, had also qualified this summer of "Wild West" this sector in exponential growth.

The "Squid coin" illustrates the dangers for unwise investors: this cryptocurrency, created on the theme of the hit Netflix series by anonymous people without any connection to the online viewing giant, has been a dizzying success in a few days end of October.

According to some estimates, the market value of this cryptocurrency then exceeds $ 30 million.

But buyers find they can't sell it and cash in on their profits, and in early November, creators disappear from social media as the price crumbles.

Even if trade seems to have resumed, the sums invested have been siphoned off and investors are looking in vain for explanations.

- DeFi challenge -

"It's a very visible type of scam that is nicknamed + rug pull + (pulling the rug)", Eswar Prasad, an economist at the American University of Cornell, explains to AFP, who sees "one of the many ways in which naive retail investors are lured into the promise of high earnings, leaving them vulnerable. "

The dizzying performance of the cryptocurrency market, whose value has increased sevenfold in one year, is indeed attracting unsuspecting buyers.

Even if they are particularly present, like their victims, in Eastern Europe, "these scammers operate on a global scale", recalls Kim Grauer, in charge of research for the firm Chainalysis.

Ozan KOSE AFP / Archives

“The rapid growth of decentralized finance (or DeFi) and the ambition of investors has created the perfect environment for + rug pull +,” she adds.

To buy Squidcoin, investors had to connect to a decentralized platform.

Unlike centralized platforms like Coinbase, which is registered with regulators, DeFi brings together projects that want to do without a third party validating transactions, and anonymity is often possible.

In France, Romain Chily, lawyer at ORWL, specializing in cryptocurrencies, says he sees new cases of cryptocurrency scams happening "every month".

According to him, DeFi contains "lots of products that work quite well, but for savvy investors", and he advises "not to start there" because, in case of problem, "the chances of recovering your funds are extremely slim. ".

He recommends turning to sellers accredited by the Autorité des marchés financiers (AMF) and checking that the platform is not on the financial policeman's blacklist.

- Costly jokes -

Even on regulated platforms, the seriousness of certain projects leaves us skeptical.

Since the start of the year, two dog-themed cryptocurrencies, the dogecoin and the Shiba Inu, have seen their value jump: the first was created as a joke in 2013, and the second in the summer of 2020.

These cryptocurrencies, created from internet phenomena, are nicknamed "memecoins", and are particularly volatile.

But professionals make a difference with scams: "It's a branding exercise. Rather, it reminds me of the surge in GameStop and AMC stocks at the start of the year, which had nothing to do with the intrinsic value of these companies. ", comments Ms. Reyes.

The same goes for Joshua Barraclough, who runs the "pro" version of the BitPanda cryptocurrency exchange platform, based in Austria, who advises taking the time to educate yourself and ask yourself a few questions before investing: "Is- Do you understand what the project is doing? Does it sound fishy? If it sounds, it probably is. "

© 2021 AFP