Ethereum Scam Allegations Grow: Crypto Pundit Describes The Rise And Fall Of ETH

Bitcoin maximalist and prominent figure in the community, Bit Paine, has weighed on the concept of digital assets and most especially suggested that the second-largest cryptocurrency by market cap, Ethereum, is a scam. 

How Ethereum Is A Scam

In a post shared on his X (formerly Twitter) platform, Bit Paine gave his view on Ethereum and other altcoins in what he termed “a brief history of the rise and fall of ethereum.” He seemed to be alluding to the Ethereum network when he spoke about a “world computer,” which he labeled a scam.

According to him, this world computer only succeeded, despite being a scam, because of “one very potent use case,” which is that it provided a platform for anyone to easily create and sell “digital penny stock” (which he also referred to as unregistered securities).

He went on to mention how this use case was enticing to Venture Capitalists (VCs) as it provided them an opportunity to make gains without any regulatory eyes being on them, especially as it relates to violation of securities laws, which normally would have mandated these VCs to disclose their crypto accounts and ensure there wasn’t any fraudulent act going on.

Crypto exchanges like Coinbase aren’t also left out in benefitting from the “scam,” as the Bitcoin maximalist mentioned that these “crypto casinos” have everything to gain through the volume fees they earn on these tokens. To maximize their gains, they are accused of listing as many coins as they can in order to increase the trading volume on their platform and earn more fees in the process. 

Meanwhile, Bit Paine accused crypto traders, bots, and influencers of getting in on the act as they “spin up a mini-industry of hyping, pumping and dumping these penny stocks scams onto retail.”

The allegations against Ethereum come not long after former ETH legal counsel Steven Nerayoff accused founders Vitalik Buterin and Joseph Lubin of carrying out a scam bigger than what Sam Bankman-Fried did with the FTX crypto exchange.

The Only Legit Cryptocurrency

Bit Paine didn’t let the chance to slip in Bitcoin slide as he praised the token and seemed to suggest that the foremost cryptocurrency was the only one that embodied the ethos of decentralization. He stated that Bitcoin has only one ethical use case, which is that it is “fair, neutral, global, uncensorable digital money.”

He also said that Bitcoin aligns incentives for humanity. On the other hand, Ethereum “hyper-charged the broken incentives of fiat-finance” while being able to evade all the laws “that have made it less overtly a scam.”

His theory seems to stem from his belief that Bitcoin is the only cryptocurrency that was created with the purpose of serving humanity, unlike other tokens like Ether (and the ones created on the Ethereum network), which are simply for financial gains. That could explain why he stated that digital properties are not created “ethically equal.”