Ric Edelman: Have You Fallen for These Crypto Myths?

Ric Edelman: Have You Fallen for These Crypto Myths?

Believing any of these 13 follies could cost you money.

Ric
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Reviewed by: Ron Day
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Edited by: etf.com Staff

Ric Edelman: It's Friday, September 15th. Coming up on today's show, generating income from, of all places, crypto. And are you stacking SATs? I'll explain that term today. But first, crypto is getting a lot of attention these days because of the major lawsuit the SEC just lost against grayscale. And that means crypto ETFs are expected to be soon available. The most popular investment vehicle that offers the lowest cost and greatest convenience, giving you access like never before to this new asset class of crypto. But there are still a lot of crypto myths out there and I want to take this opportunity to dispel them. 13 myths, in fact.

Number one, the myth that crypto is only used by criminals. According to Chainanalysis, illicit activity is involved in less than 1% of all crypto transactions. Cash, by contrast, according to the World Bank, is used in up to 5% of all transactions. In other words, cash is used five times more illegally than crypto.

Another myth is that crypto is unregulated. That's nonsense. Global standards were issued way back in 2019 by the Intergovernmental group, the Financial Action Task Force. These rules require crypto businesses in both the US and overseas to follow anti-money laundering requirements and maintain transaction information under what's known as the travel rule. Singapore regulates digital payment service providers. So does South Korea and Australia. The United Arab Emirates has a virtual asset regulatory authority, and this past April, the European Union passed MiCA, the Markets in Crypto Assets Regulation Law, the first comprehensive legislation in Europe for regulating digital assets. Here in the US, crypto businesses that act as money services businesses are required to comply with anti-money laundering and counter-terrorist financing requirements under the Bank Secrecy Act. More than a year ago, President Biden signed an Executive Order on ensuring responsible development of digital assets to ensure financial stability, prevent illicit activity, and to protect national security. To say that crypto is unregulated is just plain wrong.

Or how about this myth that all crypto is Bitcoin? Well, Bitcoin is the oldest and still biggest. It's about 50% of the total market share of the entire crypto world. But there are now 24,000 different digital coins and tokens. The total market cap for crypto is over $1 trillion. It is not all about bitcoin.

Another myth is that crypto is anonymous and therefore untraceable. Wrong. Far from being anonymous, blockchain technology is the most transparent, democratized financial system the world has ever seen. All the transactions are recorded in a public ledger anybody can see.

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Ric Edelman, founder, Digital Assets Council of Financial Professionals, is one of the most influential people in the financial planning and investment management profession, according to Investment Advisor, RIABiz and InvestmentNews. He was ranked three times as the nation’s No. 1 Independent financial advisor by Barron’s, is in two industry Halls of Fame and received the IARFC’s Lifetime Achievement Award. Edelman also holds two patents for financial product innovation. He is the industry’s top financial educator. Edelman is a #1 New York Times bestselling author of 12 books on personal finance, including his newest, The Truth About Crypto, an Amazon bestseller. He hosts The Truth About Your Future podcast and produces Public Television specials. Edelman taught personal finance at Georgetown University for nine years and is Distinguished Lecturer at Rowan University. He and his wife Jean live in Northern Virginia.