A father of three in New York had invested his family’s entire $375,000 life savings into the Celsius cryptocurrency platform after months of reassurance from its founder, Alex Mashinsky. He urged investors to “ignore the FUD,” crypto slang for “Fear, Uncertainty, and Doubt.”
Celsius then froze all withdrawals. The money was gone, with more than 26,000 New Yorkers losing their investments, and millions more pulling quickly from the market. The FBI reported that dozens of victims had to be referred for suicide intervention.
A fundamental, harmful misconception is that the issue of crypto feels like it belongs to a younger, more online generation. However, the people being hurt most by this industry are not twenty-somethings on their phones, though that demographic was not immune to significant loss, either.
Americans age 60 and older lost the most to crypto fraud in 2024, with an average loss of roughly $83,000 per victim.
That is four times the overall average, as compared to any other age group. Cryptocurrency fraud is not someone else’s problem — it is now everybody’s problem.
What Is Cryptocurrency, Anyway?
Before I explain why I believe cryptocurrency functions like a commercial cult, let me define what it is, because the jargon is a large part of how it works.
A cryptocurrency is a digital currency that exists only on a computer network. It is not backed by any government, bank, or physical asset, unlike online banking, which is backed by real currency, gold, investments, or real estate.
You cannot hold it, prove its value, or deposit it in a traditional bank. Its value is determined entirely by what the next person is willing to pay for it. There may be digital currencies backed by governments, but we are focused here on a purely invented “thing.”
One way to think about buying cryptocurrency is to imagine buying a ticket to a concert, but there is no concert, no venue, and no performer. You may only use the ticket in certain situations, which may change in volatile ways. The only way to get your money back is to convince someone else to buy the ticket from you at an equal or higher price.
An anonymous figure using a pseudonym created the first cryptocurrency in 2009, and early adopters treated it like digital gold. The original intent was to develop a form of payment that might one day serve as an alternative to government currency.
In those early years, there were a few hundred cryptocurrencies. Some people made extraordinary profits by getting in early and holding on. That world no longer exists.
New Currencies Don’t Survive
As of early 2025, millions of unique digital currencies have been created. Like the real world, some of these currencies are “stronger” than others, sell for more real-world currency, or hold a larger market share.
Of those, CoinGecko, a cryptocurrency tracker, actively tracks about 17,000, with only some showing real meaningful activity. The rest are abandoned, never intended to function as real investments in the first place.
Platforms like Pump.fun drive the explosion of new digital currencies, tools that let anyone create a tradable token (currency) in seconds for under $2. At its peak in late 2024, Pump.fun was generating roughly 70,000 new tokens per day.
Despite its “fun” name and flashy user interface, The Solidus Labs analyzed over 7 million tokens deployed on Pump.fun and found that 98% were rug pulls or pump-and-dump schemes.
A “rug pull” is exactly what it sounds like. Creators of the digital currencies build hype, attract buyers, then drain the money. The average currency lifespan is 12 days, with 98% becoming defunct after 3 months. Functionally, it is a casino with a house edge approaching 99%.
Economists Know This is A Scam
I am not alone in my concern, and many highly credentialed economists have reached a similar assessment of cryptocurrencies.
As Paul Krugman, the 2008 Nobel Prize-winning economist, wrote in May 2025, “Ever since crypto’s invention, enthusiasts have promised that blockchain tokens will find widespread legal use cases, displacing conventional means of payment, any day now. But it keeps not happening.”
Joseph Stiglitz, Nobel laureate and former World Bank chief economist, said flatly, “I actually think we should shut down the cryptocurrencies,” noting that they are commonly used for criminal activities such as money laundering or for the proceeds of crime.
And finally, Christine Lagarde, President of the European Central Bank, put it plainly, stating, “It is worth nothing,” and stressed that there is no underlying asset to serve as an anchor for the currency. She further emphasized the need for regulation to protect vulnerable investors who may lack an understanding of what they are actually purchasing.
Many other Nobel Prize winners, scholars, and top award-winning economists have come to similar conclusions. Yet millions of people continue to pour their money into the scam of cryptocurrency. Understanding this phenomenon requires viewing it through the lens of influence.
Crypto Communities Function as Cults
When I examine cryptocurrency communities, particularly the high-pressure environments on platforms like Discord, Telegram, and X, I recognize familiar patterns.
My BITE Model of Authoritarian Control™ examines four domains of influence, and cryptocurrency communities exhibit all four.
Behavior control operates through social pressure to buy large amounts of digital currency, hold onto it, and recruit others to purchase from you at a higher price. Rinse and repeat.
Some major exchanges offer 50% off trading fees for referred users. If your referrals then recruit others, you earn up to 40% on those referrals. These tactics are identical to a multi-level marketing (MLM) compensation structure, which I have written about extensively as a form of commercial cult.
Information control is pervasive as communities on Discord and Telegram are tightly moderated spaces that suppress criticism and reward their visible cheerleaders.
For example, when the SafeMoon cryptocurrency was attracting billions of dollars in investment, its community organized dedicated “FUD Fighter” groups whose explicit purpose was to troll and silence anyone raising concerns. Those concerns proved entirely legitimate when the SEC charged SafeMoon’s creators with massive fraud.
Thought control manifests through “thought-terminating clichés”, phrases that compress legitimate criticism into a single dismissive label.
The crypto world is saturated with them. “FUD” (fear, uncertainty, and doubt), as mentioned, is the mainstay and is deployed to shut down all questioning. When top economists call crypto a scam, it is dismissed as FUD. When regulators warn about fraud, it is FUD.
The word functions similarly to the term “suppressive person” in Scientology or “dream stealer” in other MLMs, by shutting down critical thought.
The term “HODL,” a founding piece of crypto mythology, originated from a drunken, misspelled forum post titled “I AM HODLING” as Bitcoin was crashing. The post devolved into anxious justification for “hodling” the crashing digital currency.
This misspelling was retroactively given the backronym “Hold On for Dear Life” and would become an entire philosophy that equates selling with weakness.
“Diamond hands” describes someone who refuses to sell through any crash, while “paper hands” is a term of contempt for anyone who exits. These founding myths, loaded language, and thought-terminating clichés bind the community.
Emotion control is also expressed within the broad spectrum of community acronyms, as “WAGMI” (We’re All Gonna Make It) functions as a collective affirmation.
“NGMI” (Not Gonna Make It) brands anyone who doubts as an outsider who deserves their losses. “Have fun staying poor” is hurled at critics, while “no coiner” is a pejorative for those who refuse to participate.
Robert Jay Lifton’s eight criteria for thought reform also map onto these communities.
Milieu control is achieved through closed forums, which often require proof of purchase to enter. Critics are blocked and removed from the forums.
Mystical manipulation can be observed through online influencers who fake major profits in order to sell their currency to others, by renting luxurious apartments for photoshoots or posing with expensive cars they do not own.
Demand for purity asks for your diamond hands, and scorns those with paper hands.
Public confessions are common, with participants often sharing major losses and sacrifices in the name of HODL.
The language is certainly loaded, chock-full of a confusing new vocabulary. You’ll be expected to know the meaning of HODL, FUD, WAGMI, NGMI, and more to participate fully.
Doctrine over person assures you that you only lose if you sell. Pay no mind the fact that your bank accounts are slowly being drained.
Sacred science tells you that Bitcoin represents the future of currency, one that is modern, innovative, and risk-free.
Finally, Lifton’s criteria called “dispensing of existence”, call non-participants “no-coiners” dismissing them as irrelevant, oblivious, and foolish.
The Scams Targeting You and Your Family
The cult psychology behind cryptocurrency has changed, now creating real victims at an industrial scale, with the FBI reporting $9.3 billion in losses from cryptocurrency fraud in 2024, an alarming 66% increase from 2023.
The dominant scam is something called “pig butchering”, named after the Chinese phrase for fattening a pig before slaughter.
This is how the scam works. A scammer contacts you through a dating app, social media, or increasingly, a “wrong number” text. Over weeks or months, they build a fake relationship.
Then, they steer you to a professional but entirely fake investment platform. Eventually, you try to withdraw and discover the platform is a shell and your money is gone.
A University of Texas study found that pig butchering networks moved more than $75 billion through crypto exchanges from 2020 to 2024.
Reports from the UN have found that many of these scams are operated by victims held in forced-labor compounds across Southeast Asia and Africa, many of them trafficking victims.
How Trump Went From “It’s a Scam” to Launching One
In 2019, Trump tweeted, “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
In 2021, he told Fox Business that bitcoin was a “scam” and that it posed a threat to the U.S. dollar. So what changed?
Apparently, Big Crypto was a major funder of Trump’s last Presidential run–outspending even fossil fuel money. Trump’s bought influence in the cryptocurrency industry means the industry now has the protection it needs to continue operating without meaningful regulation.
The pivot was orchestrated by a specific group of people. David Bailey, CEO of Bitcoin Magazine, led a delegation of Bitcoin executives to Mar-a-Lago in May 2024 to pitch Trump on becoming the pro-crypto candidate.
Figures like Cameron and Tyler Winklevoss, amongst many others, donated to Trump’s campaign, specifically because of Trump’s new stance on cryptocurrencies.
Ryan Salame, notably, donated over $24 million to Republican candidates and is now serving 7.5 years in prison for conspiracy while actively seeking a presidential pardon. This money came from FTX, a digital currency exchange.
The Fairshake PAC, crypto’s flagship political action committee, would go on to raise $260 million. The PAC backed winning candidates in 33 of 35 primaries it entered, and nearly half of all corporate dollars in the 2024 election came from the crypto industry.
Then, right before his second presidential inauguration, Trump launched his own cryptocurrency, called the $TRUMP coin, which sends 75% of profits to the Trump family.
Trump later announced that the top 220 $TRUMP coin holders would be invited to a gala dinner. Representative Jamie Raskin’s investigation found that 73% of the top buyers were likely foreign nationals, raising questions about the scope of political bribery by foreign states. As of the date of writing, $TRUMP trades at approximately $3.40, down roughly 95% from its peak.
Trump University was a scam, Trump Steaks were a scam, and the $TRUMP coin is a scam. It is a scam that used the position and legitimacy of the presidency to transfer wealth from ordinary people to a handful of insiders and foreign actors, consistent with what I documented in The Cult of Trump.
Protecting the Ones You Love
If someone in your life has been drawn into the crypto world, the same principles I teach for helping loved ones leave controlling groups apply here as well.
Don’t mock them, and certainly don’t make them feel foolish. The cult-like dynamics of these communities are designed to make people feel that any outside criticism confirms that outsiders “don’t get it.”
It is particularly important to keep in mind the thought-terminating clichés and loaded language associated with this group. They have been taught to HODL and that any FUD means they have “paper hands.”
To a true-blue crypto loyalist, we are “no coiners”. “Have fun staying poor,” they might say!
A family member who was caught up in crypto fever responded to my effort to explain help them by calling me a “dream stealer.”
So, as you can see, any direct criticism has already been pre-mitigated with phrases that directly bypass critical thought. Instead, we need to ask curious questions, with the real intention of actually hearing the answers.
“Can you explain to me how the value of this token is determined?”
“What happens if no new buyers come in?”
“If something happened to the cryptocurrency network, how could I prove I owned anything without something like the US Treasury or gold backing the value?”
The techniques of cult mind control are not limited to fringe religious groups. They operate in political movements, in multi-level marketing schemes, and now in the world of digital finance.
Cryptocurrency, as it exists today, is a commercial cult that uses deception and social coercion to transfer wealth from the many to the few. The mathematics guarantee it, the experts confirm it, and the victims pay the price.
Further Reading
How the Trump University scam used the same playbook as MLMs and destructive cults, and how one prosecutor fought back.
LuLaRoe and the World of Commercial Cults: Interview with Roberta Blevins
A deep dive into how MLMs use the BITE Model to recruit, retain, and exploit members with direct parallels to crypto promotion.
Are You In A Cult, or Just Talking Like You Are In One?
The power of cults’ loaded language and control.
How MLMs exploit women’s search for community and financial freedom.
Talking MLMs with Douglas Brooks
Douglas Brooks is a specialist in franchise law, who defends victims against the financial depredation of multi-level marketing companies, known as MLMs.
Multi-Level Marketing and Self-Help Cult Groups: Learn the Warning Signs
MLMs are pyramid schemes that focus on recruiting people to recruit others, presumably giving a cut of the income up the chain. Statistics show that over 99% of people involved lose money.