Liti Capital Launches ScamBusters to Tackle Cryptocurrency Fraud

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Swiss litigation fintech, Liti Capital SA, is launching ScamBusters to fight cryptocurrency fraud cases. The new tool will allow users to decide by voting which crypto fraud cases the company should take up. So far, Liti Capital has secured a healthy bouquet of cases. The largest of the cases is well worth over $1 billion when it settles.

Cryptocurrency Fraud Cases in 2021

Cryptocurrency scams have increased to an unprecedented rate in 2021. Perhaps owing to the influx of new retail and individual investors into the market. The crypto market valuation rose to about $2 trillion. Despite increasing measures to secure wallets and assets, the cases of cryptocurrency breaches and fraud are on track to break records set in previous years.

By the end of August, 32 incidents of crypto hacks had been recorded with about $3 billion lost to the scams. This corresponds to about a 41% increase in the fraud rate compared to other years. Beyond this, about $215 million was lost in Q1 of 2021 with about 14,079 investment scams reported to the FTC in the same period.

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Liti Capital is hoping to use its expertise to pick, fund, and win such scam cases in court. By using the new feature, ScamBuster, it will invite its token holders to vote on which crypto scams it should pursue in court

Speaking on the development, Chief Operating Officer at Liti Capital, Andy Christen said, “The idea that scammers can freely operate in the crypto sphere without facing the consequences of their actions must end to bring trust and change the perception blockchain and crypto projects have in our society.”

The private equity firm plans to allocate between 5% and 10% of its annual investment budget to sponsor cases that have affected members of its community. Once launched, any LITI or wLITI token holder will be able to report suspected fraud cases to the company.

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How ScamBusters works

Basically, ScamBusters is a community voting feature. Users within the community who possess LITI and wLITI tokens will be able to choose what crypto fraud cases Liti Capital should pursue. These users will not be required to spend the tokens. The voting power of each user will be dependent on the number of tokens they have.

Once the votes for different crypto fraud cases have been tallied on the ScamBusters website, they will be taken up by Liti Capital’s team of legal experts. These legal luminaries are spread across 140 countries globally. Should Liti Capital win any such case, users who voted for that case will be eligible to share an award of up to 250,000 wLITI based on their initial voting power.

The first community voting begins on September 23, 2021. The winning case for the round will be announced on October 15, 2021. Chief Executive Officer of Liti Capital, Jonas Rey stressed the need for a robust legal system for crypto. He said, “If cryptocurrency is going to become the de facto way people take part in the Web3 world, trust, regulation and a robust legal system are all parts of that puzzle.”

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