the crypto cocktail that ruined the French


Behind the billions that have risen in the crypto crash are a large number of small investors who have lost some of their savings. The JDN interviewed them to understand how they were able to minimize the risks in this way.

“I’m at 6 digits loss there, I don’t know what I’m going to do…”. Since May 8, annoying posts like this have multiplied on social networks and forums. Who do they come from? French people who have invested all or part of their savings in crypto protocols with a return that is as delirious as it is risky. The value of their portfolio melted as the prices of Luna and UST, two cryptocurrencies of the Terra blockchain, collapsed. In total, nearly $40 billion went up in smoke. Anchor Protocol, a platform that promised investors a 20% return, has lost more than 99% of its value. On Twitter or on Jeuxvideos.com, internet users who were previously convinced to have discovered the goose that lays the golden eggs, express their incomprehension. Some of the testimonials are probably exaggerated, even false, but many are very real, as the JDN was able to verify by contacting their authors.

Testimony published on Jeuxvideos.com. © JDN / Jeuxvideos.com
Testimony published on Twitter. © JDN / Twitter
Testimony published on Twitter. © JDN / Twitter

The shock is all the more violent because the Terra blockchain had previously sparked a lot of enthusiasm: the Luna had reached the top 10 crypto currencies in terms of capitalization. As a result, Grégoire, an executive of a famous French startup, thought the ecosystem was “too big to fail”. He acknowledges that the 20% return offered by Anchor Protocol was not viable, but the buzz on Twitter prompted him to buy his USTs and put them on the platform. He estimates his losses at $3,000. He is not the only one who has been carried away by this general enthusiasm. The proof at Jeuxvideos.com:

Testimony published on Jeuxvideos.com. © JDN / Jeuxvideos.com

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Blinded by the euphoria on social networks and comforted by some crypto influencers, investors seeking ever-higher returns have forgotten the basic tenet of the risk/reward pair, which is that the higher the first, the higher the second. Lucas, a student in his twenties, says he fell into the trap: “Stablecoins were presented as safe investments”. He was also subscribed to the same crypto newsletter, which was his surprise when the UST fell against the dollar. Sofiane, a 30-year-old industrial engineer, lost $4,000 after praising French youtubers Anchor.

Indeed, there are many student crypto influencers, who are rewarded through affiliate links and ads, on Google’s video platform. Example with Tutok, followed by 4,500 subscribers, according to which Anchor presents “virtually no risk” because “it’s kind of an A-book with a small performance difference”. Cryptosaure, with just over 2,000 subscribers, said “the 0.5% booklet A stop whining, put $10,000 on it for 20% and you’re at peace”. With 76,500 subscribers, Paul assured Crypto Formation that there was “no reason to revert to central bank fiat if we can have such interest on our stablecoins”.

“The Livret A with 0.5% no longer makes you angry, put 10,000 euros on it for 20% and you are silent”

To compare a savings product with state-guaranteed and regulated capital with a decentralized financing protocol at a dizzying pace, one had to dare. A comment that is nevertheless widespread, as we have just seen, reflecting at the very least a lack of knowledge. At least that’s what Xavier, a senior executive in a French fintech who lost 0.5% of his portfolio with the luna, thinks, according to whom “many crypto influencers don’t understand the technology behind it” and presented Anchor Protocol as a solution for “make magic money.” Contacted by the JDN, Tuktok admits he advised his public “at some point” to put USTs on Anchor, but insists he “issued a warning” when liquidity reserves began to dwindle. The one who congratulates himself on “value added” to those “who don’t have time to find out” is still surprised that some… “follow youtubers like me foolishly”.

The reckless words of influencers don’t stop them from taking some precautions: they all use a disclaimer that often looks like this: “Please note that I am not a financial investment advisor. I cannot be held responsible for any losses or potential profits. Always do your own research and consult a professional before making your own investments”. A disclaimer that, according to Romain Darrière, internet and new technologies law attorney, allows crypto influencers to differentiate themselves from financial advisor status, which implies responsibility before the law.

Be careful though, all French youtubers should not be put in the same basket. Some, in larger communities, were able to be more judgmental. In particular, Crypto Farmeur, with 35,300 subscribers, said he had “seen four points that” [lui] suggest that guaranteeing 20% ​​APY on stablecoin is not feasible in the long run”. Ditto on the part of some of the crypto press. Followed by 112,000 people on YouTube, Le Journal du Coin specifies although “the involvement [dans Anchor] of the largest funds is not a guarantee, is not an ultimate guarantee.” It must be assumed that no…

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