cryptocurrency
Creating my own crypto
<p>Imagine this</p>
<ol>
<li><p>I create my own defi cryptocurrency</p>
</li>
<li><p>I take out loans denominated in the currency, ie, legal contracts to give people money in the future</p>
</li>
<li><p>Then, I print more money for myself to inflate away the value of these liabilities.</p>
</li>
</ol>
<p>Is this fraud? If I create a currency solely to take out loans which I later devalue isnt that fraud?</p>
<p>And this is what people actually do so its  not hypothetical. What about breach of fiduciary trust?</p>

<blockquote>
<p>If I create a currency solely to take out loans which I later devalue isnt that fraud?</p>
</blockquote>
<p>That scenario presents most of the <em>prima facie</em> elements of <em>fraud</em>. However, the lender or investor also would need to prove that his <em>reliance</em> on the borrower's misrepresentations was <em>reasonable</em>.</p>
<p>Your description says nothing about the terms of those &quot;legal contracts&quot;, or what [mis-]representations the creator of that cryptocurrency makes to lenders. Absent that information, no reasonable person would grant a loan without assessing the risk of borrower's default. A lender who <em>bears the risk</em> despite his very <em>limited knowledge</em> of the matter (see <a href="http://www.oneclubofjusticides.com/p/restatement-second-contracts.html" rel="nofollow noreferrer">Restatement (Second) of Contracts</a> at § 154(b)) is unlikely to prove the element of <em>reasonable reliance</em>.</p>
<p>The <a href="https://law.stackexchange.com/questions/59037/creating-my-own-crypto#comment121430_59037">notion</a> that &quot;<em>the entire finance system is fraud [...] because the fed prints money</em>&quot; is a very different matter. Although monetary policy <em>de facto</em> typically centers on causing the depreciation of [domestic] fiat currency, the loss of purchase power is too slow to prompt holders of US dollars to switch to a different currency. The prevalence of the US dollar is evidence of that. By contrast, the scenario you outline has no information for a reader to rule out the mental picture that lenders will suddenly notice their money is gone.</p>
<p>Furthermore, the dynamics of entire economies are highly dependent on the trends of the US dollar, something that cannot be said of a new, unknown cryptocurrency.</p>
