Mark Cuban says he took a hit on Titan cryptocurrency, which spectacularly lost all its value in a day, as Bitcoin also fell below a critical level overnight.
Billionaire investor Mark Cuban has said it was “my mistake” for not doing his homework on the Titan cryptocurrency, which dropped from $60 to $0 in a day.
The Dallas Mavericks basketball team owner and Shark Tank host said on Twitter that he took a “hit” on Titan and says he took full responsibility for the loss.
The cryptocurrency token lost nearly all of its value last Wednesday. Cuban has not disclosed the amount he lost in the crash but told Bloomberg that his investment “wasn’t so big that I felt the need to have to dot every I and cross every T.”
He has called for more regulation to “define what a stable coin is.” Cuban says he wasn’t sure if the crash was due to a “rug pull”, which is basically a cryptocurrency exit scam. Iron Finance, the team behind Titan, has denied this, saying “there are no hacks, no exploits, or rug-pullings.”
In a statement, Iron Finance said the Titan crash was due to “the world’s first large-scale crypto bank run,” in which large investors in Titan began to sell, prompting a further sell-off.
“When people panic and run over to the bank to withdraw their money in a short period, the bank may and will collapse,” it said. “We have learned a great deal from this incident, and while nothing could be fixed in the current system, we will continue our journey with more products in the future.”
Experts have warned of the dangers of investing in cryptocurrencies like Titan and Bitcoin. Overnight, Bitcoin dropped under $US30,000 ($A39,900) for the first time in five months. China’s central bank said it had summoned officials from the biggest lenders to reiterate a ban on cryptocurrency services.
China has imposed new restrictions on energy-intensive mining and reiterated rules for financial firms about providing crypto services.
Bitcoin appeared to be gaining new fans after El Salvador decided earlier this month to make Bitcoin legal currency. But China’s moves outweigh any positive momentum from that decision.
Bitcoin was down 8 percent to $US29,674.25, its lowest level since January 28, according to Coin Metrics. Bitcoin is down 54 percent from its mid-April peak, paring its year-to-date gain to 4.4 percent.
Traders had warned a break below $US30,000 could lead to more losses. “Bitcoin has violated an important support level, and we may likely see more panic in the market as investors will think that it may be the end of Bitcoin,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a Tuesday note.
“But investors should remember that Bitcoin is a kind of asset which has fought many similar pessimistic views many times. The current sell-off could be the opportunity for many investors to load their portfolio with Bitcoin, which is selling at a huge discount,”
Cuban told Newsweek that he hadn’t “dug in enough to know if something nefarious was going on. But I do take responsibility for not doing the math before I invested.
“It was all in black and white how the math of the stable coin and Titan worked. If I looked, it was there — how much needed to be added to support Titan and what would happen if sales overtook ads. I chose not to do the work. “For me, I decided it wasn’t worth my time to dig in far enough. I took a flyer. My mistake,” he said.