Investment experts say wearebamboo’s cryptocurrency controversy is a ‘problem gambling’

Investment experts say they believe it was a “gamble” for a Kiwi travel company to lose millions of dollars in client funds for cryptocurrency.

Customers have also lodged complaints about Hutt Valley-based Wearebamboo with the police, trade commission and
and the Serious Fraud Office (SFO). The police closed their investigation and left further investigations with the Serious Fraud Office and the Trade Commission, who have suspended their investigations pending the outcome of the company’s liquidation.

today is Announce Director Colin Salisbury has revealed that he lost more than $2 million ($3.24 million) trading cryptocurrency, according to a liquidator’s report. The trading spanned what was described as a “staggering” 59,000 transactions and included payments to several fraudulent crypto platforms.

The losses left hundreds of customers out of pocket after they paid for their flights, only to be told in October that the company was folding and they wouldn’t get their money back.

The company allowed customers to book international vacation packages that included time spent volunteering in communities, as a way for travelers to give back to the places they visited.

But financial advisor Darcy Ungaro said cryptocurrency is not the problem.

Ungaro viewed cryptocurrencies, specifically Bitcoin, as a valid investment to include in investors’ portfolios. He said it has shifted from a high-risk investment to a “quite legitimate asset class in the eyes of some investment advisors.”

But in this case, he thought it was “more about a problem gambler than a cryptocurrency enthusiast,” he said.

“With people who have financial issues or have an appetite for risk without a lot of balance…they are likely to gravitate towards anything easy and exciting, and also cryptocurrency, as it is known as a really volatile investment, naturally attracts those who are willing to take risks without thinking too much.” .

“Once a large amount of money is under some people’s control, if there is a particular lack of regulation around their business model, they are more likely to make investments or gamble with it.”

Salisbury told the BDO liquidators that he invested the money because he was concerned about the stability of the US dollar, but Ungaro was not convinced.

“I would suggest that this is really just a convenient excuse,” he said.

Mark Lister, chief investment officer at Craigs Investment Partners, said it was a “ridiculous concern” and that the measures were “incredibly foolish”.

“If the solution to the tension over the safety of the US dollar is to put money into cryptocurrencies, it really highlights how little anyone knows anything related to financial markets.

“I’m not sure of anything [the customers] These deposits were expected to be invested in any risky asset, not the stock market, not the real estate market, and certainly not in cryptocurrency. So this is supposed to be an approach that is not quite in line with what these customers would have expected, and it is unfortunate that this business has chosen to disrespect these people’s money in this way and lose it entirely.”

Lister said that cryptocurrencies were a “highly volatile space,” but also noted that client funds should not be placed in any type of investment category.

“It should be put into something with the utmost security in mind, not into volatile assets that move up and down… Crypto is a whole new level in terms of its volatility and potential volatility that you can see in those high-risk asset types.”

In his opinion, it was “using someone else’s money to gamble,” Mike Taylor, founder of Pie Funds, said.

The money should have been in a bank, and “they shouldn’t have done anything else with it”.

“If they make money from their business and want to convert it into cryptocurrency, that’s fine for them, but customers’ money, it shouldn’t do that.”

Client Deb Baldwin said she was supposed to take the bamboo trip to Uganda last February, but instead “my money just went on a trip.”

“I trade a lot one day, but not cryptocurrencies, and I remember cryptocurrency prices, while the price goes up and down, it was always higher than it was in October 2020,” said the Canadian woman.

“I hope that there will be a very detailed investigation into cryptocurrency trading.”

She said the number of deals Salisbury made was “staggering”.

“It can be easy to lose money in the stock market, so the fact that they felt it was a gamble to gamble with several million of other people’s money makes my blood boil.”

Ann Marie Taylor, 68, from Wales, has paid in full for a trip to Vietnam, plus bail for another trip next year.

In total, I lost $2,750 (4,445 USD). The pensioner is on a fixed income, and cannot afford to lose thousands of dollars with nothing to show for it.

“They were vacations I had planned, and they were all on my wish list. I don’t know when or if I’ll ever be able to get there.

I felt “utterly sick” of hearing where the money had gone.

“It wasn’t their money to gamble,” she said. It should have been in a safe place.

“I just hope some justice is done, because I can’t see our money at all.”

She has gone on trips with Bamboo in the past, where she taught English to 5-6 year olds in Cambodia, and another where she helped care for elephants in Thailand.

“It was absolutely amazing. It wasn’t just a vacation, it actually felt like you were making a difference to some of the people who were living in those countries.”

Shelly Miller, an Alaskan woman, said the money should have been set aside until it was needed for the trips.

“I feel like Colin W [co-founder Mark Foster-Murray] It has to be held accountable somehow.”

Miller knew she was lucky that losing her deposit wouldn’t “kill me financially,” but she said others have trickled in and saved for trips only to lose it all.

Customers and Covid blame the shutdown

At the time of its closing, Bamboo blamed Covid, as well as a group of customers who “were not willing to wait.” [for delayed trips]Their actions and influence online broke us, affecting us all.”

“Our intentions here are not to play the victim but simply to share with you the levels this group has reached to ensure our downfall, and to make their sole aim to attack us, our families, our employees and our customers with the intent of destroying bamboo.

“Our lawyers have informed us that several individuals have crossed the line, and there is a case and evidence for criminal proceedings.”

When some customers asked if thousands of dollars already paid for future vacations would be refunded, the company told them via email that they would not receive refunds, citing the “force majeure” section of their terms and conditions. Most of the customers were from the United States, Britain, Canada and Australia.

Melissa Nightingale is a Wellington-based reporter covering crime, justice and news in the capital. She joined the Herald in 2016 and has been a journalist for 10 years.