Kieran Maguire blasts Leeds ‘pump and dump’ scheme as price crash takes hold
Leeds United are culpable in a “pump and dump” scheme through their sponsorship deal with a cryptocurrency provider.
That is the view of finance guru Kieran Maguire, speaking exclusively to Football Insider about Leeds and their relationship with Socios.
Leeds signed up with Socios in August (2021) and their official fan token, $LUFC, went live the following month.
New York Times reporter Tariq Panja relayed a dramatic spike and crash in the price of the Leeds token last Thursday (30 December).
Prices began at around $6 before soaring to nearly $19 and subsequently falling to around $7 in a matter of hours.
Maguire accused Socios of operating a Ponzi scheme and claimed that Leeds are guilty of not disclosing the risks involved to their supporters.
“The trouble with the fan tokens is that if they are treated purely as a digital version of a panini card, it’s fine,” he told Football Insider‘s Adam Williams.
“But what we have in reality is what’s known as ‘pump and dump’. That is when you try and get people interested, you flood the market, and the market collapses.
“The trouble with the tokens is that they are unregulated and the price is inherently volatile.
“It is held up by speculation. That’s where the increase in value comes from.
“Also, the markets are easy to manipulate because you can have one or two parties having 20 per cent of the market and they become market-makers.
“If it is going to be treated as an investment, it’s ridiculously speculative and would not be recommended by anyone with any financial background.”
The Premier League is set to review its relationship with crypto after widespread criticism from journalists and fan groups.
Leeds raked in £34million in commercial income in the 2020-21 campaign.
In other news, Noel Whelan issues Leeds United fears after Patrick Bamford training ground reveal via Sky Sports.