Cryptocurrency Rating Is Repeating the Mistakes of Moody's, S&P and FitchsteemCreated with Sketch.

in ico •  6 years ago 

Brave New Coin recently reported that it was quite easy for blockchain startups to “buy” good ratings from rating agencies that are not regulated by financial regulators.


Source: Brave New Coin

I do not think that there is yet a cryptocurrency rating agency that can command the authority of Moody's, S&P and Fitch (The “Big Three”). However, it does not mean that fewer investors are exposed to unregulated cryptocurrency rating agents.

Let's remember that one of the causes for the financial tsunami in the 2008 was that the rating agents gave generous grades to sub-prime mortgage loans which were in fact sub-standard. Unsuspecting investors who believed in their ratings bought derivatives that are backed by the sub-prime mortgage loan, thinking that the “AAA” ratings were “real”.

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