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Charlie Munger blasts crypto after FTX meltdown: ‘Good for kidnappers’

Billionaire and famous bitcoin critic Charlie Munger took a victory lap Tuesday after FTX’s latest meltdown – blasting cryptocurrencies as a “demented” enterprise rife with “fraud” and delusion.”

When requested about FTX’s collapse out of business, the 98-year-old Berkshire Hathaway vice chairman referred to digital currencies as a “very, very bad thing” ripe for exploitation by unhealthy actors.

“The country did not need a currency that’s good for kidnappers and so on,” Munger mentioned throughout a Tuesday appearance on CNBC. “There are people who think they’ve got to be on every deal that’s hot. They don’t care whether it’s child prostitution or bitcoin. If it’s hot, they want to be in on it. I think that it’s totally crazy.”

“Reputation is very helpful in financial life,” Munger added. “To destroy your reputation by associating with scumballs and scumball promotions is a huge mistake.”

Charlie Munger is vice chair at Berkshire Hathaway.
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FTX and greater than 100 of its associates – together with cryptocurrency buying and selling agency Alameda Research – filed for chapter final week after dealing with a sudden liquidity crunch. In filings launched Tuesday, the company disclosed it might have multiple million collectors in its case.

FTX CEO Sam Bankman-Fried and Alameda Research CEO Caroline Ellison are below intense scrutiny to clarify what went unsuitable throughout the downfall. Reuters reported that Bankman-Fried had “secretly transferred $10 billion of customer funds” from FTX to Alameda to prop up its shaky operations.

Munger expanded on his level concerning the business, noting that he was seeing “a lot of delusion” amongst traders within the cryptocurrency sector.

FTX is under federal investigation after it allegedly used customer funds to bankroll risky bets using a sister research company.
FTX is below federal investigation after it allegedly used buyer funds to bankroll dangerous bets utilizing a sister analysis company.
AFP by way of Getty Images

“It’s partly fraud and partly delusion. That’s a bad combination,” Munger mentioned. “I don’t like either fraud or delusion and the delusion may be more extreme than the fraud.”

“If you’ve got a good idea, it’s much easier to push that to wretched access,” Munger added. “Good ideas, carried to wretched excess, become bad ideas. Nobody’s gonna say, ‘I got some s—t that I want to sell you.’ They say – it’s blockchain!’”

Munger, the longtime right-hand man to Warren Buffett, has garnered a repute for his colourful remarks about cryptocurrencies in recent times.

The founder of FTX, Sam Bankman-Fried, has seen his net worth go from $16 billion to zero.
The founding father of FTX, Sam Bankman-Fried, has seen his internet value go from $16 billion to zero.
Bloomberg by way of Getty Images

In July, Munger known as the “crypto craze” a “mass folly,” including that he avoids it “as if it were an open sewer, full of malicious organisms.”

A couple of months earlier in February, Munger mentioned digital tokens have been like a “venereal disease” that he was completely satisfied to keep away from.

“I just regard it as beneath contempt,” Munger mentioned. “Some people think it’s modernity and they welcome a currency that’s useful in extortions and kidnappings and so on and so on, tax evasions.”

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