The economist Nouriel Roubini is ramping up his vitriolic remarks on the ailing cryptocurrency business Cryptocurrencies Are Fraudulent. Most especially on FTX and its discredited founder Sam Bankman-Fried, often known as SBF.
“FTX and SBF are not an exception — they are the rule,” the NYU professor nicknamed “Dr. Doom” for his pessimistic outlook on global trends. On Y! Finance Live at the World Economic Forum in Davos, Switzerland, on Wednesday, he announced. “Practically all cryptocurrencies are fraudulent. A criminal offense, a whole real-world Ponzi scheme that is failing.”
Roubini has been an outspoken opponent of cryptocurrencies, labeling most industry participants con artists. It led to a verbal battle with Binance CEO Changpeng Zhao some months ago.
Late in 2022, FTX filed for bankruptcy. Its creator, SBF, pled not guilty to wire fraud, securities fraud, and conspiracy allegations.
At 29, SBF became a crypto billionaire and a prominent figure in the business. After a year, his wealth was lost when investors were thrown into chaos by the departure of trust and capital from the crypto world.
Under Bankman-guidance, Fried’s FTX, once one of the largest and most trusted cryptocurrency exchanges, allegedly transferred billions of dollars in customer funds to his trading firm, Alameda Research.
If found guilty, Bankman-Fried may face up to 115 years in jail. The trial has been scheduled for 2 October 2023.
Roubini compared the repercussions of the FTX collapse to those of Bernie Madoff’s Ponzi scheme. Still, he emphasized that in Madoff’s case, just a few thousand individuals lost a significant amount of money compared to the millions who did not fare as poorly affected by the FTX collapse.
Roubini expressed similar pessimism regarding blockchain technologies, claiming that “you cannot generate confidence with technology alone” without verification from a reputable organization.
Put global supply networks on the blockchain, ensuring your Whole Foods tomatoes are organic. However, how do you know? Roubini stated. “Because you put [it] on the blockchain, Whole Foods must send personnel to the farms to ensure that they’re not using pesticide GMOs, etc. Then conduct additional tests in the store to ensure that whatever they’ve tested there is still present.”
According to Roubini, the assumption that distributed ledger technology can build confidence is “impossible” because “you always need a reputable entity to confirm the transaction. Therefore, most of what is referred to as blockchain is not a blockchain but a glorified database.
The economist supported his point with Google results.
“Therefore, Google Docs is a permission database, and everyone uses it,” he continued. “No one refers to this as blockchain because it is not blockchain. Therefore, blockchain is a fad and an energy-wasting technology completely useless.”