CEO Of Largest US Bank: Crypto Tokens Like Bitcoin Are Decentralized Ponzi Schemes

CEO Of Largest US Bank: Crypto Tokens Like Bitcoin Are Decentralized Ponzi Schemes

Bitcoin ponzi

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Jamie Dimon, the CEO of JPMorgan Chase & Co., keeps badmouthing crypto, then apologizing, then disparaging it again, most recently while giving testimony before Congress.

“I’m a major skeptic on crypto tokens, which you call currency, like Bitcoin,” Dimon said Sept. 21 in congressional testimony. “They are decentralized Ponzi schemes.”

House Financial Services Committee Chairwoman Maxine Waters and Ranking Member Patrick McHenry have been working to reach an agreement on stablecoin legislation. The latest version of the bill, obtained by Bloomberg, would make it illegal to issue or create new “endogenously collateralized stablecoins” such as those similar to TerraUSD, the algorithmic stablecoin that collapsed earlier this year.

Stablecoins — digital assets pegged to the value of the U.S. dollar or other currencies — wouldn’t be problematic if the proper regulations were in place, Dimon told Congress.

Dimon called Bitcoin “a fraud” in 2017, then took it back, saying he regretted what he’d said.

Active on the blockchain, JPMorgan was among the first of the big banks to move into crypto in 2021, launching its own token, JPM Coin, and offering institutional clients access to Bitcoin.

Along with the recent crash in crypto prices, JP Morgan has seen a plunge in demand from clients. No one is using crypto to pay for things anymore, said JPMorgan global head of payments, Takis Georgakopoulos.

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The price of Bitcoin has crashed from more than $65,000 in November 2021 to less than $20,000.

“When it comes to crypto as a payment method, we saw a lot of demand [from] our clients, let’s say up until six months ago. We see very little right now,” Georgakopoulos said Sept. 20 on Bloomberg TV

Dimon is not alone in describing crypto as a Ponzi scheme.

Bitcoin could be the biggest scam and Ponzi scheme ever perpetrated, according to the Gravel Institute, a progressive think tank that compared the world’s No. 1 cryptocurrency to a form of fraud that promises high returns but pays earlier investors with funds from new investors. With no legitimate profit to sustain the process, the whole thing eventually collapses. 

Charles Ponzi, for whom Ponzi schemes are named, swindled Americans out of $15 million in the early 1920s. Bernie Madoff pulled off the largest Ponzi scheme to date, conning thousands of investors out of $20 billion in principal funds. He was arrested in 2008 and died in prison on April 14 at age 82.

Legendary mathematician Nicholas Taleb, author of “The Black Swan” and a one-time admirer-turned-detractor, has denounced Bitcoin as a gimmick that resembles a Ponzi scheme.

Bitcoin is not a safe hedge against inflation and it’s too volatile to be an effective currency, Taleb told MSNBC.

“Everybody knows it’s a Ponzi,” Taleb said. “Basically, there’s no connection between inflation and bitcoin. None. I mean, you can have hyperinflation and bitcoin going to zero. There’s no link between them.”