Reflecting on Ponzi Schemes
At the end of 2022, some people started shouting that Crypto was a Ponzi Scheme following earlier declarations by Bill Gates, Warren Buffett, and Charlie Munger.
Others, especially those in the crypto industry, were saying some version of “Well, FTX Might Looking Like a Ponzi Scheme, But Crypto is Legit and Isn’t a Ponzi Scheme.” But then someone else in the Crypto industry, on the same website, wrote Crypto Ponzi Schemes: How to Identify and Protect Yourself From These Scams. Ok. How confusing.
What should an investor believe? The SEC has an official publication, Ponzi schemes Using virtual Currencies. It’s … not helpful … and implies almost everything in crypto is a Ponzi scheme. At least it has some phone numbers you can call if you have questions. Yeah, still not helpful.
Yesterday, I binge-watched MADOFF: The Monster of Wall Street. I was tired, so I just sat around and absorbed four hours of a $65 billion, over 20-year Ponzi scheme. It’s worth watching for historical context.
While longer and less dramatic, it’s more informative than The Wizard of Lies, which stars Robert De Niro and Michelle Pfeiffer as Bernie and Ruth Madoff. However, De Niro completely nails the role of the monster of wall street.
As crypto continues to evolve, it’s worth remembering the part human nature and greed play in all of this. Whenever an economic bubble bursts, Ponzi’s and fraud are revealed. And there’s plenty of it, especially (Read more...)