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- John Oliver Compares Crypto to Casino and Ponzi Scheme
Mike Johnson April 25, 2023 3 min read
John Oliver Compares Crypto to Casino and Ponzi Scheme
The host of Last Week Tonight has returned to one of the hottest topics in the investment sector – cryptocurrencies and their validity
John Oliver’s remarks come at a time when the US Securities and Exchange Commission is looking to regulate crypto through a new proposed framework that will be deployed over the next 90 days. This has already scared investors, with companies such as Coinbase threatening to exit the market and entrepreneurs such as Chamath Palihapitiya describing the sector as dead in the United States.
New Episode Equally Critical of Crypto
In “Cryptocurrencies II,” the latest episode on Last Week Tonight, the popular host and comedian took a closer look at the cryptocurrency sector, arguing that it is a “casino” and a “Ponzi scheme.” The latest episode comes almost five years after Oliver did his first segment on cryptocurrencies and coincides with a number of high-profile collapses that have cost ordinary investors a lot of money.
The implosion of FTX, an exchange that was once hailed as a guarantor of sector stability, has triggered a chain reaction, wiping out billions worth of investor money. Oliver criticized the way that companies such as Terra, Celsius and FTX have tried to replace the mainstream financial system and got so big that they made this promise believable only to end up as “fiascos.”
Oliver emphasized that every crypto token is “just something that someone with a laptop made up.” Worse, the value of cryptocurrencies is determined by people’s beliefs. All three companies mentioned in Oliver’s example, enjoyed great confidence, boosting their value, which they then squandered.
The host called the way the crypto companies explained their products to users stupid, and offered humorous similes to explain how people get hooked on crypto by simply believing that it has value. Once people stopped believing the value plunged.
Oliver touched on Do Kwon, the man behind the Terra and Luna tokens, which value plunged to an essential zero following their $40 billion valuation. Kwon even told detractors on Twitter that they were poor, and they should therefore not waste his time. Celsius, a crypto bank that ended up belly up, was arguing that it was “probably one of the least risky businesses that regulators worldwide have ever seen,” which Oliver snapped at and said was simply not true.
Confidence Cannot Be What a Financial System Goes By
He then emphasized that much of the arguments that cryptocurrency companies deliver to land credibility to their projects were in fact “textbook definition of a Ponzi scheme,” and he has a point. Cryptocurrencies are essentially gambling, and they have been called so by Warren Buffet and Charlie Munger, two obstreperous old-guard financiers who have been nothing but determined critics of what they see as investment folly.
“The thing is, there are still companies out there making all the same claims that you’ve seen tonight,” the host warned. He cautioned that not all companies are scams, but the truth was, the host said preparing to deliver his closing statement, if “confidence” was the only metric to value a financial system had to go by, it was bound to attract and let scammers thrive.
Mike made his mark on the industry at a young age as a consultant to companies that would grow to become regulators. Now he dedicates his weekdays to his new project a the lead editor of GamblingNews.com, aiming to educate the masses on the latest developments in the gambling circuit.
Blockchain April 25, 2023