Nouriel Roubini, also known as “Dr. Doom” for his dire perspectives on global trends, has once again spoken out against the cryptocurrency industry. At the World Economic Forum in Davos, Switzerland, Roubini stated that “Literally 90% of crypto is a scam. A criminal activity. A total real-bubble Ponzi scheme that is going bust.”
Roubini specifically targeted FTX and its now-disgraced founder, Sam Bankman-Fried, commonly known as SBF, stating that “FTX and SBF are not an exception — they’re a rule.” FTX, once considered one of the largest and most-trusted cryptocurrency exchanges, filed for bankruptcy in late 2022, while its founder SBF faces charges of wire fraud, securities fraud, and conspiracy, all of which he has plead not guilty to.
The economist has a long history of criticizing the cryptocurrency industry, and has previously called most in the industry con-men. This has led to a war of words with Binance CEO Changpeng Zhao. Roubini’s latest comments come as U.S. prosecutors allege that under Bankman-Fried’s direction, FTX transferred billions in customer assets to his trading firm, Alameda Research.
Roubini urged people to stay away from crypto and argued that “most of these people belong literally in jail. Literally they’re all crooks.” He also compared the fallout of the FTX collapse to Bernie Madoff’s Ponzi scheme, but noted that in that case, a few thousand people “lost their shirt” compared to the millions impacted by FTX.
In addition to his skepticism towards cryptocurrencies, Roubini also expressed similar skepticism towards blockchain technologies. He argued that “you cannot essentially create trust with technology alone” without verification from a trusted institution. He cited Google as an example, stating that “Google Docs is a permission database and everybody’s using it. Nobody’s calling [that] blockchain because it’s not blockchain.” He went on to say that “blockchain is a fad and it’s totally useless technology and wastes a lot of energy.”
Roubini’s comments come as the trial date for SBF has been set for October 2, 2023. If convicted of the charges against him, he faces up to 115 years in prison.
