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The great crypto ‘ponzi scheme’ finally crashes

Ponzi Scheme

The great crypto ‘ponzi scheme’ finally crashes


These allegations have, nonetheless, been denied by Griffin’s independent brokerage firm, Citadel Securities (although notably not by his hedge fund, Citadel).

Even more sensationally, so-called “stable coins”, which are supposed to be pegged to specific currencies, such as the US dollar, and trade dollar-for-dollar with them, have collapsed as investors belatedly question the quality of the unstable assets (or collateral) backing these purportedly safe investments.

The TerraUSD stable coin, which is remarkably backed by bitcoin, used to trade consistently at $US1. In the past week, it has plunged 73 per cent to a low of just 27¢ after the value of its collateral had dropped like a stone. Some $US14 billion of TerraUSD value has vaporised as a result.

It beggars belief that these financial products have been pushed on naive consumers –that have little-to-no financial literacy – without a shred of regulatory protection in place.

The vast crypto ponzi schemes make the sharemarket “boiler-rooms” in the 1980s and 1990s (popularised by The Wolf on Wall Street film) look positively trivial in comparison!

Global regulators, including the SEC in the US, the FCA in the UK, and ASIC in Australia, have all been missing-in-action as the crypto-currency ponzi has exploded.

Terra’s price has collapsed from its US$1 peg with the USD to a low of US27c. Source: CoinMarketCap  CoinMarketCap

TerraUSD’s market cap has been slashed from US$18.8bn to US$4.75bn CoinMarketCap

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