Charlie Munger at the Berkshire Hathaway press conference on April 30, 2022.
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Berkshire Hathaway Vice Chairman Charlie Munger urged the US government to ban cryptocurrencies, as China has done, arguing that the lack of regulation enables excessive and gambling mentality.
“Cryptocurrency is not a currency, not a commodity and not a security,” Munger, 99, said in a statement. Op-ed published in The Wall Street Journal Thursday.
“Instead, it is a gambling contract with almost 100% edge to the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete loosely,” Munger said. Told. “Obviously the US must now enact a new federal law that prevents this from happening.”
Munger and his business partner Warren Buffett have long been cryptocurrency skeptics, arguing that they are not tangible or productive assets. Munger’s latest comments came as the crypto industry was plagued by problems ranging from failed projects to a lack of liquidity, which was exacerbated by the collapse of one of the world’s largest exchanges, FTX.
cryptocurrency market over $2 trillion in damage in value last year. value of BitcoinThe world’s largest cryptocurrency, according to Coin Metrics, fell 65% in 2022 and is trading around $23,824, down nearly 40%.
The well-known investor said that thousands of new cryptocurrencies have been issued by privately owned companies in recent years, and they are publicly traded without prior government approval disclosures. Munger said some have been sold to the promoter for almost nothing, with the public then buying at very high prices without fully understanding the “pre-dilution in favor of the promoter”.
He listed two “interesting precedents” that could guide the US into concrete action. FirstChina strictly bans businesses offering services, order matching, token issuance and derivatives for virtual currencies. Second, beginning in the 1700s, the English Parliament banned all public trading in new common shares, and this ban remained in place for about 100 years, Munger said.
Munger added, “What should the US do after it bans cryptocurrencies? Well, another course of action might make sense: thank the Chinese Communist leader for his brilliant example of his unusual wisdom.”
(Read the full article in the journal Here,