TechDigits

Tech news
Sunday, May 28, 2023

Economist Nouriel Roubini

Wall Street’s ‘Dr. Doom’ calls crypto ‘corrupt gambling’ and rips ‘proof of reserves’ trumpeted after FTX collapse

Nouriel Roubini warned on Saturday, “Crypto is corrupt gambling where the house always & systematically front runs the retail suckers that get rekt.”
Nouriel Roubini is no friend of cryptocurrency exchanges. And he is flatly unimpressed with the “proof of reserves” idea that Binance and other crypto players are touting in the wake of FTX’s epic collapse. 

On Friday morning, Binance announced the release of its proof of reserve system, starting with Bitcoin. It wrote on its site, “Following our recent announcement outlining our commitment to transparency, Binance is releasing its Proof of Reserves (PoR) System, ​which is the next step in our effort to provide transparency on user funds. The launch of this feature will start initially with BTC, with other tokens and networks being added in the next couple of weeks.”

The same day, Roubini tweeted, “Crypto is corrupt gambling where the house always & systematically front runs the retail suckers that get rekt. 100+ million suckers rekt globally by a bunch of crypto gangsters.”

Earlier this week, he tweeted, “Proof of Reserves (PoR) is the gimmick used by crypto exchanges/lending platforms to pretend that their customers funds are safe. As these assets are in the exchange custody they are on its balance sheet & customers assets aren’t safe in bankruptcy. These are banks NOT exchanges!”

He also retweeted posts from others, including one on Saturday from Bitfinex’ed reading, “Exchanges are trying to do so-called proof of reserves to show that they have customers funds. Remember folks, proof of reserves are meaningless. Exchanges borrow from one another to show the crypto. That’s why you see ‘accidental’ transfers of hundreds of millions of dollars.”


“Totally corrupt” cryptocurrency industry

Roubini also called the cryptocurrency industry “totally corrupt” while speaking at Abu Dhabi Finance Week on Nov. 16. He urged Emiratis to expel Binance exchange founder Changpeng “CZ” Zhao—a resident of the United Arab Emirates who has a license to operate in the country—likening him to disgraced FTX founder Sam Bankman-Fried.

“He’s banned in the U.K. He’s under investigation by the U.S. justice department for money laundering…and he’s here on this stage and has residence in this country,” Roubini said. “He’s a walking time bomb. He should be kicked out of the country.” 

CZ suggested earlier this month that proof of reserves systems could reform the crypto industry and restore confidence among investors, offering a new level of transparency that would prevent the kind of sketchy accounting that contributed to FTX’s sudden implosion. 

“That is absolutely going to be where the focus is for the next little while, which is right,” he said. “We have learned from our mistakes.”

Even before the FTX collapse, Binance was the world’s largest crypto exchange. Now its position looks even stronger, but the FTX collapse has cast a shadow over the entire cryptocurrency space.

Roubini has a reputation on Wall Street as a bit of a pessimist. He accurately predicted the financial crisis that followed the unraveling of the U.S. housing market in 2007, and he recently authored The Age of Megathreats, which outlines 10 big economic problems facing the world.

In September, he warned the U.S. will be hit hard by recession in 2023 that will also devastate financial markets. “It’s not going to be a short and shallow recession,” he predicted. “It’s going to be severe, long, and ugly.” 

Our new weekly Impact Report newsletter will examine how ESG news and trends are shaping the roles and responsibilities of today’s executives—and how they can best navigate those challenges. Subscribe here.
Newsletter

Related Articles

TechDigits
Close
0:00
0:00
TikTok Sues Montana Over Law Banning the App
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
'Godfather Of AI' Geoffrey Hinton Quits Google To Warn Of The Tech's Dangers
Vermont Man Charged with Stalking After Secretly Tracking Woman with Apple AirTag
Elon Musk Statements About Tesla Autopilot Could Be 'Deepfakes,' Lawyers Claim. Judge Evette Pennypacker Does Not Understand How Far and Advanced This Technology Became
AT&T's Successful Test of Satellite-Based Phone Call Raises Possibility of Widespread Coverage
Pulitzer Prize-winning journalist Seymour Hersh slams New York Times' pro-government stance and treatment of sources
Fox News Settles their case with Dominion Voting Systems for a staggering $787.5 MILLION
The G-7 aims to make global crypto regulations tougher
China and Brazil have signed a new deal that will allow them to trade in their own currencies, bypassing the US dollar as an intermediary
Elon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society’
U.S. charges FTX's Bankman-Fried with paying $40 million bribe
Fallen 'Crypto King' Who Owes Millions to Investors Was Kidnapped and Tortured
Regulators blame social media for SVB's rapid collapse: 'Complete game changer'
AOC explains why she opposes banning TikTok
Gordon Moore, a co-founder of Intel Corporation, died at 94
Donald Trump arrested – Twitter goes wild with doctored pictures
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Russian Hackers Preparing New Cyber Assault Against Ukraine
A brief banking situation report
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
Banking regulators close SVB, the largest bank failure since the financial crisis
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Corruption and Influence Buying Uncovered in International Mainstream Media: Investigation Reveals Growing Disinformation Mercenaries
Being a Tiktoker might be expensive…
China's top tech firms, including Alibaba, Tencent, Baidu, NetEase, and JD.com, are developing their own versions of Open AI's AI-powered chatbot, ChatGPT
This shocking picture, showing how terrible is the results of the earthquake in Turkey
The desk of King Carlos Alberto of Sardinia has many secret compartments
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
First generation unopened iPhone set to fetch more than $50,000 at auction.
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Tesla reported record profits and record revenues for 2022
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Tesla slashes prices globally by as much as 20 percent
After Failing To Pay Office Rent, Twitter May Sell User Names
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Coinbase to Pay $100 Million in Settlement With New York Regulator
FTX assets worth $3.5bn held by Bahamas securities regulator
Former FTX CEO Bankman-Fried finally arrested in Bahamas after U.S. files charges
Corruption works: House Financial Services Chair Waters doesn't plan to subpoena her donor, Sam Bankman-Fried, to testify at hearing on FTX collapse
Yellen hints at ‘national security’ probe into Twitter purchase
Elon Musk reinstates Donald Trump's Twitter account.
×