All Ponzi schemes topple eventually

One week ago, as cryptocurrency prices plummeted, Celsius Network – an experimental cryptocurrency bank with more than one million customers that has emerged as a leader in the murky world of decentralized finance, or DeFi – announced it was freezing withdrawals “due to extreme market conditions”.

Earlier this past week, Bitcoin dropped 15% over 24 hours to its lowest value since December 2020. Last month, TerraUSD, a stablecoin – a system that was supposed to perform a lot like a conventional bank account but was backed only by a cryptocurrency called Luna – collapsed, losing 97% of its value in just 24 hours, apparently destroying some investors’ life savings.

Eighty-nine years ago, Franklin D Roosevelt signed into law the Banking Act of 1933 – also known as the Glass-Steagall Act. It separated commercial banking from investment banking – Main Street from Wall Street – to protect people who entrusted their savings to commercial banks from having their money gambled away.

Glass-Steagall’s larger purpose was to put an end to the giant Ponzi scheme that had overtaken the American economy in the 1920s and led to the Great Crash of 1929…

Which brings us to the crypto crash.

I know a few folks who’ve been gambling in crypto since the advent of Bitcoin. I hope they’ve they’ve “taken the money and run”! I know a little bit about Ponzi schemes and 1929. RTFA for the beginning of the discussions coming up in the near future.

7 thoughts on “All Ponzi schemes topple eventually

  1. RaPaR says:

    Well maybe one that doesn’t. The Christian religion has been fleecing their parishioners for TWO THOUSAND YEARS, all while asserting the return of a Jewish guy that was executed by the ROMANS two millennia ago! Now, THAT’S a Ponzi Scheme!!

  2. Uh-oh says:

    “Bill to grant crypto firms access to Federal Reserve alarms experts : The legislation would require the Fed to give crypto banks access to its payment rails. Some say that would be destabilizing.”
    “…The push by crypto firms to join the banking system’s central plumbing comes at a fraught moment for the industry and its regulators. A steep sell-off in cryptocurrencies has erased $700 billion from the digital asset market since early May, forcing a reckoning for some previously highflying start-ups, including firms attempting to bridge the divide between the crypto economy and traditional finance. One such firm, Celsius Network, halted withdrawals last month, citing “extreme market conditions” as it froze as much as $8 billion in deposits.”

  3. Crap game says:

    Cryptomining boom has people’s energy bills skyrocketing; feds mull new rules
    No major US cryptominers said they track energy use impacts on local residents.
    Meanwhile: Tesla has dumped 75% of its bitcoin holdings a year after touting ‘long-term potential’
    The company invested $1.5 billion in bitcoin early last year and claims the recent sales added $936 million in cash to its balance sheet.

  4. Judas goat says:

    Kim Kardashian has agreed to pay a $1.26 million fine for pushing a dubious cryptocurrency asset to her hundreds of millions of social media followers without disclosing that she’d been paid to do so, the Securities and Exchange Commission said Monday.
    The reality star and business mogul agreed to settle charges brought against her by the SEC over an Instagram post promoting EMAX tokens—a celebrity-backed crypto asset offered by EthereumMax. Kardashian did not reveal that she had been paid $250,000 for the post, which contained a link to the EthereumMax website which provided instructions for buying the tokens.

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