Cryptocurrencies amount to a “wretched excess” that should be banned in the US, Berkshire Hathaway’s billionaire vice chairman Charlie Munger argued in a scathing column this week.
Munger — the 99-year-old, right-hand man of legendary investor Warren Buffett — has been an outspoken critic of bitcoin and other unregulated digital tokens, which he once likened to a “venereal disease” he was glad to have avoided.
In a column for The Wall Street Journal, Munger doubled down on his view that cryptocurrencies are a predatory scam targeting ordinary investors.
“A cryptocurrency is not a currency, not a commodity, and not a security,” Munger wrote in the op-ed published Wednesday. “Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity.”
“Obviously the US should now enact a new federal law that prevents this from happening,” Munger added.
Munger suggested that Congress should follow the example set by China, which banned cryptocurrency trading and mining in 2021 due to concerns about its potential risks.
Cryptocurrencies have struggled over the last year during an economic slowdown.
The billionaire also made a more obscure reference to the British Parliament’s passage of the Bubble Act in 1720, which banned public trading of new common stocks after the speculative trading saga known as the ‘South Sea Bubble” resulted in a major economic crisis. The ban remained in place for more than a century.
“In that 100 years, England made by far the biggest national contribution to the march of civilization as it led strongly in both the Enlightenment and the Industrial Revolution and, to boot, spawned off a promising little country called the United States,” Munger said.
Forceful condemnations of the crypto sector are nothing new for Munger, who has blasted the industry and its major players on several occasions in the past.
When asked about FTX’s collapse into bankruptcy last November, Munger told CNBC that cryptocurrencies are a “very, very bad thing” that was ripe for exploitation.
Charlie Munger cited the Chinese government’s decision to ban crypto in 2021.
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“The country did not need a currency that’s good for kidnappers and so on,” Munger said at the time. “There are people who think they’ve got to be on every deal that’s hot. They don’t care whether it’s child prostitution or bitcoin. If it’s hot, they want to be in on it. I think that it’s totally crazy.”