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Jamie Dimon slams ‘dangerous’ bitcoin, crypto as ‘Ponzi scheme’

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Jamie Dimon doubled down on his longstanding antagonism toward cryptocurrencies on Wednesday because the JPMorgan Chase CEO told lawmakers that he viewed bitcoin and other digital coins as “dangerous” — likening them to a “decentralized Ponzi scheme.”

“I’m a serious skeptic of crypto tokens, which you call currency, like bitcoin,” Dimon said during an appearance alongside other banking executives before the House Financial Services Committee on Wednesday.

“They’re decentralized Ponzi schemes, and the notion that it’s good for anybody is unbelievable,” he said.

Dimon said that the unregulated crypto marketplace makes it easier for criminals to interact in illicit activity corresponding to money laundering, theft, and sex trafficking.

“It’s dangerous,” he said.

Dimon, whose net price has been pegged by Forbes at $1.4 billion, has repeatedly denigrated bitcoin and cryptocurrencies, calling them a “fraud” and “idiot’s gold.”

Dimon and other CEOs of Wall Street giants appeared before the House Financial Services Committee on Wednesday.REUTERS

Last 12 months, he really useful that investors put their resources into more reliable assets corresponding to dollars or gold. He also urged the federal government to step up regulation of the digital coins.

Dimon, who assailed Democrats for urging an end to investments in oil and gas, said on Wednesday that he would encourage his clients to speculate in “stablecoins” which can be pegged to the dollar.

He touted JPMorgan’s use of blockchain in addition to the bank’s own coin that will be exchanged for dollars at a set rate.

“It might be moved just the way in which cryptocurrencies will be moved — stable value, very low price,” Dimon told lawmakers.

The value of bitcoin and other cryptocurrencies has plummeted since reaching all-time highs in November.The worth of bitcoin and other cryptocurrencies has plummeted since reaching all-time highs in November.Getty Images

Dimon also sounded the alarm on Wednesday over the state of the US economy, saying that Americans were getting “crushed” by record levels of inflation.

Mainstream financial giants on Wall Street have reluctantly come around to embracing cryptocurrency lately.

Last 12 months, Morgan Stanley became the primary bank to let clients trade crypto. It also began to speculate its own money within the volatile assets.

Morgan Stanley long resisted dipping its toes into the crypto market, but senior bankers capitulated to pressure from agitated clients desperate to gain access to the virtual currencies which on the time were minting newfound millionaires seemingly overnight.

In April, Goldman Sachs joined the fray when it began offering its first-ever lending facility backed by bitcoin.

The crypto markets are within the midst of a severe downturn.

Dimon has urged the federal government to aggressively regulate digital currencies.Dimon has urged the federal government to aggressively regulate digital currencies.Bloomberg via Getty Images

Bitcoin’s value, which reached an all-time high of greater than $64,000 in November, has plummeted to south of $20,000. The market capitalization of cryptocurrencies has fallen by two-thirds during that period — from a high of $2.8 trillion to only $930 billion.

Dimon’s peers within the banking industry told lawmakers that their financial institutions don’t have any plans to finance crypto mining, the energy-intensive process for increasing the circulation of digital coins which has been blamed for exacerbating climate change.

Citigroup CEO Jane Fraser, Bank of America boss Brian Moynihan, and Wells Fargo chief Charles Scharf all pledged to not back mining operations when quizzed by Rep. Brad Sherman (D-Cal.), a crypto mining skeptic.

Lawmakers within the Democrat-controlled Congress have urged regulators to tighten the screws on crypto mining operations.

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