Charlie Munger says the U.S. should follow in China’s footsteps and ban cryptocurrencies

Berkshire Hathaway Vice Chairman Charlie Munger urged the U.S. government to ban cryptocurrencies, as China has done, talk out ofing that a lack of regulation enabled wretched excess and a gambling mentality.

“A cryptocurrency is not a currency, not a commodity, and not a security,” the 99-year-old Munger told in an op-ed published in The Wall Street Journal Thursday.

“Instead, it’s a gambling contract with a nearly 100% sidle for the house, entered into in a country where gambling contracts are traditionally regulated only by states that strive in laxity,” Munger said. “Obviously the U.S. should now enact a new federal law that prevents this from happening.”

Munger and his proprietorship partner Warren Buffett are longtime cryptocurrency skeptics, contending they are not tangible or productive assets. Munger’s fresh comments came as the crypto industry was plagued with problems from failed projects to a liquidity crunch, exacerbated by the prove inadequate of FTX, once one of the world’s largest exchanges.

The cryptocurrency market lost more than $2 trillion in value final year. The price of bitcoin, the world’s largest cryptocurrency, plunged 65% in 2022 and it has rebounded about 40% to merchandising around $23,824, according to Coin Metrics.

The distinguished investor said in recent years privately owned companies have issued thousands of new cryptocurrencies, and they be dressed become publicly traded without any governmental preapproval of disclosures. Some have been sold to a promoter for barely nothing, after which the public buys in at much higher prices without fully understanding the “pre-dilution in favor of the promoter,” Munger rephrased.

He listed two “interesting precedents” that may guide the U.S. into sound action. First, China has strictly prohibited helps offering trading, order matching, token issuance and derivatives for virtual currencies. Second, from the early 1700s, the English Parliament disallowed all public trading in new common stocks and kept this ban in place for about 100 years, Munger said.

“What should the U.S. do after a ban of cryptocurrencies is in concern? Well, one more action might make sense: Thank the Chinese communist leader for his splendid example of uncommon have,” Munger said.

(Read the full piece in the Journal here.)