Charlie Munger Slams Crypto, Calls Out Fraud and Regulatory Failures

• Charlie Munger ripped into cryptocurrencies, saying fraud and delusion are common in the industry.
• Regulators overlooked crypto’s risks and should have banned it, Warren Buffett’s business partner said.
• Munger said Wall Street banks and top investors were too eager to embrace crypto.

Warren Buffett’s business partner has torn into cryptocurrencies once again, declaring the space is rife with fraud and delusion, and regulators have dropped the ball by not outlawing bitcoin and other digital assets.

Charlie Munger, a billionaire investor and the vice-chairman of Buffett’s Berkshire Hathaway, issued the fiery comments during a CNBC interview aired on Tuesday. He spoke days after Sam Bankman-Fried’s digital-asset exchange, FTX, filed for bankruptcy.

“It’s partly fraud and partly delusion — that’s a bad combination,” Munger said about the crypto industry. “People think this is a real asset, it’s not a real asset,” he added about the coins themselves.

The 98-year-old investor bemoaned the growing acceptance of crypto by Wall Street banks and hedge funds, and suggested financiers are far too eager to buy into the latest fad.

“It pains me that in my own country I see people that once were regarded as very reputable people helping these things exist,” he said. “There are people who think that you’ve got to be on every deal that’s hot.”

Munger added that it’s “crazy” and “demented” to think someone can mint a new token that can turn a 12-year-old into a billion are overnight.

Buffett’s right-hand man also suggested the novelty of crypto has meant regulators have failed to grasp its dangers. He criticized authorities for not banning crypto early on.

“The danger flags are wagging so clearly,” he said. “None of this stuff should ever have been allowed.”

Munger has previously compared crypto to a “venereal disease” and an “open sewer,” and said he wouldn’t want someone in the space to marry into his family.

This story is being updated, check back for more details.