Co-founder of Chinese blockchain platform calls Bitcoin a Ponzi scheme

Unregulated cryptocurrencies, including Bitcoin, are ‘the largest Ponzi scheme in human history’. This view is held by He Yifan, CEO of Red Date Technology and co-founder of the BSN, in his article for The People’s Daily.

He drew a parallel with a fraudulent scheme, pointing to a lack of liquidity and value, insider trading, security gaps, and a constant influx of new investors.

“…the work of all cryptocurrency projects is entirely based on marketing, and technical investments are negligible,” the author of the article noted.

To support his position, the head of Red Date Technology pointed to the collapse of the Terra ecosystem:

“There are many opinions about why LUNA and UST collapsed in an instant, but one point that few mention is that they combine two types of Ponzi schemes, based on cash and stocks, interwoven with each other.”

He Yifan also mentioned Elon Musk and Dogecoin. In his view, a billionaire’s ‘random tweet’ could push the price of the meme cryptocurrency “three feet off the ground.” However, he acknowledged that with proper oversight by authorities, part of the market may not be regarded as a financial pyramid.

USDC or USDT are payment currencies, not speculative assets. Once they come under full regulation, everything will be fine,” the article states.

He Yifan criticized the M2E and P2E models. In his view, developers created a ‘trap’ for users to sustain audience growth. Earlier, one of the sector’s popular players — STEPN — announced the cessation of servicing users in China.

The head of Red Date Technology stressed that he is not a fan of Bitcoin and similar cryptocurrencies. In his article he noted that critics of digital assets included Microsoft founder Bill Gates and billionaire investor Warren Buffett.

He Yifan, in a comment to Cointelegraph, added that governments that legalised BTC, such as El Salvador, “seriously need basic financial education.”

“Otherwise they risk whole countries, unless their initial intentions were to create state crypto trading platforms and defraud their citizens,” the interlocutor said.

In June, Salvadoran President Nayib Bukele urged investors not to worry about the quotes of the leading cryptocurrency. He said investments in digital gold would grow immeasurably after the bear market ends.

Against the backdrop of Bitcoin’s slump on June 13, the country’s ‘paper’ loss from holdings of BTC in the state fund exceeded $46.1 million.

In December 2021, Chinese authorities said that metaverses and NFTs could be bubbles, Ponzi schemes, or other forms of financial fraud.

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