The philosopher and author of the cult work The Black Swan, Nassim Taleb, said that the DeFi sector has reinvented ‘bucket shops’, and urged young traders to learn from older traders.
Bucket shops referred to companies that, in the early 20th century, allowed ordinary Americans to speculate on stocks or commodities without owning them. The practice was eventually deemed illegal.
“Bucket shops appeared just about 90 years ago. Now DeFi is managing to reinvent them. The Twitter-educated youth should sit with surviving traders, sipping aged brandy, keep quiet and learn,” Taleb wrote.
Thus he commented on a Bloomberg article, in which the publication detailed synthetic versions of Tesla, Apple, Amazon and other public companies, as well as several popular ETF.
Projects such as Mirror Protocol and Synthetix tokenize securities. These blockchain-issued tokens are designed to reflect the prices of tracked assets without any actual purchases or real sales.
Some experts fear that these instruments enable traders to circumvent certain stock-market rules and laws. For example, they enable anonymous trading, which runs counter to Know Your Customer (KYC) requirements that are mandatory for traditional broker-dealers.
In April 2021, the Bitcoin exchange Binance announced the listing of tokenised stocks. In the same month, BaFin warned investors of a possible breach of securities law by the platform. The regulator cited the lack of necessary prospectuses.
Similar claims were filed against Binance by the FCA, according to the Financial Times.
Taleb has repeatedly criticised Bitcoin and the blockchain industry. In May 2021, he called digital gold a ‘mega Ponzi scheme’.
In June, the philosopher published an article stating that the first cryptocurrency is not money or a store of value and is not suitable for hedging inflation.
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