The chief executive of California-based asset manager Research Affiliates has called cryptocurrencies a “Ponzi scheme”, claiming bitcoin and the blockchain technology underpinning the world’s largest digital asset help fuel illegal activity.
“They are a Ponzi scheme that facilitates money laundering,” Chris Brightman told Financial News when asked about his views on cryptocurrencies.
Brightman, who became CEO of the $168bn asset manager in 2021, said bitcoin is not a medium of exchange, nor a reliable store of value or an inflation hedge — claims made by some promoters of the digital currency.
Brightman said bitcoin was purely speculative, making money for those who hold it by selling on to others at a higher price.
He said he had concerns about blockchain, which some asset managers have claimed has the potential to disrupt industries. The technology has been lauded for its ability to create decentralised records of ownership that cannot be altered or changed.
Brightman said the more he looks into the subject, the less he finds “of substance as to what the blockchain really is”.
“The issue is not so much whether distributed ledger is a reasonable coding technique that could be applied, the question is what legal ownership does this convey? The idea that we somehow can use distributed ledger technology to eliminate all the constraints of centuries of legal convention is a libertarian pipe dream.”
