Nouriel Roubini, a professor at NYU Stern School of Business, more popularly known as ‘Dr. Doom’, has slammed the cryptocurrency industry and its players.
In a guest article on Project Syndicate, Roubini said,
“there is overwhelming evidence of rampant fraud and abuse (in the cryptocurrency market)”.
Roubini specifically took aim at BitMEX, one of the top cryptocurrency exchanges, accusing it of being used for money laundering at a massive scale.
Rise of a New ‘Criminal’ Industry?
In his article titled “The Great Crypto Heist,” Roubini compared the cryptocurrency industry similar to an unregulated casino, where crime can run freely and unchecked. He added that price manipulation has become rampant across cryptocurrency exchanges, claiming that many such firms are openly indulging in pump-and-dump schemes, wash trading, and many other forms of market manipulation strategies.
Roubini went on to state that the cryptocurrency market is now a playground for criminals and con artists. He also labeled so-called experts as ‘opportunists’ for releasing financial books that tend to hype up the cryptocurrency market’s potential and value.
The NYU professor asked for an investigation into cryptocurrency exchanges. He also pointed to a study conducted by Bitwise Asset Management earlier in 2019, which found that 95 percent of Bitcoin transactions are falsified.
Dr. Doom Alleges BitMEX Involvement in “Systematic Illegality”
Roubini targeted BitMEX in particular, calling it “an unregulated trillion-dollar exchange of crypto derivatives.”
He added that BitMEX applies high fees for selling or buying cryptocurrencies and even takes a cut from customer savings for its liquidation fund. According to estimates, these savings make up around half of BitMEX’s revenue.
Roubini also claimed that BitMEX skirts around AML/KYC regulations since its method of verifying citizenship can easily be cheated using a VPN or proxy server. This lack of user verification is a big security and regulation violation. Moreover, the professor also said that there is no way to know what happens behind the scenes since BitMEX is entirely unregulated. And that’s not to mention the exchange’s recent auto-trigger event.
Roubini said that BitMEX insiders had personally told him that the exchange has become a medium for massive money-laundering operations by terrorists and criminals from countries like Russia and Iran. He further accused the cryptocurrency exchange of running an internal for-profit trading desk, which Hayes had already denied last year. In response to Roubini’s allegations, BitMEX CEO, Arthur Hayes, sternly rejected all allegations of criminality, manipulation, and unfair treatment.
Dr. Doom also accused Hayes of releasing “cherry-picked highlights” after securing exclusive rights to the video of a debate between them. The debate, dubbed “Tangle in Taipei,” had both men arguing about the cryptocurrency market and went on to become a widely viewed spectacle.
Do you agree with Roubini’s criticisms of BitMEX and the cryptocurrency market in general? Let us know your thoughts in the comments below.
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Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...
