In FTX listening to, ‘The OC’ actor Schenkkan rips cryptocurrency as ‘largest Ponzi scheme in historical past’

In FTX listening to, ‘The OC’ actor Schenkkan rips cryptocurrency as ‘largest Ponzi scheme in historical past’

Outspoken cryptocurrency critic and actor Ben McKenzie Schenkkan advised Senate lawmakers the digital foreign money trade is a large “Ponzi scheme” and a “fraud” Wednesday throughout a listening to on the collapse of FTX. 

Schenkkan, who has starred in roles for “The O.C.,” “Southland” and “Gotham,” appeared as an professional witness on a panel earlier than the Senate Banking, Housing, and City Affairs Committee. He holds an undergraduate economics diploma and has beforehand partnered with journalist Jacob Silverman to criticize different celebrities who’ve endorsed cryptocurrencies, accusing them of “shilling” and contributing to a “ethical catastrophe.” 

Committee members are probing how cryptocurrency ought to be regulated within the wake of crypto change FTX’s chapter and the prison fees filed in opposition to its founder, Sam Bankman-Fried. Schenkkan in contrast Bankman-Fried to notorious monetary fraudster Bernie Madoff, noting that Madoff ripped off about 37,000 shoppers. FTX claimed a buyer base that’s 32 occasions bigger within the U.S. alone, he mentioned.    

“In line with FTX, some 1.2 million retail merchants, a.okay.a. common of us, and 5 million worldwide, have misplaced entry to the cash they entrusted to FTX. It’s unclear when, if ever, they may get any of that cash again,” Schenkkan mentioned.

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In FTX listening to, ‘The OC’ actor Schenkkan rips cryptocurrency as ‘largest Ponzi scheme in historical past’

Actor and writer Ben McKenzie Schenkkan testifies earlier than the Senate Banking, Housing, and City Affairs Committee on Dec. 14, 2022, on Capitol Hill. (Alex Wong/Getty Pictures / Getty Pictures)

Referring to FTX clients as “traders,” he mentioned the estimated 40 million People who’ve invested in cryptocurrency “have been offered a invoice of products.” 

“They’ve been lied to in methods each huge and small, by a as soon as seemingly mighty crypto trade whose whole existence actually is determined by misinformation, hype, and sure, fraud,” Schenkkan asserted. 

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SBF is led into a car

Samuel Bankman-Fried leaves Justice of the Peace Courtroom, Nassau Bahamas, on Tuesday. The FTX founder is charged with eight counts of conspiracy and fraud of traders, in accordance with Tuesday’s indictment. (Mega for Fox Information Digital / Fox Information)

“Cryptocurrencies aren’t currencies by any cheap financial definition,” he continued. “Even anybody with even an undergraduate diploma in economics similar to myself can let you know that cash serves three features. Medium of change, unit of account and retailer worth. Cryptocurrencies can’t do any of the three effectively, and so they haven’t any hope of ever doing so.” 

The actor advised lawmakers that digital foreign money belongings are extra akin to funding securities and disputed their worth as such. He mentioned crypto provides “no general worth to our economic system or every other” and in contrast shopping for and promoting digital cash to playing. 

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In my view, the cryptocurrency trade represents the most important Ponzi scheme in historical past. Actually, by the point the mud settles, crypto could effectively symbolize a fraud at the very least 10 occasions greater than Madoff. The truth that it has roped in tens of hundreds of thousands of People from all walks of life, in addition to a whole lot of hundreds of thousands of individuals worldwide, ought to be of concern to us all,” Schenkkan mentioned. 

The listening to, titled, “Crypto Crash: Why the FTX Bubble Burst and the Hurt to Customers,” additionally featured testimony from investor and “Shark Tank” panelist Kevin O’Leary, who invested practically $15 million in FTX; Professor Hilary Allen of American College Faculty of Legislation; and Jennifer Shulp, director of economic regulation research on the libertarian Cato Institute’s Heart for Financial and Monetary Options

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Lawmakers on either side of the aisle appeared able to crack down on the cryptocurrency trade with new laws, however there was disagreement on the worth of the expertise. Republicans, typically, mentioned blockchain applied sciences maintain unbelievable promise and wished to prosecute fraud with out banning the expertise. Democrats expressed way more skepticism over cryptocurrency and questioned the worth of digital belongings within the first place. 

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