JPMorgan Chase & Co. CEO Jamie Dimon, who runs the nation's largest bank, has been candid in his thoughts about a key trend in finance.
Dimon is a persistent critic of cryptocurrences, as he made clear again in testimony on Capitol Hill last month.
Cryptocurrencies "are decentralized Ponzi schemes, and the notion that’s good for anybody is unbelievable,” Dimon told lawmakers in Washington Sept. 21.
Dimon was not referring to some of the tokens that have been hyped by celebrities.
No, when Dimon called them ponzi schemes, he was talking about major cryptos such as Bitcoin. And he thinks cryptos are still being used for illegal practices such as sex trafficking and money laundering.
However, while Dimon has been a critic of crypto, he does believe in blockchain technology and has said he doesn't see anything wrong with a properly regulated stablecoin.
A Crypto Policy Director Is Hired
And, like them or not, cryptocurrencies have endured volatile trading, surviving hacks and even bankruptcies of some companies.
With crypto drawing increasing attention from Congress and banking authorities, JPMorgan announced on Oct. 19 it has hired a new executive director of digital assets regulatory policy.
I'a new position at JPMorgan, as the company wants to beef up its crypto policy team while regulatory pressure heats up and the value of the currencies face declines.
The new director is former Celsius executive Aaron Iovine. His role at Celsius was as head of policy and regulatory affairs. He left Celsius in September after eight months on the job. Celsius had filed for bankruptcy in July as monetary policy tightening hurt crypto values.
Some Celebrities Are Criticized
In May, Kim Kardashian posted about a project called Ethereum Max as it paid her to promote their token on Instagram to her 228 million followers.
The post read, "Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token! A few minutes ago Ethereum Max burned 400 trillion tokens--literally 50% of their admin wallet, giving back to the entire e-max community. Swipe up to join the e-max community.”
The promotion was blasted in the media and from a number of other sources as well. Criticism generally referred to the difference between promoting a risky currency that could do real damage to an individual or a family's finances as compared to doing commercials selling ice cream or shoes.
Kardashian ultimately had to pay the Securities and Exchange Commission a $1 million fine.
Ethereum Max has also had the benefit of publicity from Paul Pierce, who plays basketball for the Boston Celtics and boxer Floyd Mayweather.
Connor McGregor, the UFC fighter, has partnered with Tiger.Trade, an application for trading cryptocurrency. The deal partially requires McGregor to participate in a game that users can join and compete in for prizes.
Crypto enthusiasts such as Matt Damon, Reese Witherspoon and Gwyneth Paltrow have also experienced criticism for promoting virtual currency without emphasizing the risks involved.
One Oscar winner who has faced criticism for involvement with crypto is Witherspoon. She hasn't been reported to be taking money to promote the currency, but her social media activity has taken some heat for her enthusiasm about the future of crypto.
