““The country did not need a currency that’s good for kidnappers.””
— Charlie Munger
“It pains me that in my own country I see people that were once regarded as very reputable people helping this thing exist, promoting [its] use and so forth,” he said in a CNBC interview that aired in November. “This is a very bad thing.”
Munger spoke to CNBC in the days after the financial collapse of the crypto firm FTX and after its founder, Sam Bankman-Fried, stepped down as CEO of the company.
So why do good people make poor investment decisions? Munger believes they’re influenced by a combination of factors.
“It’s partly fraud and partly delusion,” Munger said. “That’s a bad combination.”
He added: “There are people who think they’ve just got to be in on every deal that’s hot. … I think it’s totally crazy.”
“When you have your own retirement account and your retirement adviser suggests you put all your money in bitcoin, just say no,” Munger said at Berkshire Hathaway’s annual meeting in April. He later called the digital assets “stupid” and “evil.”
FTX paused withdrawals in November amid a multibillion-dollar liquidity crisis. Rival crypto exchange Binance had announced interest in an FTX takeover prior to the bankruptcy filing but opted against the move and later called the company’s financial issues “beyond our control or ability to help.”
Bankman-Fried saw his net worth plummet by billions of dollars after his company’s collapse. Financial groups that had backed FTX include Third Point Ventures, Tiger Global, Sequoia Capital, SoftBank
In November, the House Financial Services Committee announced it plans to conduct a hearing on the collapse of FTX and it “expects to hear from the companies and individuals involved, including Sam Bankman-Fried.”