Former Israeli Prime Minister Calls Cryptocurrencies a ‘Ponzi Scheme’

Ehud Barak served as the prime minister of Israel from 1999 to 2001. These days he makes a lot of money as an investor and co-founder of startup companies in such fields as cyber espionage and cannabis. However, he seems to think that investing in cryptocurrency is less legitimate.

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Cannabis Is Legit, Bitcoin Is Not

The former prime minister was the keynote speaker at a startup event in Tel Aviv on Sunday, held by the local financial newspaper Globes. He recently became the chairman of a medical marijuana company, so he was naturally asked about the subject, which is the latest hot trend among Israeli stock investors. He acknowledged that there is a lot of hype around cannabis investments but rebuffed the suggestion that the industry has the same bubble-like characteristics of the 2017 bitcoin market.

“Blockchain is a technological-mathematical concept, an interesting and important method, and one that will have many uses. The coins — Bitcoin and others — is a Ponzi scheme. I do not believe that it will be possible to make a coin like this in the current generation and I will not invest in anything related to cryptocurrencies,” Barak stated. “Anyone who has patience and understands the depth of blockchain will find many uses, from holding sensitive medical information to contracts.”

Using Crypto as a Punching Bag

Members of the Israeli technology scene were understandably disappointed to hear such crypto-phobic statements at a startup event.

“The crypto market as a whole has become a punching bag. Such opinions, including the views of many companies in Israel, have become especially popular against the backdrop of the sharp fluctuations and devaluations in the currencies recently,” commented Ophir Gertner, founder of blockchain advisory company Smartologic. “We see that regulation is now required, as the absence of financial supervision has given cryptocurrencies a negative reputation and tarnished blockchain’s image internationally.”

Barak was also asked at the startup event about his business relationship with the Saudi royal family. Israeli media recently claimed that he was allegedly approached a few years ago by representatives of the Saudi crown prince, Mohammed bin Salman, to help secure sensitive technologies. This is a hot topic right now, as Israeli cyber companies are accused of providing the spyware used by the Saudi government to monitor the communications of murdered Saudi journalist Jamal Khashoggi. The former prime minster responded by claiming that “there is no chance that the cyber company I founded will sell technologies to dark regimes.”

Is cryptocurrency less legitimate as an investment than cannabis? Share your thoughts in the comments section below.

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