CEO of Russian controversial bank compares bitcoin with Ponzi scheme

Bitcoin is devoid of real consumer value and looks like a financial pyramid, the head of the Russian bank Otkrytie believes. He compared cryptocurrency to the largest Russian Ponzi scheme MMM.

Bitcoin does not deserve serious perception and analysis, since it is an asset that has no real consumer value, said Mikhail Zadornov, Chairman of the Board of Russian bank Otkritie, in an interview with Russia 24 TV channel.

“As a professional financier, I generally exclude [bitcoin] from any serious analysis, perception. There was Mavrodi and “MMM”. For me, bitcoin is a synonym for the same Ponzi scheme. This is an asset with absolutely no real consumer value, so this is just an absolute coincidence and it would seem very strange to me to perceive it as a real investment asset”.

МММ was a Russian Ponzi scheme operating in the 1990s and often called to be the largest financial pyramid in the world in the 20th century.[1][2] By different estimates from 5 to 10 million people lost their savings. Its collapse provoked public protests, some investors reportedly set themselves on fire.

Bank Otkritie faced serious troubles on 2017 and was bailed-out by the Russian Central Bank, raising questions about the central bank’s supervisory performance. In September 2017, a central bank deputy governor told Reuters that Otkritie bank had a hole in its balance sheet that could be as large as $6.9 billion.

“According to a preliminary assessment, taking into account that not all the group’s assets have been studied … the volume of extra capital the group would need is between 250 billion rubles ($4.3 billion) and 400 billion rubles ($6.9 billion),” Central bank deputy governor Vasily Pozdyshev said in an interview.

Skepticism about cryptocurrencies dominates among Russian bankers. So, in 2018, the head of VTB, Andrey Kostin, called bitcoin a “fake”, and compared miners with counterfeiters. He noted that any investment in cryptocurrency is dangerous if it is not regulated by the state. Kostin suggested that cryptocurrencies will not escape regulation by governments.

At the same time, the head of Sberbank, the largest Russian bank by the number of clients, German Gref admitted that at one time he owned bitcoins, but then sold them. However, he noted that cryptocurrencies and bitcoin pose a threat to the traditional financial system.


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