Some compared crypto’s credit crisis to the 2008 financial crisis, when many U.S. banks had bet big on risky mortgage securities. But I felt like that was giving crypto too much credit. It reminded me more of the network of “feeder funds” that collected money from investors and pushed it into Bernie Madoff’s Ponzi scheme, skimming off fees for themselves. As crypto skeptics David Gerard and Amy Castor wrote, the industry was like an inverted pyramid whose tip rested on a box of hot air—Kwon’s Ponzi scheme. When the box crumpled, the pyramid came falling down.
