European Central Bank Calls For Crypto Crackdown, Says They’re “Based On Nothing”

In a recent Dutch television program, Christine Lagarde of the European Central Bank called for a crypto crackdown, saying that they are based on nothing and may hurt investors.

President of the European Central Bank Christine Lagarde has attacked cryptocurrencies, claiming that they are “worth nothing” because they lack underlying assets “as an anchor to safety,” and called for them to be regulated in an appearance on Dutch television.

According to Politico, Lagarde made the remarks in an appearance on the Dutch television program “College Tour,” which will air on May 22.

“I have said all along the crypto assets are highly speculative, very risky assets,” Lagarde stated on the show. “My very humble assessment is that it is worth nothing. It is based on nothing, there is no underlying assets to act as an anchor of safety.”

She also expressed concern about people wagering their life savings on cryptocurrency because they may not be aware of the risks.

According to Bloomberg, Lagarde is concerned about those “who have no understanding of the risks, who will lose it all and who will be terribly disappointed, which is why I believe that that should be regulated”.

Lagarde advocated for global regulation of Bitcoin in January, telling Reuters in an interview at the time that the digital currency had been used for money laundering and that measures to eliminate loopholes were needed.

In an interview at the Reuters Next conference, Lagarde said of Bitcoin, “is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

While Lagarde did not go into detail on the money laundering implications of cryptocurrencies, she advocated for worldwide regulation “because if there is an escape, that escape will be used,” referring to legal loopholes.

Her comments come amid recent market upheaval, with crypto markets losing over $1 trillion in value in the last six months.

The TerraUSD (UST) stablecoin, which was meant to be linked 1–1 to the US dollar but has fallen to roughly six cents as of May 21, according to CoinMarketCap, is another example of crypto woes.

Following the stunning UST drop, Securities and Exchange Commission Chairman Gary Gensler said earlier this week that he, too, is concerned that investors would be hurt in crypto markets.

“I think a lot of these tokens will fail,” Gensler said following a hearing before the House Appropriations Committee on May 18. “I fear that in crypto … there’s going to be a lot of people hurt, and that will undermine some of the confidence in markets and trust in markets writ large.”

Other prominent personalities have expressed doubts about crypto, in addition to regulators and other officials stepping up their opposition.

During a Reddit Ask Me Anything session on May 19, Microsoft co-founder Bill Gates said he hasn’t invested in crypto since it isn’t “adding to society.”

“I don’t own any,” Gates wrote. “I like investing in things that have valuable output. The value of companies is based on how they make great products. The value of crypto is just what some other person decides someone else will pay for it so not adding to society like other investments.”

Lagarde, like Gates, does not hold any cryptocurrency, stating on the College Tour that she wants to “do what I preach.”

Other ECB officials have expressed reservations about cryptocurrencies and, like Lagarde, have urged for regulation.