Most Crypto Companies Will “Collapse” After Years Of Industry Ponzi Schemes: Palantir Co-Founders

More crypto companies will fall into bankruptcy under a Ponzi scheme, but cryptocurrency will remain a crucial tool for exchange funds worldwide, a venture capitalist told Fox News.

“Overall, I think most things are going to crash,” said Joe Lonsdale, an investor and co-founder of software company Palantir. Various crypto lenders, crypto tokens, and other parts of the ecosystem were “a Ponzi scheme and it didn’t make any sense at all.”

“That’s what you would expect in any situation where you have things that aren’t regulated,” he added.

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In recent years, crypto projects “have not been valued based on cash flows, not based on how much value it creates in the economy, but based on what people would pay for them,” Lonsdale said.

FTX founder Sam Bankman-Fried is facing an onslaught of legal action for his involvement in the collapse of FTX.
(Jeenah Moon/Bloomberg via Getty Images)

FTX, a Bahamas-based crypto exchange, filed for Chapter 11 bankruptcy in early November after reportedly losing at least $1 billion.

Another major crypto company, BlockFi, also filed for bankruptcy last week after following other crypto companies like Celsius Network and Voyager Digital into Chapter 11 proceedings.

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Some companies that have filed for bankruptcy “had a lot of corruption,” Lonsdale said, though he only named FTX. “Long term, there’s a good chunk of crypto, but most of what we’ve seen in crypto over the past three, four, five years has been a speculative bubble fueled by cheap money and a lot of these Ponzi schemes.”

Palantir co-founder Joe Lonsdale believes that crypto still has a strong future despite the industry facing a string of corporate failures.
(Fox News Digital/Jon Michael Raasch)

Despite the recent turmoil in the cryptocurrency markets, crypto-based technologies will continue to develop capabilities, according to Lonsdale. The blockchain technology used in cryptocurrencies makes it possible to move funds online without using traditional government or banking infrastructure and enables a new and important way to move money around the world, Lonsdale said.

“It makes sense to have more decentralized power and that something like Bitcoin exists,” he said. “It has helped people get money out of Russia, out of Venezuela, out of China.”

“It allows the financial system more freedom from really bad acting governments,” Lonsdale continued.

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Blockchain technology will continue to be an important part of the future, the venture capitalist said.

“I think this ecosystem will prove useful to the world in the long term,” he said. “But that’s not all we’re seeing right now.”

To see the full interview with Joe Lonsdale on the future of crypto, click here.

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