My own translation of Nouriel Roubini testimony for the Hearing of the US Senate Committee on Banking, Housing and Community Affairs

I decided to translate Dr. Nouriel Roubini testimony first of all for myself to form my own understanding that I used to have. Nevertheless, my aunt that, I’m sure, doesn’t descend anyone in predicting crises, I found out a lot of common in Roubini testimony to my understanding that is so far hidden behind the different form and wording.

The key message that Roubini says is that “Crypto is a scam!”. Particularly he used “Crypto is the Mother of All Scams and (Now Busted) Bubbles”.

I totally agree that the message “You can build your own currency!” is pure scam. In fact, most people cannot do that. 100% in all ICO cases I have reviewed and I understood the same result gained by Dr. Roubini, ICO is a scam. It is not necessary that scammers are running the ICO, but the issue is that ICO based startups believe they are welcome to collect money from backers in return nothing. ICO “entrepreneurs” were and are convinced that they can do ICO and they can collect money just for having an idea and that is the origin of the scam.

Every tricking always has a mix of true attributes with deceptive interpretation, to build new “trusted understanding” and build a scam on top of that. Like: “If you are using a bus every day, you know how the bus is driven, you can drive the bus”.

Dr. Roubini is his testimony criticise the scam schema and scam attributes to disclose the scam itself. Some of those attributes in their origin are totally true but used in scam building schema. Like in my previous example if some would say that I am not using a bus every day, I would oppose that I do, because the truth is that I am using a bus almost every day. Just critic would be saying that I am not using a bus as a driver and that is why I, most probably, cannot drive a bus. While my perception would be slightly different and those tiny differences lie in the background of manipulations.

To understand Dr. Roubini testimony I will repeat what is said by Dr. Roubini just using manipulation development templates.

As very well senator Jons pointed out (in the hearing), criminals are steps ahead emerging technologies.

So what I can see in ICO case, there is the core scam schema, that is built on the sequence of messages:

1) you can issue your currency (yes, technically you can )

2) you can transfer your currency to another account (yes, technically you can )

3) it opens a way to build new financial system (no, it does not, that is a deceptive statement),

4) now go, collect funds through ICO, you can do it, it’s working (that’s the scam).

Criminals made people believe that they really can issue their own currency. They made them believe that raising money through ICO is a good thing and that raisers deserve millions they raised just because they have a good idea.

I guess that Dr. Roubini met numbers of ICO fundraisers who had only one goal “to raise money”. In fact, that is the natural scam by itself. I’ve met those as well. To my question “why people are backing you”, I’ve got a simple answer, “because they have enough money”.

ICO raisers I have met felt so innocent that they even did not presume they were making criminal actions. They explained, “We are raising because everyone is raising!”. Not because they would have a really good business plan how to return money for investors, but just because it is popular to go with ICO to raise nice, easy money to buy a Ferrari if you succeed.

The point here is that a number of people believed and still believe that raising ICO funds is equal to high achievement and success not to liabilities. My translation from Dr. Roubini message is that “those who made them believe on that are real scammers”.

Scammers are posting a lot of prepaid, independent like topics in media telling people around the world that cryptocurrency is good, secure, world-changing, a new way Fintech. Scammers stuck round the hidden message “go and collect money from “stupid people” because you are smart one”. That is the simple way how criminals convince others for the crime for their own benefits.

Dr. Roubini is saying in his testimony that all the messages around the cryptocurrency are a scam. Dr. Roubini especially pointed out that Fintech and Fintech disruptors who succeed, are a good thing, but connecting Fintech achievements to Cryptocurrency is deceptive.

The scammers manipulation is CryptoCurrency + Transfer = FinTech + fast and cheap transfer. In fact, it is not equal and that is Dr. Roubini’s message. His obvious message is that Cryptocurrency is not used in any Fintech disruptor and that is true.

His message as well is that current cryptocurrency technologies cannot be used in Fintech because those are not trustable and it is better to trust authorized technology providers. There is some miswording and might be some misinterpretation of what is said or what was an intention to say.

I believe that Dr. Roubini trust feds even less than I do. The message from Dr. Roubini is that technology wise there is no reason at all to use blockchain in Fintech instead of using other technologies. In his testimony, he is saying (by my translation) that the message that “cryptocurrency and blockchain technology is an innovative technology is Fintech” is a pure scam.

I am working almost 20 years in FinTech as the leader of the top technical team and I can endorse the statement that today blockchain and cryptocurrency has nothing to do in Fintech except of some researches. Relating Cryptocurrency to FinTech is as a proven connection is a scam.

I do not write off technology in its future as well I believe Dr. Roubini does not. It might be a subject for innovation and might be financed research. So far the technology is not proven yet and collecting money in the promise to build a business on not proven technology is pure scam. That is Dr. Roubini message.

The next deceptive message is that Cryptocurrency is good because it is secure. Definitely, it is not for the ordinary user. What is a nonsense? You can buy a cryptocurrency in several clicks but will lose it all if you mobile will fall into the water and you will not have a proper copy of your key. “What key?”

Technically, as the copy of Bitcoin technology, the cryptocurrency technology is secure if you are a really good technician, but fails of crypto exchanges proof opposite. Bitcoin is secure and will remain secure because Bitcoin has own, dark economic and in fact does not need to be in exchange despite money laundering. But other cryptocurrencies must be in exchange for their value, therefore, they are absolutely opposite to secure currencies.

It is the same game like in my example with the bus driver. Bitcoin is using that technology, but it doesn’t mean other cryptocurrencies can do the same. When we are in the bus, the driver is using a bus, and we are using a bus, and we all together are driving somewhere. But it doesn’t mean that any of us can drive the bus.

Therefore Dr. Roubini statement is that proclaiming any cryptocurrency is secure is a scam. Dr. Roubini also says that one-day cryptocurrency owners may lose all the cryptocurrencies and that risk is true.

Dr. Roubini said that blockchain “Is The Most Over-Hyped Technology Ever”. I believe that Dr. Roubini message is not against a technology itself, but against the way the technology is presented to build the scam. Cryptocurrency presenters are jumping between their messages due to not catch them on the scam. Dr. Roubini is saying that cryptocurrency is not secure. Scammers “Bitcoin is secure”. Dr. Roubini says “but it is not scalable”. Scammers: “we are building more scalable”. Dr. Roubini: “but new, more scalable, is not secure”. Scammers, “but Bitcoin is secure”. That’s a kiddy game.

Cryptocurrency enthusiast can believe on what they want, they can collect as many money as they can still they are not cheating people. “Cryptocurrency values dropped by 95%”. What?, What values? Cryptocurrency basement, the technology is not working yet, but we already are talking about cryptocurrency values, returns on investments, promises of a nice future. The fact that currencies are listed in cryptoexanges is the scam by itself. Arguments that cyrpotexanges are or can be regulated are deceptive and tends to lead off the core issue that crypto is based on not proven technology with the actual risk that all big part and even all assets might be stolen. That is Dr. Roubini message in my translation.