45th richest man in the world warns Bitcoin is the next Enron

Bitcoin is expected to “implode” like Enron one day, Saudi Arabia’s billionaire investor Prince Alwaleed bin Talal said quoted by CNBC.

“It just doesn’t make sense. This thing is not regulated, it’s not under control, it’s not under the supervision” of any central bank, Alwaleed said in a CNBC interview.

The Enron allusion is particularly contentious. Enron was an American energy and commodities giant which in 2001 went bankrupt after a spectacular financial scandal. After for six consecutive years it won Forbes’ “America’s Most Innovative Company” title, it became clear it had continuously misreported its financial results, concealing a shaky financial situation.

Prince Alwaleed bin Talal’s words follow Bitcoin price’s steep climb which almost doubled in a month.

He echoes the likes of JPMorgan Chase’s CEO Jamie Dimon who in September called Bitcoin a “fraud”.

Meanwhile, Jordan Belfort, whose life story became the premises of the movie “The Wold of Wall Street”, called initial coin offerings (ICOs) “the biggest scam ever”.

Belfort spent 22 months in prison for security fraud, scamming investors with reportedly over $200 million.

ICOs are one of the main drivers behind Bitoin’s and other cryptocurrencies’ massive growth in the past months.

A new mechanism for companies to raise funds by selling crypto-money known as “tokens”, ICOs have turned into the latest financial craze. Data of Coinschedule.com shows that businesses have raised an estimated 3.25 billion in 203 ICOs only in 2017. The amount compares to 96.4 million in 2016. Volumes in September 2017 were at all-time-high worth almost $663 million, according to CoinDesk. Coinschedule September estimates are even higher, at more than $800 million.

This and other factors, including favorable trading and regulatory environment in Asia, have helped Bitcoin surge past the $6,000 mark before settling back to $5,646 per coin at the time of writing.

Prince Alwaleed bin Talal’s and others’ claims, be it somewhat extreme, make sense from an investor perspective. Bitcoin’s price chart doesn’t fit any financial security performance. In addition, their speculative, volatile and unregulated nature make them prone to all sorts of shady schemes.

Even the most aggressive investment advisor wouldn’t recommend putting more than only a tiny fraction in a crypto-assets if they have your best interest at heart.

Numerous financial regulators around the world have warned against potential risks surrounding ICOs. In September, the US Securities and Exchange Commission (SEC) charged several business people in the USA for “defrauding investors”. Among them was Maksim Zaslavskiy and his companies for selling coins allegedly backed up with real estate and diamonds which did not exist.

Yet, the underlying infrastructure of those cryptocurrencies, the blockchain, is a revolutionary tech phenomenon fascinating even the most conservative organizations like the banks.

For what we know, Bitcion and the other top cryptos are here to stay and continue to disrupt the financial industry.

According to Forbes, Prince Alwaleed bin Talal is the richest man in Saudi Arabia with a net worth of $17.7 billion. His investments include shares in companies like Twitter, Lyft, Citigroup, Four Seasons Hotels & Resorts, the Savoy Hotel in London and others.