Economy

Bitcoin is 'Enron in the making': Saudi Prince Alwaleed

Bitcoin is 'Enron in the making': Saudi Prince Alwaleed”

Billionaire Saudi Prince Alwaleed bin Talal, who owns investment firm Kingdom Holding, expressed skepticism about cryptocurrencies in an interview with CNBC on 23 October, warning that bitcoin was like "Enron in the making".

Comparing the currency to the United States energy giant which collapsed in 2001 following one of the biggest accounting scandals in USA history, he said: "I just don't believe in this bitcoin thing". "Enron in the making." said the Prince.

The comparison with Enron, one of the biggest American corporations which filed for bankruptcy in 2001 after years of accounting fraud, implies that Bitcoin is a fraud that is going to burst one day.

It traded down 1.5 percent at $5,894.62 on Monday.

The billionaire investor was referring to the massive accounting fraud that took Enron, a USA energy-trading and utilities giant, into bankruptcy in late 2001.

Alwaleed said bitcoin "doesn't make sense. It's unregulated. It's not under the control of the U.S. Federal Reserve or any other central bank", he added.

Of course, to bitcoin proponents, those same criticisms are features rather than bugs.

Bitcoin trading is available in Saudi Arabia, according to exchange websites.

Prince Alwaleed, whose company invests in major US companies such as Citigroup and Twitter, said a lack of regulation made such cryptocurrencies risky.

Earlier this month, JPMorgan Chase Chief Executive Officer Jamie Dimon attacked bitcoin, calling it a "fraud".

However, JPMorgan and other financial institutions are investing in blockchain, the technology that enables bitcoin to transfer value almost instantly without a third-party intermediary.

Alwaleed told CNBC in an interview.



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