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Nouriel Roubini takes on the crypto industry after the collapse of FTX

Outspoken economist Nouriel Roubini has described crypto and some of its major players as a “totally corrupt ecosystem.”

During a panel hosted by CNBC’s Dan Murphy during Abu Dhabi Finance Week on Wednesday, the New York University professor said there are “seven Cs of crypto”: “Hidden, corrupt , scammers, criminals, scammers, carnival barkers,” and finally, Binance CEO Changpeng Zhao, known as CZ, who spoke on a previous panel at the same conference.

“The lesson of the last few weeks is that these people should get out of here,” Roubini added. CNBC has reached out to Binance and Changpeng Zhao for comment.

Recent turmoil in the crypto market has seen the collapse of one of the largest crypto exchanges in the worldFTX, with the revelation of highly risky and unsustainable borrowing and lending by the company and the investment funds linked to it.

The price of bitcoins plunged below $17,000 for the first time since 2020, and some fear the contagion could spread to overthrow other major players, such as The CEO of the company has denied that.

Binance has repeatedly centered the story on FTX, with the company initially suggesting it would buy its failing rival before withdraw from the case.

“I can’t believe that CZ and Binance have a license to operate in the UAE. It is banned in the UKIt is is under investigation by the US Department of Justice for money laundering“said Roubini, nicknamed “Dr. Doom” for his earlier pessimistic forecasts, including a prediction of the real estate crash in 2007-2008.

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In September, Reuters reported that U.S. federal prosecutors in 2020 asked Binance for internal records of its anti-money laundering controls, as well as communications involving CZ.

Countries have taken different attitudes towards oversight of crypto companies as the industry has swelled in size in recent years.

After stating in a July 2021 blog that he wanted to increase his engagement with regulators, CZ led Binance to approval in Dubai and Abu Dhabiand in may has obtained regulatory approval in France, its first major European jurisdiction. On Wednesday, it announced that it had obtained new approval in Abu Dhabi to provide custodial services to business clients.

However, it is banned in the UKwas made for limit its activities in Singaporeand works through a spin-off company that has come under scrutiny, Binance USin the USA

Other countries, like indiahave sought to ban crypto trading altogether.

Ahead of Roubini’s comments in Abu Dhabi, CZ said in a separate panel that the crypto industry needs an association setting best practices and talking with regulators around the world.

He also said he saw “very significant interest” in assistance for his proposal to create a recovery fund to support crypto projects facing a liquidity crisis.

Discussing his biggest mistake, he said: “At first I would have said we could have gone a little faster, but given what happened last week, maybe that wouldn’t have happened. wasn’t a good idea. Taking things step by step is actually more important.”

In response to a question about the need to back up crypto, he said, “Crypto has actually shown extreme resilience…I think the industry will be fine.”

– CNBC’s Hannah Ward-Glenton contributed to this report.

Correction: This story has been updated to correct a quote from Nouriel Roubini.

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