Bitcoin rattled by biggest crypto heist in history! Why Warren Buffett and Charlie Munger hated cryptocurrency

Synopsis

A reported $6 billion crypto heist at Binance has rattled investors and revived concerns about cryptocurrency risks. Binance said its initial investigation pointed to a compromised DevOps engineer’s laptop, which may have enabled unauthorised withdrawals. The FBI blamed North Korea for the attack, while Binance said it would cover the losses.

The $6 billion crypto heist at Binance has rattled cryptocurrency investors worldwide, reviving concerns about the risks of digital assets. The incident may also bring back memories of legendary investors Warren Buffett and Charlie Munger, who were vocal critics of cryptocurrencies.

Binance, the world’s largest cryptocurrency exchange, has faced what could be one of the biggest crypto heists in history. In a post on X, the company said its initial investigation suggested the breach may have originated from a DevOps engineer’s compromised laptop. This allegedly allowed an attacker to access a service container and submit unauthorised withdrawal transactions.

The FBI attributed the attack to North Korea, while Binance assured users that it would cover the losses arising from the incident.

Crypto TrackerTOP COINS (₹) Ethereum216,580 (0.6%)Bitcoin7,405,493 (0.22%)BNB67,087 (0.18%)Tether95 (-0.02%)XRP119 (-0.18%)Also read | Biggest crypto heist in history: How Binance’s $6 billion hack rattled markets and what it means for investors?

Warren Buffett called Bitcoin ‘rat poison’

Back in May 2018, Bitcoin was trading at a humble $9,850 when Warren Buffett was asked for his views on the digital asset. While the level seems minimal when compared to today’s, Bitcoin had seen its fair share of jump even till then. The currency had soared from $0 in 2010 to near $10,000 back then, with investors growing more and more curious about the digital asset following stellar returns.

Live Events

Buffett however didn’t mince his words while expressing his disdain for Bitcoin. It is “probably rat poison squared”, he said while speaking to CNBC at Berkshire Hathaway’s 2018 annual shareholder meeting.

In January of the same year, Buffett said he can almost certainly see a bad ending to the cryptocurrency. “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending. If I could buy a five-year put on every one of the cryptocurrencies, I would be glad to do it but I would never short a dime’s worth,” he said.

The legendary investor reiterated his bearish view on cryptocurrencies in 2021. During Berkshire Hathaway’s annual meeting, he avoided a question on Bitcoin as he did not want to get grief from everyone who is long bitcoin, relative to the few people who are short on the digital asset.

Also read | Bitcoin skyrocketed 750% since Warren Buffett called it ‘rat poison’ in 2018. Why was he cautious?

Bitcoin is useful to kidnappers and extortionists, said Charlie Munger

Charlie Munger, Berkshire’s then vice chairman and long-time Buffett collaborator, was harsher when it came to expressing his disdain for Bitcoin. During Berkshire’s 2018 meeting, he said that trading in cryptocurrencies is “just dementia.”

He also called bitcoin a “financial product invented out of thin air.” “Of course I hate the bitcoin success…I don’t welcome a currency that is so useful to kidnappers and extortionists,” he said, adding that the “whole damn development is disgusting and contrary to the interests of civilisation”.

“It’s like somebody else trading turds and you decide I can’t be left out,” he said another time. While the legendary investors was not fans of the digital asset, Bitcoin has seen a remarkable growth over the year, despite sharp upswings and downswings.

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.

Source