Cornell professor: Misleading promises and hype exacerbate risks of cryptocurrencies

Eswar Prasad, a professor at the Dyson School at Cornell University and a senior fellow at the Brookings Institution, expressed great concern about the risks posed by the booming cryptocurrency market in an opinion article published in the New York Times.
Despite Bitcoin's recent surge to record highs and political support from figures such as former U.S. President Donald Trump and current Vice President Kamala Harris, Eswar Prasad warned that cryptocurrencies today pose greater risks to investors and financial institutions than before. He noted that the relaxation of regulations by the U.S. Securities and Exchange Commission (SEC) has made it easier for retail investors to enter the cryptocurrency market, but they often do not fully understand the risks involved.
Eswar Prasad further highlighted the dangers of centralization in the crypto ecosystem, pointing to the collapse of FTX and Binance’s legal disputes as examples of how centralized power can undermine the fundamental principles of decentralized finance. He also stressed that “risks could spread from decentralized finance to traditional finance and vice versa,” creating vulnerabilities for the entire financial system.