Key Words: Why do people invest in crypto? ‘It’s partly fraud and partly delusion,’ says Charlie Munger.

“The country did not need a currency that’s good for kidnappers.”


— Charlie Munger

Charlie Munger, vice chairman of Berkshire Hathaway
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,
is not a big fan of crypto, and he shared some frank thoughts about it in the wake of the FTX bankruptcy filing.

See also: Bitcoin in your 401(k)? Senators intensify pressure on Fidelity to reconsider crypto in retirement plans

“It pains me that in my own country I see people that were once regarded as very reputable people helping this thing exist, promoting [its] use and so forth,” he said in a CNBC interview that aired in November. “This is a very bad thing.”

Munger spoke to CNBC in the days after the financial collapse of the crypto firm FTX and after its founder, Sam Bankman-Fried, stepped down as CEO of the company.

See also: Tom Brady, Steph Curry and Kevin O’Leary set to lose big from FTX bankruptcy filing

So why do good people make poor investment decisions? Munger believes they’re influenced by a combination of factors.

“It’s partly fraud and partly delusion,” Munger said. “That’s a bad combination.”

He added: “There are people who think they’ve just got to be in on every deal that’s hot. … I think it’s totally crazy.”

See also: Coinbase faces ‘increased uncertainty and risks’ from FTX fallout, says analyst

Munger and Berkshire Hathaway CEO Warren Buffett have been crypto critics in recent years — and Munger has been a vocal critic of bitcoin
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+3.37%

specifically.

“When you have your own retirement account and your retirement adviser suggests you put all your money in bitcoin, just say no,” Munger said at Berkshire Hathaway’s annual meeting in April. He later called the digital assets “stupid” and “evil.”

FTX paused withdrawals in November amid a multibillion-dollar liquidity crisis. Rival crypto exchange Binance had announced interest in an FTX takeover prior to the bankruptcy filing but opted against the move and later called the company’s financial issues “beyond our control or ability to help.”

Bankman-Fried saw his net worth plummet by billions of dollars after his company’s collapse. Financial groups that had backed FTX include Third Point Ventures, Tiger Global, Sequoia CapitalSoftBank
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-0.15%

 and BlackRock
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.

In November, the House Financial Services Committee announced it plans to conduct a hearing on the collapse of FTX and it “expects to hear from the companies and individuals involved, including Sam Bankman-Fried.”

Bitcoin’s
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+3.37%

 price is down over 70% over the past year, and the price for ether
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+3.10%

 is also down over 70% over the same period.

This post was originally published on MarketWatch

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