On last night’s episode of “Last Week Tonight with John Oliver,” Oliver discussed cryptocurrency, specifically three of the biggest companies that have collapsed over the past year, including Terra, Celsius, and FTX.
Click the video embeds below to watch some of the highlights from last night’s show.
Oliver started off by giving a little bit of a background on cryptocurrency, and how the business generally works.
Oliver first explored Terra, a cryptocurrency launched in 2008. He looked at how even the founder of the company, Do Kwon, admitted to the volatility of the crypto space.
The way Terra worked was through making a stablecoin, guaranteeing that one unit of Terra would always equal $1. Though the company’s business model to do so was “absurd,” Oliver said.
Oliver continued the segment by talking about crypto banks, specifically Celsius, and how the crypto bank would try and sway people away from using traditional banks because traditional “banks are not your friends.”
When Celsius eventually collapsed, their customers got hurt. In the company’s terms of use, when customers deposited their crypto assets in a Celsius account, they transferred all rights of ownership to the company. Oliver noted that even though traditional banks might not be your friend, Celsius “may actually be your enemy.”
Lastly, Oliver looked at FTX, a cryptocurrency exchange that made trading crypto look easy, though in hindsight, the way the company advertised presented many red flags.
After FTX collapsed as well, the new CEO of the company described how poorly everything was run.
Even as each of the three companies collapsed, Oliver said that each person behind them still tried to get out of it.
Lastly, as Oliver admitted he usually views regulation as a solution, in this instance with cryptocurrency, he doesn’t think it’s a good idea. The danger, he said, is that regulation might give the crypto sector “more legitimacy,” making risky investments seem safer and encouraging more institutions to invest in crypto.