As the Chinese government continuing to criticize the volatility and risks associate with cryptocurrency markets this year, one significant local blockchain expert has referred to crypto like Bitcoin as a Ponzi scheme.

Yifan He, CEO of Red Date Technology, the blockchain technology provider for China’s major blockchain project called the Blockchain Service Network (BSN), said in a news article published on local newspaper. The People’s Daily, calling cryptocurrencies the “biggest Ponzi scheme in human history.”

Backing his statement, Yifan He cited the death spiral of Terra network, with the native token Terra (LUNA) — now known as Luna Classic (LUNC) — crashing 99% and the algorithmic TerraUSD Classic (USTC) stablecoin losing its 1:1 peg value to the United States dollar in May 2022. He also criticized the popular virtual currency concept known as X-to-earn, referring to move-to-earn or play-to-earn projects, calling the model a “phishing strategy.”

Although he criticizes bitcoin and many other altcoin projects, He still believes that some part of the crypto market such as fiat currencies-backed stablecoins like Tether could be doing just fine if it’s properly regulated.

Red Date Technology is one of the founding companies of China’s Blockchain Service Network (BSN).

Officially launched in 2020, BSN is backed by state-owned entities. This includes the State Information Center (SIC) under China’s powerful National Development and Reform Commission (NDRC), state-backed card payment organization China UnionPay, telecom carrier China Mobile.

Unlike decentralized networks like Ethereum and Solana, which are powered by distributed ledger, communities and native tokens, There is no cryptocurrency attached to BSN’s blockchain networks since China has banned cryptocurrency-related activities citing concern over illegal financial activity and market volatility.

BSN will release its intentional version called Spartan Network on August 31, the transaction fee on the network will be paid in U.S. dollars rather than cryptocurrency like ether, the native token of Ethereum, according to He Yifan.