Several high-profile banking executives had not-so-nice things to say about initial coin offerings (ICOs) at an event in New York City this week.

Hosted by the Moscow Exchange Group, around 400 attendees were present at the forum, including central bankers and representatives of the “Big Four” accounting firms. And though a range of topics was discussed, none proved more top-of-mind than the blockchain token sector.

In line with the wider discourse on display in recent weeks, the first deputy governor of Russia’s central bank, Ksenia Yudaeva, went so far as to compare ICOs to the pyramids schemes of the 1990s that cost investors hundreds of millions of dollars.

The comments come at a time when government bodies throughout the world are investigating the blockchain use case, with some taking a heavy hand and banning token sales, while others have been more open-minded to the possible advantages of the tech.

Yudaeva, though, is not in the latter camp. She told the audience:

“They tried to attract a lot of ordinary people to get high gains from nothing, in a short period of time, but then all these people had high losses in a short period of time.”

And the negative pressure that these fundraising efforts have put on the economy is something Yudaeva, who reports directly to the Russian central bank’s governor, said she fears might happen again, stating: “We are very much afraid of this problem. We are very skeptical.”

Whatever the potential benefits of blockchain itself might be, she continued, cryptocurrencies are no longer viewed by the bank as a legitimate means of exchange.

“Our opinion is that the ruble is the only payment instrument in Russia and we think we should be extremely careful with cryptocurrencies and how they work,” she said.

The comment aligns with those made by Russian Vladimir Putin when he called cryptocurrencies “serious risks” recently. But they also stand in stark contrast to a regulated Russian clearing house agreeing to host its first sanctioned ICO just a month ago.

‘Cute’ technology

Following Yudaeva’s comments, global chief economist at Citi, Willem Buiter, went even further in his condemnation of cryptocurrencies and ICOs.

“I think that cryptocurrencies are going to meet the fate with other authorities that they have met with China’s authorities,” he said, alluding the country’s ban of token sales.

ICOs “will be cracked down upon,” Buiter said.

Buiter, like Yudaeva, also gave a nod to the potential benefits of blockchain itself, but quickly returned to disapproval with the way some people and companies are using the technology.

“Initial coin offerings are just regulatory arbitrage to avoid IPO restrictions,” he said, referring to initial public offerings on which companies raise money by selling stock shares on a regulated exchange.

Buiter concluded with a little grudging praise for ICOs, saying:

“Cute, and I admire the ingenuity – but it is pure regulatory arbitrage, and the regulators are always a couple of years behind – but they’re catching up.”

Image of Ksenia Yudaeva via Michael del Castillo for CoinDesk