Enthusiastic traders are not the only ones who get liquidated on BitMEX. The bitcoin futures trading exchange demolished Facebook in an op-ed by BitMEX CEO Arthur Hayes and a “research” article that shows how its upcoming cryptocurrency is really a traditional financial instrument in disguise.

Hayes wrote his thoughts out in a piece entitled, “Zuck Me Gently,” which argued Libra simply isn’t a cryptocurrency but something that might destroy all stablecoins–which he thinks will be a good thing.

“Why trust a few crusty old men and women to manage the monetary health of the global economy. Let’s trust Zuck!” he proclaimed. But while the articles are meant for entertaining purposes, there are some astute conclusions that are worth taking a note of.

Hayes states that Facebook is essentially an alternative central bank—one whose very existence is threatening the power of the state, leading lawmakers to call for it to be halted in its tracks. But, he writes, this is a good thing.

“The speed at which government officials rushed to admonish Libra tells you there is some potential positive value to human society embedded in the project,” said Hayes.

Join Daily Debrief

Want the best of crypto news straight into your inbox? Sign up to Debrief.

Join Daily Debrief

Or

His argument is that Libra is not a threat to financial privacy—that is already long gone. Rather, it’s a boon because it encourages people to consider that alternative financial ecosystems could exist—and perhaps, should exist.

“Libra and the conversations it sparked, is the best news for Bitcoin,” Hayes said, adding, “Two billion people will now embrace [crypto] and [subsequently] be frightened of a corporate overlord controlling their financial wellbeing. Curiosity is the best food for the Bitcoin bull market.”

This positive message aside, BitMEX’s research article takes more of a thoughtful swing at Libra, concluding it’s just a mediocre attempt at building an investment tool.

The research article focused on the plan for Libra to involve two cryptocurrencies. One, backed by a basket of underlying “assets” and a governance token, which pays out rewards, or profits. BitMEX highlighted that this is almost identical to an electronic trading fund, or “ETF,” a financial instrument that pays out interest from a basket of assets.

In the crypto space, the term ETF has become synonymous with a bitcoin ETF—where institutional traders can buy and sell large amounts of bitcoin in one go. Something the SEC has poured cold water on, mostly. However, BitMEX felt Facebook’s version is more akin to one of Blackrock’s ETFs.

The research article, which analysed the two investment vehicles—in as far as it could without all the details known on Facebook’s side—found that Libra did not stack up all to well against the traditional ETF.

“The analysis also highlights that Libra may suffer from unnecessary complexity with respect to portfolio management,” it stated, taking a dig at the 28 partners who will be running the network, a number expected to grow to 100 by the time of launch. It argued that, in contrast, the Blackrock ETF has just one mandate.

BitMEX added, “Perhaps the most significant disadvantage of the Libra product, is that unit holders do not appear to be entitled to receive the investment income.”

While a traditional ETF has a committed return on investment, Libra appears to be much more laissez-faire about much money is there to be made–despite Facebook asking partners to stump up $10 million just to get involved.

It even suggested that Libra may abandon being a cryptocurrency at all. The current intention is for Libra to use cryptography to create pseudonymous addresses for its users, much like bitcoin does. However, the paper argues that there will be a choice between complying with money-laundering law and terrorist financing laws—which will result in it removing all traces of cryptography, making it no longer a cryptocurrency.

It concluded that, if its fears are met, Libra will be, “nothing more than a high fee ETF.”

And if that happens, the SEC might just go ahead and ban it anyway.