[supermatt]

If they operate in regulated markets, then the regulations thereof determine their legality.

A ponzi scheme in itself isnt illegal (which is why there are so many crypto ponzi schemes) - it is when it is considered securities fraud that it becomes illegal.

The thought is that by regulating cryptocurrencies (i.e. treating it as a similar asset class as stocks, commodities, etc), such "investments" would be subject to the same rules - whether it has any real inherent value or not is irrelevant.

[DANK_YACHT]

Ponzi and pyramid schemes are illegal in many jurisdictions. It's possible to be charged with securities or commodities fraud for security-based ponzi schemes, but there are laws against such schemes outside of the securities market. E.g. https://www.azleg.gov/viewdocument/?docName=https://www.azle...

[supermatt]

I didnt mention pyramid schemes specifically because there are (usually) other laws that deal wit those (as you have pointed out). They dont apply because the very definition requires the product to NOT be what you are purchasing. When it is the nature of the product that matters, it is the respective regulation that applies. Crypto has no regulation, hence the desire to treat it as another regulated asset class, so the existing laws apply to it.