Economic guru Leon Cooperman warns that volatility-related securities are quickly destroying what he called the best financial market on the globe.

"I'd implore ... the regulators and the financial services industry to deal with the crazy instruments that have been created that are destroying the best capital market in the world," the chairman and CEO of Omega Advisors said Wednesday on CNBC's "Halftime Report."

To be sure, BlackRock Inc, the world’s biggest asset manager, urged more regulation of the so-called inverse volatility-linked products that were hammered during a stock meltdown that wiped out $4 trillion in market value worldwide on Monday.

Investors using exchange-traded products to bet on the VIX, Wall Street’s so-called fear gauge which measures expectations for near-term S&P 500 swings, were pummeled on Monday when the index posted its biggest single-day rise since August 2015, Reuters explained.

The S&P 500 plunged 4.1 percent Monday, making for almost an 8 percent drop over six trading sessions since Jan. 26 and triggering a wider sell-off in Asia and Europe. The U.S. market bounced back 1.7 percent Tuesday but remained volatile.

Cooperman blamed the worries over the VIX-related products for causing the sell-off in the market earlier this week.

The decline was "just absolutely crazy. Nothing to do with economics," he said. "The economy is performing better. Earnings are performing better," he said.

Cooperman urged regulators to crack down on these volatility-related products.

"The S&P does not deserve to trade up or down 100 points in a half hour. It's crazy. It creates casino mentality," Cooperman said.

In the wake of Monday's financial carnage, New York Fed President William Dudley has raised questions about whether some financial products tied to market volatility were well put together.

“Some of these VIX products, I think, people now are going to look at this with the benefit of hindsight and say, ‘Were these really well designed?’,” Bloomberg cited Dudley as saying. “This wasn’t that big a bump in the equity market and these products actually blew up.”