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The Wild West of cryptocurrencies has had no shortage of scandals in its short history, but the recent collapse of FTX is one of the worst to afflict the industry.
For some, the fall of FTX was a financially irreversible disaster. Those who fall into this camp may find it difficult to accept it as a learning experience. Nonetheless, for the industry to move forward, it must consider the benefits to be gained from this unmitigated disaster.
This requires us to absorb the pain with the determination to never repeat what happened. You should try to sharpen it. Out of this adversity, more shrewd cryptocurrency investors will emerge.
When the scandal erupted, social media was inundated with reports about the inner workings of the business. This included details about the bizarre, sexual, drug-fueled corporate culture and the inexperience of unqualified key personnel handling the huge sums that flowed into the exchange.
Even stranger was the period after his resignation when the mainstream media (MSM) endorsed the SBF in a futile attempt to convince readers that 2 + 2 = 5.
In a short space of time, SBF’s character arc went from eccentric billionaire philanthropist to Afro-wearing devil. The downfall has left stakeholders, including celebrities and cryptocurrency influencers, struggling to distance themselves from brands.
But even more poignant is the reputational damage to an industry already viewed with deep suspicion by outsiders. The good work done to advance cryptocurrencies as a viable and credible alternative to TradFi is temporarily set back.
Blockchain and cryptocurrencies were supposed to be great equalizers to solve economic inequality and corruption. Ironically, however, with the SBF at its helm, the technology has become a vehicle for carrying out fraud and manipulation.
To make matters worse, authorities now have the pretext they need to justify heavy-handed policies and extensive regulation.
Speculation runs rampant that this was always the end goal. This claim has not been verified, but given the SBF’s political pressure and MSM’s endorsement, it is difficult to dismiss the link outright.
The World Economic Forum said it should entrust control of cryptocurrencies to JP Morgan and other responsible actors for credible stewardship.Similarly, Senator Elizabeth Warren recently called on regulators to tighten up on the industry to protect consumers.
February 9th, SEC It said it had reached a settlement with Kraken regarding its staking program. As a result, the exchange will terminate its staking service to US customers and pay a fine of $30 million.
The action did not specifically target areas such as exchange tokens and financial reporting/auditing, which are “weak spots” that would allow the SBF to carry out the alleged crimes.
crypto investor Adam Cochrane The unusual “sidekick” relationship between the SEC and FTX was even more questionable following Kraken’s actions, Cochran argued that the SEC, under Gensler, had an ulterior motive to crush the industry.
Gensler is not a regulator. He is an agent of the anti-cryptocurrency agenda and only intends to use his power as a cudgel against those he disagrees with.
The big question, then, is why didn’t FTX get this treatment?
whose pocket is he in?
Delays in extradition of SBF to the United States to face charges of wire fraud, securities fraud, and money laundering have brought some closure. But the SEC seems to continue to milk the “consumer protection” line until the agenda is complete.
Discussing the collapse recently on the Bankless Podcast, ShapeShift CEO Erik Voorhees said that people’s reliance on systems to protect themselves is a “sickness of society.” He said no one was happy with the slimy politicians or their actions, but many hoped the political process would bring about change for the better.
For years I have lamented that people, in principle, look to the state for protection. It’s like a new form of religion that appeals to what we call governments and governments.”
Voorhees said SBF was a champion of that world, often praising its engagement with the system. Voorhees, by contrast, see themselves as true capitalists who believe that free markets can solve problems better than coercive government.
“Most people who saw this would have admired Sam for working within the system and for being an upstanding citizen here. And Eric is a radical extremist.”
The biggest boon the SBF has done has been to shed light on the fallacy that governments and higher authorities, including the SEC, know what is best for us. As Voorhees put it, “our salvation lies in open source immutable code, not in blessings and anointings from DC.”
Recent events have shown that the “system” does not represent freedom, democracy, and individual sovereignty. Instead, these words are bastards to the point that they make no sense when uttered by agents of the system.
Ultimately, SBF showed that only you know what’s best for you, not slimy politicians or “effective altruists.” It’s a shame we had to steal billions of dollars to figure this out.
