The former FTX CEO has been vilified for his role in orchestrating the fraud, however, a deeper look into the overall situation shows he actually did us a favor.
In its brief history, the Wild West of cryptocurrencies has seen no shortage of scandals, but the most recent collapse of FTX is undoubtedly the worst to have struck the sector.
The FTX collapse was a catastrophe from which some people will never be able to recover financially. Those who belong to this group might find it challenging to view it as a learning lesson. We must still take into account the benefits of this total catastrophe if the industry is to advance.
This necessitates accepting the hurt while resolving never to let what happened happen again. From now on, we should all make an effort to exercise proper due diligence, steer clear of centralized platforms whenever possible, and improve our ability to spot scams and shady scenarios. A more savvy cryptocurrency investor will emerge from this adversity.
Many reports on the business’s internal operations flooded social media forums as the scandal broke. This included information on the peculiarly drug- and sexually-fueled workplace culture as well as the inexperience of key employees who were unqualified to manage the enormous amounts of money flowing into the exchange.
FTX WTF
SBF’s character arc quickly changed from eccentric billionaire philanthropist to devil with an afro. Associates, including famous people and crypto influencers, worked incredibly hard to distance themselves from the brand after its fall from grace.
What hurts more, though, is the harm done to an industry’s reputation, which was already held in high regard by outsiders. This undoubtedly has great effect in negating the progress made towards advancing cryptocurrency as a workable and reliable TradFi substitute.
Many hail cryptocurrencies and blockchain technology as the great equalizers that will end financial inequality and corruption. Ironically, though, SBF’s leadership turned this technology into a tool for deception and manipulation.
Authorities Swarming SBF
Making matters worse, authorities now have a justification for their oppressive laws and extensive regulations.
There is widespread speculation that this was always the end result. Although this assertion is unproven, it is difficult to discount the connection given SBF’s political influence and media support.
The World Economic Forum recommended giving control of cryptocurrencies to JPMorgan and other such “responsible actors” for reasons of credibility and stewardship. Senator Elizabeth Warren recently urged regulators to take tough measures against the industry in order to protect consumers.
The SEC announced a settlement with Kraken regarding its staking program on February 9. Consequentially, the exchange would stop providing staking services to American clients and would have to pay a $30 million fine.
The “weaknesses” that allowed SBF to commit his alleged crimes, such as the use of exchange tokens and financial reporting/auditing, are not specifically targeted by this action.
The unusual “buddy-buddy” relationship between the SEC and FTX, according to cryptocurrency investor Adam Cochran, is even more suspicious in light of the Kraken incident. According to Cochran, Chair Gensler of the SEC wants to destroy the industry for personal gain.
A certain amount of closure is provided by SBF’s tardy extradition to the United States to face charges of wire fraud, securities fraud, and money laundering. However, it appears that the SEC is determined to cotinue applying using the “consumer protection” angle until their objectives are met.
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