Former FTX co-founder Sam Bankman-Fried has been convicted on seven counts of fraud and cash laundering, marking a major flip within the cryptocurrency business’s quest for legitimacy. The conviction, which passed off on November 2, 2023, has left traders like Alfred Lin of Sequoia Capital expressing emotions of being intentionally misled.
The downfall of Bankman-Fried is a pointy distinction to his once-celebrated standing within the finance world. Since 2009, regardless of the crypto business’s challenges with illicit buying and selling and enterprise failures, figures like Bankman-Fried had been seen as potential harbingers of legitimacy. His ventures attracted heavyweight backers corresponding to Tiger World, Singapore’s Temasek, and the Ontario Academics’ Pension Plan.
The collapse of FTX in 2022 was a major blow to the business, resulting in a disaster that noticed main cryptocurrencies like bitcoin and ether lose over half their worth. This occasion was a part of a sequence of failures which included Terraform Labs and Three Arrows Capital. In response to those upheavals, 2023 noticed a rise in oversight from lawmakers and regulators aiming to stabilize the sector.
With Bankman-Fried now going through a doable prolonged jail time period, discussions are underway about what the longer term holds for cryptocurrency. The business would possibly proceed striving for acceptance inside mainstream finance or may revert to its earlier picture as a distinct segment market.
FTX had beforehand secured high-profile endorsements, together with these from Main League Baseball and actor Larry David. The case in opposition to Bankman-Fried has drawn feedback from varied authorized and monetary specialists, together with US legal professional Damian Williams and John Reed Stark of the SEC. Moreover, Charley Cooper, former CFTC chief, and Charles Storry from Phuture have weighed in on the implications for the crypto business.
The broader crypto panorama continues to evolve with blended developments. Whereas Prime Minister Philip Davis had supported FTX earlier than its downfall, main exchanges like Coinbase (NASDAQ:) and Binance are actually going through authorized challenges from the SEC and CFTC. In the meantime, PayPal (NASDAQ:) has launched a US dollar-pegged crypto token, and BlackRock (NYSE:) is searching for SEC approval for a bitcoin ETF—a kind of product that SEC chair Gary Gensler has up to now resisted approving.
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