I guess anyone wondering about inherent value of the Crypto currency craze just needs to look at FTX and 'SBF'.
From $32 Billion perceived wealth to $100k in little more than a few days.
QED and all that.
The FTX failure is one of latent fraud implicating centralized finance - not decentralized finance. He never had $32 billion and he certainly has much more than $100,000. It's an incredibly costly exercise for those caught up in it - but in the longer run, the FTX saga will make Bitcoin stronger. It has also acted as a wake up call for DeFi projects to double down on actual decentralization. Many of them have been found to have weaknesses and flaws in terms of the degree of actual decentralization implicated.
It has already driven self custody of Bitcoin to its highest levels - while flushing out 'paper' Bitcoin. FTX weren't actually buying or allocating any Bitcoin to customers in reality. They kept a float to provide to customers only when they withdrew BTC from the platform. My understanding is that this was fraudulent. There are platforms that operate in a similar way (Etoro) but they declare it from the outset.
Service terms and conditions explicitly state that digital currency brought onto the platform or purchased on the platform is the property of the customer. This guy took those deposits and bunged them into another company that he owns but that the customer has no connection with whatsoever. This is fraud. He's trying to squirm out from under this by suggesting that he had no idea what his other company was doing.
And while this subject has come up, it's interesting to note that while all and sundry have dissed crypto media and suggested that the mainstream media of record is unblemished, they have been found to be part of this scandal. Immediately afterwards, puff pieces appeared in the NYT, the FT, The WaPo, etc. ....that so obviously were designed to paint a completely different picture than the fraud that has taken place.
Meanwhile the top dogs of the conventional investing world (not crypto!) were shown to be doing
zero due diligence. We're talking about BlackRock, Sequoia, etc. The politicians were busy counting dollar bills - paid over by SBF to both parties (most of it in recent weeks as 'keep me out of prison' money). This has been the cost of doing business in the US for many years - nobody even hides it - it's a corrupt practice of the existing system - not of crypto. And then we had the regulators who in one case scrambled to remove photos of them meeting with SBF from twitter (if the regulator cant be transparent who can?), having met with him or his team multiple times.
In another case (Gensler and the SEC), he was busy making an example out of Kim Kardashian, refusing to meet with genuine crypto companies, prosecuting small projects that couldn't afford the legal fight when it came to securities law and meeting with SBF on multiple occasions. Of course Gensler's previous boss was the father of the CEO of Alameda Research. He's aligned with Elizabeth Warren - who is good friends with SBFs mother.
All the while, Gensler has not been providing the regulatory clarity that the industry was lobbying for, resulting in platforms like FTX gaining traction overseas and giving customers a reason to engage with offshore platforms. None of this is crypto-specific.