The Crypto Industry Celebrates Bankman-Fried's Conviction after a Year in FTX's Shadow
From crypto prodigy to convicted felon in less than a year, Sam Bankman-Fried's downfall has captivated the crypto industry, revealing its delight in his recent conviction
Sam Bankman-Fried went from being a crypto prodigy to a person with a criminal record in less than a year, much to the delight of the professionals in the industry who once hailed him as a superstar.
Bankman-Fried's cryptocurrency empire crumbled in November, causing significant setbacks to the young industry. However, for those remaining steadfast and determined in the crypto community, the conclusion of the trial couldn't come soon enough.
"After the trial's conclusion, the crypto community can finally move forward from this unfortunate chapter," stated Bobby Zagotta, the US CEO of Bitstamp, a European exchange. "SBF does not represent the entire crypto sector or our aspirations."
Throughout the majority of the previous year, the cryptocurrency industry has been striving to free itself from the dominance of FTX. Currently, there is an abundance of satisfaction among individuals who take pleasure in the misfortune of Bankman-Fried as he confronts the possibility of imprisonment.
"Yesha Yadav, a law professor and associate dean at Vanderbilt University, stated that numerous individuals within the crypto industry are thrilled. They are genuinely content to witness SBF and FTX being subjected to severe punishment."
However, it is challenging to remove the negative association with bad actors in the cryptocurrency industry, despite the growing interest of large institutional investors like BlackRock and Fidelity in bitcoin funds.
The collapse of the exchange triggered a contagion effect in the crypto market, intensifying a prolonged decline that resulted in the industry losing $2 trillion in value in 2022. Numerous companies that had exposure to FTX either declared bankruptcy or had to suspend withdrawals. Regulatory bodies stepped in, filing lawsuits against major players in the industry such as Coinbase and Binance, accusing them of selling unregistered securities. FTX customers who lost their deposits are still uncertain about whether they will be fully compensated.
Bankman-Fried's memory is indelible, defying easy erasure. His involvement in orchestrating a colossal fraud secures his position in the prestigious league of grifters, alongside the notorious figures of Bernie Madoff and Elizabeth Holmes.
However, the legal battle that follows his conviction signifies that his journey is far from over.
A second trial for five more charges, including alleged campaign-finance violations and bribery of foreign officials, is slated for March. The Justice Department will determine whether to proceed with this case. Bankman-Fried's legal team has pledged to continue their efforts to establish his innocence, laying the groundwork for a potential appeal.
In addition to FTX and Bankman-Fried, the cryptocurrency industry remains embroiled in a regulatory conflict with the Securities and Exchange Commission, led by Gary Gensler. Gensler has openly taken an antagonistic stance towards digital assets.
"There is undoubtedly a sense of 'ding-dong the witch is dead'," remarked Eric Soufer, a political advisor representing prominent crypto companies, in reference to Bankman-Fried's conviction. "However, within the crypto community ... the primary concern continues to be Gary Gensler and the SEC, and I believe this ruling does not fundamentally alter that dynamic."
