Sam Bankman-Fried, once a crypto wunderkind, now faces a reckoning that could see him behind bars for 115 years. Convicted on seven counts of fraud, his trial showcased a classic tale of deception, with a modern twist: the misuse of cryptocurrency.
The prosecution painted Bankman-Fried as a mastermind of one of the most significant financial frauds in U.S. history. His defense hinged on the claim of mere business errors, not criminal intent. The jury didn't buy it.
Some say that the crypto industry, often seen as the Wild West of finance, is responsible for enabling SBF's crimes. This is partly true. Crypto, writ large, can be thought of as an enabling technology because the government and bank regulators allowed a fully centralized crypto exchange to operate without oversight or regulation. FTX was under the complete control of one unscrupulous criminal who committed several crimes. In practice, this has less to do with crypto than it has to do with letting a centralized bank operate without regulatory oversight.
Decentralized exchanges have their fair share of fraud, and you do hear about big crypto hacks now and again. However, decentralized exchanges generally work well because there are no central authorities controlling the platforms. (BTW, if a hack or a massive fraud ever happened at JPMC, Citi, BofA, or another large bank, you'd never hear about it – for obvious reasons.)
Notwithstanding the above, as my legal friends like to say, the SEC and several other government agencies have declared war on crypto, and they are trying very hard to burn down anything they can't control. SBF's quick conviction just fans the flames. We'll see if BTC ETFs have a positive impact on the current "crypto winter."
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P.S. Is crypto dead? No, but it is not feeling well. If you want to learn more about the potential of crypto, smart contracts, digital collectibles, and the value of the underlying technologies, please visit or consider taking our .
ABOUT SHELLY PALMER
Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications and CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named he covers tech and business for , is a regular commentator on CNN and writes a popular . He's a , and the creator of the popular, free online course, . Follow or visit .
