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It took Sam Bankman-Fried just under a year to go from cryptocurrency wunderkind to convicted criminal.
No one is happier about it than the industry professionals who made him, for a time, a rock star.
When the Bankman-Fried crypto empire collapsed Last November, it set the fledgling industry back years. For cryptocurrency faithful still standing and struggling, the ordeal couldn't end soon enough.
“With the conclusion of the trial, the crypto community can begin to turn the page on this unfortunate chapter,” said Bobby Zagotta, US CEO of Bitstamp, a Europe-based exchange. “SBF…does not define the crypto sector or what we aim to achieve.”
For much of the past year, cryptocurrencies have been struggling to emerge from FTX's shadow, and there is no shortage of schadenfreude now that Bankman-Fried faces a prison sentence.
“Many people in the crypto industry are delighted,” said Yesha Yadav, a law professor and associate dean at Vanderbilt University. "I think they are very happy to see SBF and FTX punished in the harshest terms possible."
But shaking up cryptocurrencies' association with bad actors is much easier said than done, even as big institutional investors like BlackRock and Fidelity are lining up to get in on the action. bitcoin funds.
When the exchange collapsed, it unleashed a contagion in cryptocurrencies and deepened a sustained sell-off that saw the industry lose $2 trillion in value in 2022. Several companies that were exposed to FTX filed for bankruptcy or were forced to halt withdrawals. Regulators intervened with lawsuits accusing some of the biggest names in the business, such as Coinbase and Binance, of selling unregistered securities. FTX customers whose deposits evaporated are still waiting in limbo to see if they will be recovered.
The memory of Bankman-Fried will not be easily erased. The fraud for which he was convicted is among the largest in American history, earning him a place in the fraudsters' hall of fame. with Bernie Madoff and Elizabeth Holmes.
And the conviction is not the end of his legal battle.
A second trial on five additional charges, including alleged campaign finance violations and bribery of foreign officials, is scheduled for March, and it is up to the Justice Department to decide whether to move forward with that case. Bankman-Fried's lawyers vowed to continue fighting to prove his innocence, setting the stage for an appeal.
Beyond FTX and Bankman-Fried, cryptocurrencies are still stuck in a regulatory fight with the Securities and Exchange Commission and its leader, Gary Gensler, who has taken an openly hostile position toward digital assets.
“There is definitely an element of ‘ding-dong, the witch is dead,’” said Eric Soufer, political advisor to major cryptocurrency companies, referring to Bankman-Fried’s conviction. "But in crypto... the boogeyman is still Gary Gensler and the SEC, and I don't think this case will fundamentally change that dynamic."
