Business Maverick

Business Maverick

Bankman-Fried’s conviction stirs both hope and condemnation for crypto

Bankman-Fried’s conviction stirs both hope and condemnation for crypto
Sam Bankman-Fried, founder of FTX. (Photo: Sarah Silbiger / Bloomberg via Getty Images)

Sam Bankman-Fried’s conviction for a huge fraud at the FTX exchange raises a deceptively simple question: what next for crypto? 

The former billionaire was a vocal champion of the industry but now faces decades in jail, a fall that is emblematic of the boom and bust in the digital-asset market over the past two-and-a-half years.

Read more: Bankman-Fried Found Guilty of Fraud at FTX Criminal Trial

For some in crypto, his conviction on seven counts of fraud and conspiracy points to the end of an era of risky and wrongful practices, and a more regulated future of wider adoption of digital assets and blockchain technology.

Others outside the industry are taking a much tougher line, arguing that the verdict confirms crypto as a sector riven with weaknesses that attract criminals, hackers and rogue states.

Crypto markets dipped after the verdict but the losses were mostly contained. Bitcoin — up more than 100% this year following a $1.5-trillion digital-asset rout in 2022 — fell about 1% to $34,660 as of 10:46am in Singapore on Friday.

Reactions to the jury verdict follow below.

New era

“The guilty charges in the FTX case mark the end of an era,” said Brian Mosoff, chief executive officer of Ether Capital, which invests in crypto and blockchain projects. “The days of wild west exchanges, scammy assets, fraud, and an industry living off in the corner of the Internet are over.”

“Success, fame, and money were the early-in-the-story words to describe Sam’s empire, but the final will be deception, fraud and justice,” Mosoff said.

Time to move on

“We have to learn and move on,” said Paul Veradittakit, managing partner at venture capital company Pantera Capital, adding “regulatory clarity is needed and helpful to prevent these situations”. 

“Diligence in crypto continues to evolve in the space and I’m sure it has evolved with this current market,” Veradittakit added.


“It’s a watershed moment that reinforces again that crime does not pay in the digital-asset space and there is enforcement, which should reassure investors and traders that the industry is maturing,” said Angelina Kwan, chief executive officer of regulatory consultancy Stratford Finance. “We will look back at this moment and say this was the first step out of the crypto winter that the demise of FTX contributed to.”

Industry condemned

“FTX and Sam Bankman-Fried are not one-offs in the crypto industry,” said Dennis Kelleher, co-founder of Better Markets. “In fact, today’s conviction is a condemnation of the entire crypto industry and its business model which is based on breaking the law for a financial product that has no socially useful purpose.”

“It is just the opposite: crypto’s use and value is in breaking the law, from ripping off customers, money laundering and tax evasion to ransomware, gambling, and funding terrorists and rogue states like Hamas, North Korea, and Iran,” he said.

Painful lesson

“This is an important disruption in our financial system,” said Campbell Harvey, a finance professor at Duke University, referring to crypto and blockchain technology. “Part of the process includes learning from the failure. There are painful lessons. However, the system becomes stronger after these failures. We learn, often the hard way, but we learn. We need to always think about the big picture: improving our financial system, which leads to financial democracy and increased economic growth.”


Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

[%% img-description %%]

The Spy Bill: An autocratic roadmap to State Capture 2.0

Join Heidi Swart in conversation with Anton Harber and Marianne Merten as they discuss a concerning push to pass a controversial “Spy Bill” into law by May 2024. Tues 5 Dec at 12pm, live, online and free of charge.

A South African Hero: You

There’s a 99.8% chance that this isn’t for you. Only 0.2% of our readers have responded to this call for action.

Those 0.2% of our readers are our hidden heroes, who are fuelling our work and impacting the lives of every South African in doing so. They’re the people who contribute to keep Daily Maverick free for all, including you.

The equation is quite simple: the more members we have, the more reporting and investigations we can do, and the greater the impact on the country.

Be part of that 0.2%. Be a Maverick. Be a Maverick Insider.

Support Daily Maverick→
Payment options