Celebrities named in class action are the latest looped into meteoric FTX fall

[Northern_Piper]

@glowacks

The fact that this took place in crypto space makes it looks like a failure of crypto, but it really isn’t. While it’s fallout from the crypto bear market, the price of crypto hasn’t really fallen all that much since then compared to what would happen if people thought the whole system was undermined by what SBF did. This could have been any financial company that stole their user’s funds to prop up their bad investments. It was entirely due to outright lying by the executives and owners at FTX that this came to pass, and there was no clue anyone not working directly on the code that enabled it could have had before the situation imploded.

These are good points, but there is the other aspect: one of the selling features of crypto is that it’s not dependent on governments to keep it safe, often by investors who are sceptical of government regulation.

Then, as you say, there is a failure caused by dishonest management, which government regulation is meant to prevent, which triggers calls for regulation of crypto exchanges. There’s definitely an ideological/philosophical tension there about the relationship between crypto and government.

FTX illustrated why banks need to take over cryptocurrency

Cryptocurrency exchange founder dies and takes password to the grave

$190M of cryptocurrency at the QuadrigaCX exchange is inaccessible after apparently the only person with the key has died, leaving nobody else in the company knowing it or how to get it. What does a cryptocurrency exchange do, and why would they have hundreds of millions of dollars of other people’s money under their absolute control? I thought that if you owned cryptocurrency, you had it in your own wallet. How is it that an exchange is holding that much of other other people’s crypto? I thoug…