# Sam Bankman convicted 2023-11-02 (was living with parents, then jail). Is BTC and cryptocurrency busted too? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [December 23, 2022, 8:10pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019 "2022-12-23T20:10:03Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![aceplace57](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aceplace57/32/3500_2.png) [@aceplace57](https://boards.straightdope.com/u/aceplace57)\ **Post date:** [December 23, 2022, 8:10pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/1 "2022-12-23T20:10:03Z")
Well, did the entire digital currency world get hustled & screwed by Bankman? Is BTC dead? Can cryptocurrency survive? Will investors ever trust it again? If you currently own bitcoin should it be sold ASAP? ---
**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\ **Post date:** [December 23, 2022, 8:47pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/2 "2022-12-23T20:47:05Z")
I’m not sure how the fact that Bankman-Fried (note his full last name) is living with his parents while he’s out on bail has anything to do with whether crypto is going to tank, but… This isn’t the first cryptocurrency scandal, nor the first time that a crypto service has turned out to be fraudulent, and left investors holding the bag. In 2019, the Canadian crypto exchange Quadriga collapsed, after the alleged death of its founder/CEO, Gerald Cotten, who was said to have had the only access to the exchange’s “cold wallet.” It now appears that Quadriga was a Ponzi scheme, and there are still allegations that Cotton isn’t actually dead. > **[Quadriga Fintech Solutions](https://en.wikipedia.org/wiki/Quadriga_Fintech_Solutions)** > > Quadriga Fintech Solutions was the owner and operator of QuadrigaCX, which was believed to be Canada's largest cryptocurrency exchange. In 2019 the exchange ceased operations and the company filed for bankruptcy with C$215.7 million in liabilities and about C$28 million in assets. > The company's CEO and founder, Gerald William Cotten, allegedly died in 2018 after traveling to India. Up to C$250 million (US$190 million) in cryptocurrency owed to 115,000 customers was missing or could not be acce... ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [December 23, 2022, 8:52pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/3 "2022-12-23T20:52:56Z")
And before that, there was MtGOX. ---
**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\ **Post date:** [December 23, 2022, 9:11pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/4 "2022-12-23T21:11:56Z")
> [@Chronos](#): > > MtGOX. More details on them in the Wiki link below; at the time when their issues started to become known (late 2013/early 2014), they were processing most of the world’s Bitcoin transactions. > **[Mt. Gox](https://en.wikipedia.org/wiki/Mt._Gox)** > > Mt. Gox was a bitcoin exchange based in Shibuya, Tokyo, Japan. Launched in 2010, it was handling over 70% of all bitcoin (BTC) transactions worldwide by early 2014, when it abruptly ceased operations amid revelations of its involvement in the loss/theft of hundreds of thousands of bitcoins, then worth hundreds of millions in US dollars. > In February 2014, Mt. Gox suspended trading, closed its website and exchange service, and filed for bankruptcy protection from creditors. In April 2014, the co... ---
**Author:** ![dolphinboy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dolphinboy/32/330_2.png) [@dolphinboy](https://boards.straightdope.com/u/dolphinboy)\ **Post date:** [December 23, 2022, 9:22pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/5 "2022-12-23T21:22:39Z")
I don’t think this will stop people from purchasing cryptocurrency. The advantages of cryptocurrency far outweigh the real chance of losing it all to nefarious companies. ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [December 23, 2022, 9:27pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/6 "2022-12-23T21:27:05Z")
> [@dolphinboy](#): > > The advantages of cryptocurrency far outweigh the real chance of losing it all to nefarious companies. It appears that the vast majority of people who own crypto never use it as currency. It’s an investment for most, and losing it all to nefarious companies would seem to be an issue for investments. ---
**Author:** ![Pardel-Lux](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pardel-lux/32/20182_2.png) [@Pardel-Lux](https://boards.straightdope.com/u/Pardel-Lux)\ **Post date:** [December 23, 2022, 9:28pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/7 "2022-12-23T21:28:35Z")
What frustrates me is that all those exchanges are not listed anywhere where there is a regulated trade and therefore cannot be shorted. At least I have found no way to short them. > [@dolphinboy](#): > > The advantages of cryptocurrency far outweigh the real chance of losing it all to nefarious companies. Would you mind telling me one or two of those advantages? ---
**Author:** ![ASL\_v2.0](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asl_v2.0/32/3525_2.png) [@ASL\_v2.0](https://boards.straightdope.com/u/ASL_v2.0)\ **Post date:** [December 23, 2022, 9:29pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/8 "2022-12-23T21:29:51Z")
> [@kenobi\_65](#): > > and there are still allegations that Cotton isn’t actually dead. I will Google that story, not recalling any of the names but just the general circumstances of the case, from time to time to see if the other shoe has dropped yet (the “rumors of my death have been greatly exaggerated” shoe). I realize it might never. I realize he might really be dead. But it’s curious t say the least. ---
**Author:** ![dolphinboy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dolphinboy/32/330_2.png) [@dolphinboy](https://boards.straightdope.com/u/dolphinboy)\ **Post date:** [December 23, 2022, 9:31pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/9 "2022-12-23T21:31:12Z")
> [@Pardel-Lux](#): > > Would you mind telling me one or two of those advantages? 8 benefits of cryptocurrency ``` Transaction speed. Transaction costs. Accessibility. Security. Privacy. Transparency. Diversification. Inflation protection. ``` ---
**Author:** ![Pardel-Lux](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pardel-lux/32/20182_2.png) [@Pardel-Lux](https://boards.straightdope.com/u/Pardel-Lux)\ **Post date:** [December 23, 2022, 9:32pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/10 "2022-12-23T21:32:52Z")
Diversification, yes. It’s something completely different from other assets. The rest? I dispute. ETA: And security, privacy and transparency flat out contradict each other. ---
**Author:** ![Stranger\_On\_A\_Train](https://avatars.discourse-cdn.com/v4/letter/s/13edae/32.png) [@Stranger\_On\_A\_Train](https://boards.straightdope.com/u/Stranger_On_A_Train)\ **Post date:** [December 23, 2022, 9:33pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/11 "2022-12-23T21:33:58Z")
As much as cryptobros complain that “fiat money” issued by governments is only backed by the reputation of the government, cryptocurrency literally has no actual basis in valuation except what market speculators value it at, which means as a medium of exchange it is remarkably unstable and prone to manipulation by innuendo and “pump & dump” schemes. Bitcoin still exists, of course, and it isn’t going away anytime soon but I thing plans to adopt it as some kind of anarcho-capitalist alternative currency that governments can’t effectively regulate is severely hampered by the twin facts of that lack of stability a d the fact that there is no real cryptocurrency economy, i.e. to buy most real goods and services, and anything regulated by governments such as real estate, market-regulated commodities, et cetera you have to convert it back into dollars, euros, yuan, or some other recognized currency where the transaction is occurring. Bitcoin and other crypto is really playing a high stakes game of “Hot Potato”, and while Bitcoin gets away with this by being the first and largest, most other upstart cryptocurrencies haven’t really made and impact or have any real endurance beyond their niche appeal. Stranger ---
**Author:** ![JRDelirious](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jrdelirious/32/9531_2.png) [@JRDelirious](https://boards.straightdope.com/u/JRDelirious)\ **Post date:** [December 23, 2022, 11:19pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/12 "2022-12-23T23:19:06Z")
> [@Stranger\_On\_A\_Train](#): > > plans to adopt it as some kind of anarcho-capitalist alternative currency that governments can’t effectively regulate is severely hampered by the twin facts of that lack of stability a d the fact that there is no real cryptocurrency economy, i.e. to buy most real goods and services, and anything regulated by governments such as real estate, market-regulated commodities, et cetera you have to convert it back into dollars, euros, yuan, or some other recognized currency where the transaction is occurring And “hard” fiat currencies have their value lie in that you _know_ the issuing country (USA, UK, EU, PRC, Japan, etc.) are not going anywhere, have economies that use capital and labor to produce and consume goods and services that real humans rely upon, _ **and** _ that they will take stability thereof seriously ((looks at recent events and sweats a bit, 😬 ))… Crypto in the current world ISTM more akin to gold or some other metal store of value. There is a limited supply, mining more has an undesirable environmental impact, unlike land it does not in and of itself have a potential to be “worked” to generate an output, and your corner supermarket or car dealer is not taking it as payment – though TBF many merchants _are_ adopting Bitcoin as an alternate method of payment if is only insofar as it can _then_ be converted to Legal Tender. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [December 23, 2022, 11:29pm UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/13 "2022-12-23T23:29:35Z")
We did a thread on Quadriga and the Cotten saga: > [@Cryptocurrency exchange founder dies and takes password to the grave](https://boards.straightdope.com/t/cryptocurrency-exchange-founder-dies-and-takes-password-to-the-grave/828963): > > [$190M of cryptocurrency at the QuadrigaCX exchange is inaccessible](https://www.theguardian.com/technology/2019/feb/04/quadrigacx-canada-cryptocurrency-exchange-locked-gerald-cotten?fbclid=IwAR1QVlKwH6xXBx6Sz9KrsZybamSpYoWZ5wje5Y9B2tocZ9kYS9nR3tMg5-U) 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… ---
**Author:** ![aceplace57](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aceplace57/32/3500_2.png) [@aceplace57](https://boards.straightdope.com/u/aceplace57)\ **Post date:** [December 24, 2022, 12:11am UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/14 "2022-12-24T00:11:50Z")
I have a CD maturing and was considering Bitcoin. I had just started reading about the market. The Bankman arrest hit the news and made me reconsider. Posters here have pointed out there have been other fraudulent companies. My best choice may be to renew the CD. I dont think the interest isn’t keeping up with inflation but the money is secure. ---
**Author:** ![DocCathode](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doccathode/32/18773_2.png) [@DocCathode](https://boards.straightdope.com/u/DocCathode)\ **Post date:** [December 24, 2022, 12:13am UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/15 "2022-12-24T00:13:49Z")
Bitcoin is a bubble. Bubbles burst. It is possible to make a lot of money on a bubble if you get in early and get out just in time. Early for Bitcoin was years ago. I say, stick with the CD. ---
**Author:** ![Stranger\_On\_A\_Train](https://avatars.discourse-cdn.com/v4/letter/s/13edae/32.png) [@Stranger\_On\_A\_Train](https://boards.straightdope.com/u/Stranger_On_A_Train)\ **Post date:** [December 24, 2022, 12:16am UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/16 "2022-12-24T00:16:58Z")
> [@DocCathode](#): > > Bitcoin is a bubble. Bubbles burst. It is possible to make a lot of money on a bubble if you get in early and get out just in time. > **[Crypto Confidence Soars After CEO Defrauds Customers Just Like Real Bank](https://theonion.com/crypto-confidence-soars-after-ceo-defrauds-customers-ju-1849773647/)** > > NEW YORK—In light of FTX Trading Limited’s announcement of bankruptcy amidst accusations of mishandling funds, crypto confidence reportedly soared Friday after investors realized that CEO Sam Bankman-Fried defrauded customers just like a real bank.... Stranger ---
**Author:** ![aceplace57](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aceplace57/32/3500_2.png) [@aceplace57](https://boards.straightdope.com/u/aceplace57)\ **Post date:** [December 24, 2022, 12:19am UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/17 "2022-12-24T00:19:42Z")
I’m very conservative with my investments. I’ve been watching Crypto for a long time. Waiting to see if it would prove its stability. I’m glad Bankmam got busted before I did something stupid. FTX was one of the companies I had considered. ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [December 24, 2022, 12:34am UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/18 "2022-12-24T00:34:21Z")
> [@dolphinboy](#): > > 8 benefits of cryptocurrency > > ```auto > Transaction speed. > Transaction costs. > Accessibility. > Security. > Privacy. > Transparency. > Diversification. > Inflation protection. > > ``` It’s not clear what use you have for crypto. But regarding your alleged “advantages”, I have to ask, advantages compared to what? For making purchases, a credit card’s “transaction speed” is essentially instantaneous, and transaction costs are zero for the purchaser. Furthermore, credit cards offer substantial protection from fraud, and are well regulated. I don’t even know what “accessibility”, “security”, “privacy”, or “transparency” are supposed to mean. As far as “privacy” and “security” are concerned, there is no public record of my CC transactions, I’ve seen no evidence that banks use that information for data mining, I trust our regulated banks in this country far more than I trust some crypto-bro, and there’s nothing I buy with credit cards that I would want to hide from authorities. So why would I use crypto for payments? And “diversification” and “inflation protection” sounds like it’s supposed to appeal to the idea of using crypto as an investment vehicle. Which to my mind is just crazy. Has money been made and lost on crypto? Sure. And money has been made and lost on Trump NFT trading cards. Some people enjoy gambling, sometimes to the point of ruinous dysfunction, but don’t call it “investing”. Investing means putting money into something with intrinsic value that you have good reason to believe will appreciate over time because of that durable intrinsic value. ---
**Author:** ![Alessan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alessan/32/465_2.png) [@Alessan](https://boards.straightdope.com/u/Alessan)\ **Post date:** [December 24, 2022, 12:39am UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/19 "2022-12-24T00:39:04Z")
> [@JRDelirious](#): > > Crypto in the current world ISTM more akin to gold or some other metal store of value. The difference is that unlike crypto, gold and other metals are also commodities, which is the source of their value. ---
**Author:** ![Bootb](https://avatars.discourse-cdn.com/v4/letter/b/e19b73/32.png) [@Bootb](https://boards.straightdope.com/u/Bootb)\ **Post date:** [December 24, 2022, 12:39am UTC](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019/20 "2022-12-24T00:39:35Z")
> [@Telemark](#): > > It appears that the vast majority of people who own crypto never use it as currency. It’s an investment for most, and losing it all to nefarious companies would seem to be an issue for investments. They **call** it an investment. So far, it seems to me to be more on the “gambling” end of the spectrum. [Next page](https://boards.straightdope.com/t/sam-bankman-convicted-2023-11-02-was-living-with-parents-then-jail-is-btc-and-cryptocurrency-busted-too/977019.md?page=2)