Crypto justice

I’m not sure whether Sam Bankman-Fried will be feeling that his 25 year sentence for authoring the FTX debacle means he has got off relatively lightly; it was suggested at one point that he might be looking at something closer to a full century, but with time off for good behaviour he might yet be out before he turns 50.

Bleeding-heart liberal that I am, I can’t really see the point in locking him up at all; there must surely be some way he could be obliged to work in the service of the community, though I guess it would take a lot of highway litter-picking to pay off a debt to society that runs into the billions. Perhaps it is for the best that he serves as a cautionary example to those tempted to accumulate wealth by any means, but, given that the financial world is otherwise entirely organised to incentivise such behaviour, I suspect the only lesson aspiring SBFs may learn is “Don’t get caught”.

No crypto

In a development which won’t have surprised anyone who had paid even passing attention to the case laid out by the prosecution, a jury in Manhattan took only four hours to convict Sam Bankman-Fried, erstwhile CEO of collapsed crypto exchange FTX, on all seven charges he faced in connection with the scandal, encompassing wire fraud, money laundering, and, for good measure, securities and commodities fraud. Bankman-Fried reportedly faces more than 100 years in federal prison, and still has another trial on related charges to look forward to next year.

What’s interesting is that, despite his reputation as a DeFi genius, SBF’s crimes were spectacularly low-tech; he took the money entrusted to him by credulous depositors, and spent it on stuff. The crypto veneer added nothing, other than some distracting stardust, and a rationale for registering his company in the Bahamas, thus avoiding US regulatory purview. Even without such oversight it’s hard to see how SBF thought he could get away with it, unless he had become so intoxicated by his own publicity that he believed he really could spin gold out of digital straw.

The FTX debacle, along with various other blockchain-related fiascos, seems to have dealt a fatal blow to the NFT market, a development so predictable that even we managed to see it coming at the peak of the frenzy in 2021.

Despite all this Bitcoin is still doing relatively well, presumably because, unlike pictures of jaded simians, it actually has a use value, albeit one that appeals mainly to criminals looking to transfer funds clandestinely, though even that is not foolproof.

None of this is new of course, as we wrote way back in 2010, apropos of the blog-related scams prevalent in those days:

Persuading people to suspend their disbelief by invoking some magical new paradigm must go back to the days when enterprising cavemen extracted shiny pebbles from their gullible fellows by promising to share the secrets of how to generate revenue using that new “fire” thing that everyone was talking about.

So I think I’ll continue to pass on crypto, or whatever incomprehensible tech-based get-rich-quick scheme comes along next, and stick to old-school working for a living.