Trust Is Currency: Repairing Crypto’s Reputation After the Bankman-Fried Sentencing

So, Sam Bankman-Fried was sentenced to 25 years in prison. Some folks will say that’s too much time; others will say he should have gotten life without parole. Either way, there’s a lot of damage to be undone if the blockchain is to remain a legitimate, respected entity.

Every corner of the financial markets has its bad actors. If you’re reading this, you’ve probably heard about certain big banks illegally manipulating silver prices, or creating double accounts for customers without permission in order to collect extra fees.

There’s no meaningful reckoning for those big banks. Sure, a few lower-level participants could get jail time, or the banks themselves might be fined billions of dollars (which they’ll just pass on to the customers through higher fees and interest rates).

However, the head honchos at those banks – the ones pulling the strings – will never get any jail time. They won’t face any financial consequences, either. They could practically run the banks into the ground, but their “golden parachute” clauses ensure that executives get a massive payout irrespective of their actual performance.

When the head of a big-money (or at least, medium-money) financial institution finally faced real prison time, naturally it was going to be someone in the cryptocurrency space. With his wild hair and seemingly endless arrogance, Sam Bankman-Fried was the ideal target for everyone who never trusted Bitcoin and the blockchain.

Courtesy: @KobeissiLetter

To me at least, it’s interesting that the collapse of FTX has been called the “biggest case of fraud ever.” I tend to feel that certain actions by central banks and governments would qualify as much bigger in terms of scope and damage done.

Don’t get me wrong; what Bankman-Fried did was undeniably egregious. The terms “fraud” and “Ponzi scheme” barely scratch the surface of his crimes, and it’s encouraging to see some form of justice done.

At the same time, this gives anti-cryptocurrency radicals an excuse to point a finger at the blockchain and condemn it as a haven for criminals, thieves, and con artists. After all, FTX was once considered a major player in the crypto space.

And, for a short time at least, Bankman-Fried was the face of young, brash blockchain-based entrepreneurship. He had odd hair and bold views, but perhaps his eccentricity could be written off as a sign of genius at work.

Unfortunately, it’s easy to confuse genius and evil sometimes. Hopefully, regulators and investors will recognize Bankman-Fried’s misdeeds as the malfeasance of one man and, by extension, one crypto company.

Courtesy: @saylor

Maybe, they’ll also understand that the blockchain can have a profoundly positive impact on the global financial system. When used for good instead of evil, Bitcoin has the potential to address rampant fiat-money debasement and rescue entire populations from poverty.

Yet, that news isn’t as eye-catching as the story about Bankman-Fried bilking his clients for billions of dollars. Evidently, the media can’t easily monetize news items about how the digital ledger can help people.

Still, if the market truly is a voting machine, then this year’s Bitcoin price rally suggests that the people are voting in favor of the digital-money revolution. Bankman-Fried doesn’t have to be the face of cryptocurrency any more than banking-sector manipulators should represent the silver market.

Undeniably, from Mount Gox to FTX, there will be some terrible chapters in the history of crypto. Yet, the story is still being written and if people can recognize the blockchain’s benefits, the good will outshine the bad in the long run.