Crypto at a crossroads as Binance is busted
In the wake of the SBF and now CZ scandals crypto can go one of two ways from here: further marginalisation of the vast but dubious asset class, or a shift deeper into the mainstream.
As the Jacobean OpenAI drama played out, one sector would have been looking on with not just the same fascination as the rest of us but a sense of relief. The crypto world. Had this latest debacle not erupted, the Sam Bankman-Fried (SBF) tragedy would have continued to dominate the tech news cycle and chat rooms and IRL cafes.
But the reprieve for crypto has proven short-lived.
Overnight, the full brunt of the American regulatory complex came down on the world’s largest crypto exchange, Binance. The exchange, a key plank in the crypto edifice, signed off on a toilet paper roll of offences, including criminal charges related to money laundering and breaching international financial sanctions. Binance will pay more than $US4.3 billion ($6.6 billion) in penalties.
Meanwhile, chief executive Changpeng Zhao, known as “CZ” - presumably there is some secret code which means exchange runners must be known by their initials - will step down, pay his own $US50 million fine and potentially (but probably not) face 18 months in the slammer.
The author Michael Lewis in his latest book “Going Infinite” memorably called the pair the Luke Skywalker (CZ) and Darth Vader (SBF) of crypto. It was one of the few things Lewis has got wrong, as it turns out they were more Harley Quinn and the Joker.
