Second, is the future of cryptocurrency regulation in jeopardy? Freed was seen as the “white knight” most likely to persuade skeptical lawmakers about the value of cryptocurrencies. Right now, those efforts seem stagnant at best — and regulators who want to portray crypto as an out-of-control Wild West will have another example to point to.Cryptocurrency investor Catherine・ Mr. Wu tweeted on tuesday It was “a truly upsetting news day – we can’t even begin to assess the potential damage our industry must face.”
Third, will the FTX collapse trigger a broader market failure, like the Lehman Brothers collapse in 2008?
Already, the news has spilled over to other cryptocurrency markets. Bitcoin and Ether prices both fell on Tuesday, while Solana (the FTX-backed cryptocurrency) fell about 20%. Shares of publicly traded cryptocurrency companies such as Coinbase also fell. His FTX investors, including Sequoia Capital, Lightspeed Venture Partners and SoftBank, would most likely lose most or all of their investments. And given how intertwined FTX was with the rest of the crypto economy, it may be a while before we see the full extent of the damage.
The hope, of course, is that, in contrast to 2008, when the collapse of Wall Street led to a global financial crisis that left millions of Americans without jobs and homes, the impact of the FTX collapse would be largely It means staying in the cryptocurrency industry. But it’s still too early to tell.
And finally, what about Bankman-Fried? Until this week, he was the undisputed king of cryptocurrencies and has become an increasingly powerful force in American politics thanks to him. big donation To the Democratic candidate and cause. His fortune, estimated at over $15 billion before the Binance sale, has supported philanthropy (he Major Donor effective altruism movement), media organizations (he is an investor in Semafor), and companies inside and outside cryptocurrencies (he is a major shareholder in stock trading app Robinhood).
Bankman-Fried’s days as a cryptocurrency mogul may be over. (on tuesday, Bloomberg estimates His net worth has dropped by 94% and he is no longer a billionaire.) But the bigger question for crypto investors is whether his empire was unusually unstable or just collapsed first. It means that