Sam Bankman-Fried's stated dream was for the crypto industry to improve upon and supplant the world's existing financial infrastructure. That dream is now dead.
. If the collapse of SBF's crypto exchange, FTX, caused nothing but financial losses, that would be bad but not unprecedented.
FTX is much more systemically important to the crypto ecosystem, however, than its size alone would suggest.The story of SBF and FTX is a story of how all financial systems — even one built on a bedrock of mistrust — end up creating trusted centralized counterparties. It now looks likely that SBF — arguably the most trusted man in crypto — will turn out to have been a crook who was embezzling his ownIf that's the case, then lawmakers will have every reason to ignore industry pleas for special regulatory treatment. It might be many years, if ever, before crypto entrepreneurs have any hope they'll be treated as though they're responsible and law-abiding.
When that happened, the valuation of FTX — not to mention the market value of its associated exchange token, FTT — was rising much more quickly than any hole in Alameda's balance sheet.The hole in Alameda's balance sheet still needed to be filled somehow, and it reportedly ended up being filled with client funds from FTX. So when those clients started asking for their money back, they discovered it wasn't there.
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