Crypto was supposed to solve financial corruption. The FTX scandal shows it’s got worse | David A Banks

The collapse of the feted company should provide a wake-up call to Rishi Sunak, who has been singing the praises of cryptocurrencies

On 11 November 2022 FTX declared bankruptcy. The firm was once heralded as the Goldman Sachs of crypto, and its CEO, Sam Bankman-Fried, was deemed by some the next Warren Buffett. And now, just after proclaiming in an interview that he would not be arrested, he is in custody in the Bahamas awaiting extradition to the US. He is charged with a litany of fraud and campaign finance law violations, in what US prosecutors are calling one of the biggest financial frauds in American history".

Casual investors, along with funders ranging from the Ontario Teachers' Pension Plan to BlackRock, who invested millions into FTX, are now uncertain where their money went and if they will ever get it back. Amid a long series of scandals and collapses, this seems to be the one that has undermined trust of and within the cryptocurrency sector. This is far from over and if you want to keep up on it, researcher Molly White has made an excellent chart where you can watch the contagion spread.

David A Banks is the director of globalisation studies at the University at Albany, SUNY and is the author of The City Authentic: How the Attention Economy Builds Urban America