For subscribers

FTX collapse won’t spell the end of crypto or scandals

More countries may follow China in banning crypto transactions. But no bold regulatory action is likely to come from the US.

FTX may be the biggest scandal in crypto so far; sadly, it is unlikely to be the last, says the writer.

FTX may be the biggest scandal in crypto so far, but sadly, it is unlikely to be the last, says the writer.

PHOTO: NYTIMES

Kenneth Rogoff

Follow topic:

SAN FRANCISCO – The epic

collapse of wunderkind Sam Bankman-Fried’s US$32 billion (S$44 billion) crypto empire FTX

looks set to go down as one of the great financial debacles of all time. With a storyline full of celebrities, politicians, sex and drugs, the future looks bright for producers of feature films and documentaries. But, to paraphrase Mark Twain, rumours of the death of crypto itself have been much exaggerated.

True, the loss of confidence in “exchanges” such as FTX – essentially crypto financial intermediaries – almost surely means a sustained steep drop in prices for the underlying assets. The vast majority of Bitcoin transactions are done “off-chain” in exchanges, not in the Bitcoin blockchain itself. These financial intermediaries are vastly more convenient, require much less sophistication to use, and do not waste nearly so much energy.

FTX collapse won’t spell the end of crypto or scandals

Follow topic:

See more on