What does SBF’s arrest mean for crypto? - Episode 315 - by cryptohunt.it

What does SBF’s arrest mean for crypto?

Welcome to the Cryptohunt Jam, where we spend one minute a day explaining crypto. In plain English - and this is another special on FTX.

So: Sam Bankman-Fried got arrested in the Bahamas. The US government is trying to extradite him. Yet again, he's on the cover of every news outlet in the world - it's not looking great for him.

But forget SBF for a second… what does all this mean for crypto in general - and is there a silver lining?

Well, first the bad news, depending on where you stand: More money will likely flow out of crypto markets, because their reputation has suffered immensely... and not unfairly if you ask us. Everyone should have realized by now: Crypto is still a very volatile investment and the risks don't stop there: SBF will surely not be the last fraudster we'll have to talk about. All the great projects out there will be overshadowed by the negative headlines for a while.

And when the government presents its case, we suspect many news documents will be made public that reveal all the other companies that are on shaky ground - because they got a loan from FTX or because FTX lent them money. That'll make even more dominoes fall.

But deep breath… hard to believe, there is a silver lining here. Ever wondered why SBF is in the Bahamas, and prior to that in Hong Kong in the first place? That's because in the US, there are no clear regulations around crypto businesses. And that’s actually preventing businesses from starting there. Sounds paradoxical? Well - think of it this way: You could start a crypto exchange today, and do everything right because no rules exist, but tomorrow's laws could make everything you do in good faith illegal.

Keen observers will notice that Sam wasn't charged with securities fraud - because then the US government would have to take a side and categorize crypto as securities, meaning existing laws can apply. But they have avoided that for the longest time now, and you can bet that SBF's lawyers will not miss out on a single chance to get the SEC to take a side in court. The result, hopefullly? We might be able to avoid the next FTX by creating companies that operate under laws and have real oversight.

Here's to that! We'll keep you in the loop as things are happening every hour right now.

This podcast is produced by Cryptohunt.it, the easiest place to learn crypto. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, design is done by Carmen Rincon, and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.