Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.
At the height of Sam Bankman-Fried’s influence and power, there was a mostly unspoken question as to how FTX could be spending so profligately on advertisements and investments. The exchange, often cited as the third largest by volume before its epic collapse, was suspected to be unprofitable when compared to competitors. Something of an understatement, in hindsight.
Founded in 2017, and ultimately rocketing to a valuation of $32 billion, FTX had also accrued a lifetime net loss of $3.7 billion before SBF’s multi-billion dollar fraud was even revealed. Those carryover losses were even offset by a wildly profitable bull market in 2021, a year that FTX tax filings show it netted $377 million in profit
It’s for this reason that crypto is ready to move on from FTX. Even as the trial was unfolding, many industry participants began to feel that it was a bit of a sideshow. To the extent that the industry learned anything from the FTX fraud, it’s what many already knew or believed to be true: that centralized operations are anathema to crypto. It’s telling, for instance, that the first lending platform to liquidate Alameda was a DeFi protocol.
Just like the reputational hits after the collapse of Mt. Gox, the DAO attack and the Bitfinex hack — each of which felt existential at the time — there are now generations of committed crypto traders who are more or less unaware of those stories.
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