What the Sam Bankman-Fried trial has taught the crypto community about playing by the rules
Ever since the implosion of FTX in November 2022, the crypto world has waited in anticipation for a final decision on the matter. Far beyond consequences for Sam Bankman-Fried himself, this trial has implications for the regulatory landscape as a whole. The industry has long been hanging in the balance, caught on one side between oversight bodies such as the SEC, eager to provide a regulatory framework for the space, and on the other, crypto enterprises, ready to capitalize on innovation – sometimes, by skirting the rules or worse, ignoring them altogether.
The verdict is now in, confirming what some might have predicted: SBF, as he is colloquially known, is guilty. Specifically, he was found to have committed seven different counts of fraud and conspiracy for his role as the ringleader in a scheme that siphoned over eight billion dollars' worth of customer assets.
While Bankman-Fried’s sentencing is still forthcoming, the trial’s outcome has sent a resounding message to the crypto community: breaking the rules has severe consequences. The verdict also underscores the importance of compliance within the crypto industry. Fraud is a problem in all business sectors, and the crypto market is learning many of the painful lessons previously learned in other markets – namely, just because assets are on a blockchain does not make them immune to many of the risks that are so effectively regulated in more established financial markets.
As more players embrace the promise of digital assets, the potential for consumer risk increases, and the importance of a clear set of legal and regulatory guardrails is magnified. It's time for responsible providers to start viewing this as an opportunity. Since its inception, Bakkt has aimed to serve as an example of how to “crypto responsibly,” upholding the highest standards of transparency, security and compliance. We believe that abiding by these principles, including as they continue to evolve through new legislation and regulatory guidance, is the best way for the enormous potential of crypto to be realized.