This was quite the year for the crypto industry. From funding shortfalls to the SBF saga playing out in public, the industry and its proponents had a wild year, especially with crypto prices fluctuating more than London’s weather in April.
Still, regulation of crypto and how it is being set up to be enforced was at the forefront of everyone’s minds in the crypto industry. And even though 2024 is going to distract everyone with the Presidential elections, many in the crypto industry are hopeful that clearer guidelines will be laid out in the coming months.
“2023 has certainly seen some controversies, although in many ways, it has been a lull from the crypto winter and hangover from the crash of FTX and LUNA in 2022,” Jack Vinijtrongjit, co-founder and CEO of web3 infrastructure company AAG, told TechCrunch+.
Multiple major scandals rocked the industry in 2022, and consequently, this year, we got front-row seats to the U.S. government’s response. This month alone was intense for the crypto industry: Early in November, FTX’s former CEO Sam Bankman-Fried was found guilty on seven charges of fraud, and then last week, Binance’s CEO Changpeng Zhao stepped down after pleading guilty to a number of charges brought by several U.S. agencies for not cooperating with the country’s laws.
But the rest of the industry “doesn’t need to suffer because of what [Bankman-Fried] has been convicted of,” said Anthony Sabino, professor of law at the Peter J. Tobin College of Business at St. John’s University. The former FTX CEO’s actions shouldn’t hold the industry accountable, Sabino said, but he acknowledged that the series of events that led to FTX’s bankruptcy would result in regulators wanting to rule out the next SBF and deter other bad actors.
“In the long run, catching and punishing bad actors is good for an industry, including blockchain,” said Adam Ettinger, partner at law firm FisherBroyles. “In the short run, nobody wants to go to Thanksgiving dinner and have to explain how their startup is nothing like Celsius or FTX.”
Still, the industry wishes the government and regulators could be clearer about regulation and set down concrete rules.
Mixed messages
“This year, we have heard persistent and pervasive messages from the government, but the messages have been mixed,” Ettinger said. “On one hand, the SEC brought 26 enforcement actions involving digital assets. On the other hand, we have members of Congress that understand the importance of blockchain innovation and are pushing to regulate the technology in a way that won’t stifle our entrepreneurs or send them abroad.”