It is said that in order to process a traumatic event or any major change, one must go through the five stages of grief: denial, anger, bargaining, depression, and acceptance. It’s fair to say that public denial, anger, and sadness have been on display since the reality of what happened at the failed cryptocurrency exchange FTX became clear.
Perhaps now that FTX founder Sam Bankman-Fried has been arrested in the Bahamas and will be extradited to the United States, the crypto industry can move on to the sixth and most important step of the grieving process: moving on.
The demise of FTX and subsequent arrest of its disgraced former CEO have dealt a heavy blow to the crypto world, but I believe the time has come to evaluate the events of the past month and make sure we don’t ignore the lessons they can teach us.
Be open about the speculative aspects of cryptocurrency.
It is obvious that the industry needs to mature. The speculative elements of the crypto environment must be reined in because trouble is still ahead of us – at least in the short term – and we must all pull together if crypto is to survive.
Furthermore, if we want it to thrive, we must be honest with ourselves about what we need to change.
Sure, regulators still need to create a clear legal framework for the industry, and FTX’s demise may scare them into overreacting in all future legislation. But that’s their right, and there’s not much we can do about it.
Remember the internet bubble of 2001?
Everyone who believes in the validity of the principles upon which crypto is founded should keep in mind that this situation is easily analogous to the 2001 internet bubble. We all know how that one turned out, don’t we?
FTX, in some ways, proves the value of decentralisation rather than the opposite, similar to how events two decades ago solidified the internet as we know it today.
People can’t seem to tell the difference between blockchain technology and obvious examples of its potential abuse, but it’s critical that we start educating both regulators and the general public about what that looks like and why it matters.
The traditional financial sector is riddled with examples of fraud, malpractice, negligence, and other questionable or criminal behaviour. We can all tell the difference between the principles that underpin our financial system and isolated instances of it being abused. We would never conflate the two in order to punish those who wish to mock our legal system.
Why should cryptocurrencies be any different?
Rebuild the cryptocurrency industry on trust and transparency.
We can finally begin to move forward and rebuild the kind of industry we envisioned in the first place by leveraging Bankman-actions Fried’s to take a stand against any speculative, criminal, or otherwise immoral elements that crypto may still be fostering. Not whatever Bankman-Fried had in mind, but one with real-world utility.
In five or ten years, what is unfolding before our eyes will undoubtedly be regarded as the true tipping point for what was an immature technology maturing into a true grown-up powerhouse capable of reshaping our collective future.
