The flight from the Bahamas and first court appearance for FTX founder Sam Bankman-Fried provides a dramatic book-ending for the cryptocurrency bubble.
It follows guilty pleas to similar fraud charges by two associates. The whole crypto system is being exposed as a multi-trillion dollar pyramid scheme.
Firms who bought into the myth propped up their balance sheets by swapping crypto-backed instruments, allowing them to assume ever more leverage.
Extradition: FTX founder Sam Bankman-Fried, is escorted out of the Magistrate Court building in Nassau, Bahama
It is remarkable that, even as the whole structure goes down, the crypto missionaries are still preaching the virtues.
Bitcoin has fallen a long way from the dizzy heights of $69,000 hit in November 2021, valuing the market at $3trillion. That is more than the size of the UK’s total GDP.
Yet it is still at an astronomic level, close to $17,000, even after a cascade of insolvencies and exposure of an edifice built on lies, alleged fraud and money laundering.
Those who have drunk the Kool-Aid are finding it hard to leave the cult. As recently as this week the backers of the ethereum blockchain were trumpeting how upgrades, creating a more energy-efficient architecture, meant the appetite for crypto assets would return in 2023.
The enormous energy consumption involved in ‘mining’ crypto has been a huge downer for those fixated on climate change.
To believe that it will be fine next year is sheer, unadulterated delusion.
There is difficulty in getting the message across that crypto and its cousin, non-fungible tokens (NFTs) meet none of the criteria for a currency.
They cannot be used as a medium of exchange to trade goods nor are they a store of value.
Many smart people played the bitcoin game as a one-way bet at the roulette table. They bought a few chips from the croupier, watched them soar in value as the wheel spun and stopped, and managed to cash in before the final halt.
Those on the winning side,…
