The romance with cryptocurrency is over. After years of growth and investment gains, things came tumbling down with the collapse of the FTX Trading exchange in November 2022. The carnage was palpable. Since then, investors have dumped crypto, the news media has churned out a stream of stories about failed exchanges, and political leaders have demonized digital currencies. And all for good reason. At a US House Financial Services Committee hearing last December, John J. Ray, the new CEO of FTX, admitted to lawmakers that there had been “no record keeping whatsoever,” and confessed that the crypto exchange had essentially engaged in “old-fashioned embezzlement.” So, it’s understandable that markets, politicians, the press, and the public are seething. At first glance, all this chaos and turmoil indicates that something is fundamentally wrong with crypto. However, nothing could be further from the truth. The stampede away from crypto isn’t a referendum on its value to society — or on the underlying blockchain technology. The affliction affecting crypto is, at its heart, an identity problem. Crypto enables transactions through the Internet and metaverse that otherwise aren’t possible. Along with blockchain, it allows individuals to maintain ownership over money, data, and other assets in a highly interconnected digital world, and without a central authority.
Full commentary : Why the FTX Collapse Was an Identity Problem.