CoinGeek’s Kurt Wuckert Jr. once again joined Lisa Kennedy Montgomery on FOX Business to talk about the FTX scandal, the digital currency industry crash, and the regulations that are likely to follow.
What’s the potential fallout in terms of regulation?
Kennedy begins by asking Wuckert what he believes the potential fallout in terms of regulation could be in the wake of the FTX exchange implosion.
Wuckert responds that what happened is “crystal clear lawbreaking.” He laughs off the notion that FTX is some sort of unique case that’s never been seen before; he characterizes it as an illegal banking operation that has been running a gigantic Ponzi scheme.
As a result, Wuckert doesn’t believe there needs to be a new bureau or set of regulations. Instead, we just need to tighten up and apply existing laws. Indeed, law enforcement clearly agrees, given that Sam Bankman-Fried was recently arrested in the Bahamas and will be extradited to the United States to face multiple criminal charges.
Bankman-Fried’s access and privilege in Washington
Kennedy points to SBF’s attempt to buy influence in Washington. She asks Wuckert if there was resentment in the wider industry at him being there alone, speaking to lawmakers’ ears and attempting to craft regulations that would be favorable to him and FTX.
Wuckert says the situation itself is weird. He notes that Bankman-Fried only popped up a couple of years ago, and despite having been in the industry for a decade, he’d never heard of him before. Wuckert was taken aback by how quickly Bankman-Fried became a prominent figure in the industry, going from unknown to being on-stage with Bill Clinton within a few short years. He struck Wuckert as a PR-agency creation designed to make the industry look goofy, and now he has made everybody in the industry look suspicious to mainstream observers.
Tony Blair and Bill Clinton on the same stage (and SBF.) You don’t see that very often these days, eh? pic.twitter.com/Vt5pn6egHn
— Dan Keeler (@dankeeler) April 28, 2022
Sam Bankman-Fried on stage with Bill Clinton and Tony Blair in April 2022.
How did he get so far, so fast?
Kennedy asks how Bankman-Fried got into places like Sequoia Capital. She wonders if it’s down to jargon and a lack of technical understanding of the industry. Wuckert puts it down to him being from a wealthy and powerful family with connections.
“He’s not a good salesman or speaker, and he doesn’t even really inspire much confidence if you sit and listen to him,” he says, saying that having connections is the only reasonable explanation for how he got so far, so fast, and how he was able to walk into places like Sequoia and ask for so much money.
How long will it take to get back to a place of trust in the wake of all of this?
Wuckert says that it’s a shame that the great technology we have, which allows for low-friction global payments and increased data integrity (Bitcoin SV), is being sacrificed at the latter because of people like Bankman-Fried. It’s going to take a while to restore that trust in any case.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
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