The meteoric rise and bankruptcy of cryptocurrency derivative exchange FTX focused global attention on the risks of investing in unsecured, decentralized digital currency, as well as on its potential for largescale financial fraud. U.S. investors, including high-profile celebrities who had touted the promise of this brave new digital economy, lost approximately $400M seemingly overnight.
FTX CEO Sam Bankman-Fried was arrested on eight counts of wire fraud, money laundering, violations of securities laws and other financial crimes. An estimated $7B was lost in the collapse, and it will take years to untangle and litigate the scheme—and to perhaps recoup some fraction of the invested millions.
