Searching for Exuberance Among the Ruins of Cryptocurrency

robertmcgrath

Nov 23

I haven't been writing about cryptocurrency or Nakamoto's Happy Kingdom very much recently. There doesn't seem to be much to talk about.

But, there has been news, so here goes.

The cryptoboom of 2020 is definitely over.

Two years ago, Nakamotoland was booming. FTX (remember them) and Binance (you're heard of them recently) stood astride the globe, with millions of customers all over the world. They had fantastic valuations and seemingly beyond the reach of governments or nay-sayers.

Today, both these empires are convicted criminal enterprises, and much of their "wealth" has evaporated.

This fall from greatness was not a pretty process. Recall that the crash of FTX was started by CZ. Many think he saw SBF's influence with US regulators as a threat to Binance, and sought to take SBF down. Down he went. CZ's attack precipitated a run on FTX, which led to a crash and a century of prison time. (And far TMI about the personalities inside FTX.)

But when you walk outside the rules, Karma is a very real thing. This month Binance pled guilty to—you'll never guess—money laundering. And CZ himself pled guilty and resigned.

Will Binance survive? Billions worth of assets is fleeing, and one wonders if Binance without money laundering is a viable business.

So, let's recap.

The giant (centralized) exchanges of the Crypto boom years appear to have been built on fraud and money laundering. (Just as critics said all along.)

And, whether or not the Nakamotoan blockchain is "uncensorable", offshore exchanges turned out to be very, very much within the reach of governments.

So, what next for Nakamotoland?

The big news this fall is all about efforts to boot up legally regulated exchanges in the US. These exchanges will operate by the same rules as conventional finance and will almost certainly be owned and operated by the same people. These efforts are getting close to success.

These new exchanges aren't so much "reinventing money", they are more like creating yet another opportunity for the rich to get richer.

This is not precisely what Satoshi was intending, is it.

Sigh.

All of this raises the question, "who will will the Cryptotulip of the Year Award?"

Last year, the Cryptotulip of the Year was awarded to "Reality".

This year has been even more real. The judges will have difficulty finding much exuberance, irrational or otherwise.

Cryptocurrency Thursday