The past year has been quite eventful for the crypto industry. From funding shortages to the public spectacle of the SBF saga, the industry and its supporters endured a tumultuous year, marked by crypto price volatility akin to London’s unpredictable weather in April.
Regulation of crypto and its enforcement took center stage in the industry’s collective consciousness. As attention turns to the upcoming Presidential elections in 2024, many within the crypto sector express optimism for the prospect of clearer regulatory guidelines in the near future.
“2023 has certainly seen its share of controversies, albeit serving as a respite from the crypto winter and fallout from the FTX and LUNA crash in 2022,” remarked Jack Vinijtrongjit, co-founder and CEO of web3 infrastructure company AAG, speaking to TechCrunch+.
Following multiple high-profile scandals in 2022, this year witnessed the U.S. government’s consequential response. The month of November alone proved eventful: FTX’s former CEO, Sam Bankman-Fried, was convicted on seven fraud charges, and shortly after, Binance’s CEO, Changpeng Zhao, resigned after pleading guilty to multiple charges filed by U.S. agencies for non-compliance with the country’s regulations.
“The industry should not bear the brunt of [Bankman-Fried]’s actions,” noted Anthony Sabino, a law professor at the Peter J. Tobin College of Business at St. John’s University. While emphasizing that the former FTX CEO’s conduct should not reflect on the broader industry, Sabino acknowledged that the fallout from FTX’s bankruptcy would prompt regulators to preempt future occurrences and deter bad actors.
“In the long run, holding bad actors accountable is beneficial for an industry, including blockchain,” stated Adam Ettinger, partner at law firm FisherBroyles. “Yet in the immediate term, individuals want to avoid explaining at family gatherings that their startup is entirely distinct from Celsius or FTX.”
Nevertheless, there is a widespread desire within the industry for greater transparency from the government and regulators regarding regulations and definitive guidelines.
Mixed signals
“This year, we’ve encountered consistent and conflicting messages from the government,” observed Ettinger. “While the SEC initiated 26 enforcement actions related to digital assets, we also have members of Congress who recognize the significance of blockchain innovation and advocate for regulating the technology in a manner that supports entrepreneurs and prevents their exodus abroad.”