Nothing Redeems Crypto

Cryptocurrencies were already failing when FTX’s malfeasance came to light in November, but the company’s collapse accelerated the coming of the crypto ice age. The status quo became impossible to defend, and the consensus on how to proceed has settled on two possibilities. One sees FTX as an example of why crypto needs more regulation. The other refuses to grant crypto the halo of regulation and argues it should be left to burn.

Thanks to industry lobbying, discussions about regulation are already under way. It would likely require Securities and Exchange Commission registration for most crypto coins and exchanges and eliminate stablecoins that aren’t effectively money-market funds. This would largely clear the crypto landscape in the U.S., leaving only Bitcoin, Ethereum and stablecoins that are completely fiat-backed.