Dramatic Collapse of FTX Cryptocurrency Exchange, Fraud and Regulatory Gaps Shock Global Finance

In November 2022, one of the U.S.'s most high-profile cryptocurrency exchanges, FTX, suffered a dramatic liquidity crisis and filed for bankruptcy, with its founder, Sam Bankman-Fried (SBF), subsequently facing fraud charges. The collapse shocked global financial markets, causing massive losses for hundreds of thousands of users and investors, and exposing significant gaps in transparency and oversight within the crypto industry.

The events, unfolding between the Bahamas and Washington D.C., spurred profound reflection on the lack of regulation for digital asset trading platforms. For conservatives, who generally advocate for less regulation, the FTX collapse presented a complex debate regarding market integrity and consumer protection. Many criticized SBF’s fraudulent actions while warning regulators against using the incident to unduly expand their power over the digital asset sector at the expense of financial innovation.