St. Louis Post-Dispatch
Back in 2001, precious few Americans could have explained what Houston-based Enron did as a company and how it got so spectacularly wealthy. But when it filed for a record-breaking bankruptcy, Americans got schooled fast about not putting their trust and money behind swaggering, fast-talking con artists.
We suspect that a lot of investors who lost their shirts in the FTX failure would have trouble explaining exactly what FTX did, and that's largely because the entire cryptocurrency industry is built on fantasy.
Even the person in charge of the company, Sam Bankman-Fried, didn't understand it completely. "I didn't know exactly what was going on," he told The New York Times last week. A year ago, Bankman-Fried was worth an estimated $26.5 billion. Today, the 30-year-old might have around $100,000 in assets. "I've had a bad month," he told The Times.
Former President Bill Clinton was among the prominent personalities who got burned by associating themselves with FTX. To his credit, though, Clinton gave a talk at the FTX headquarters in the Bahamas reportedly warning all involved to "do right by it in the regulatory space," meaning to make sure FTX operations abided by U.S. securities and banking regulations.
Because the industry took off way before U.S. regulators could catch up, it's not clear what they can do now to hold FTX officials legally accountable. That shouldn't stop Congress from trying.