Crypto Dips After Bankman-Fried Conviction, but Industry Execs Split on Impact

The conviction of Sam Bankman-Fried on fraud charges on Thursday (Nov. 2) coincided with a downturn in the cryptocurrency market, which had been recovering this year.

Over Thursday and Friday (Nov. 3), two cryptocurrencies that had been rising dropped, Bloomberg reported Friday.

Bitcoin, which had more than doubled in 2023 and approached its 18-month high, dipped as much as 3.7% over the two days, according to the report.

Solana’s SOL token, which had leaped more than 300% this year, dropped as much as 9.8% over Thursday and Friday, the report said.

The conviction and these drops came about a year after the collapse of Bankman-Fried’s crypto exchange, FTX, and a rout in the crypto market that erased $2 trillion of value from digital assets, according to the report.

Crypto industry professionals interviewed by Bloomberg had different takes on the impact that Bankman-Fried’s fraud conviction may have on the market.

Some said the closure of the year-long episode around FTX may be viewed as part of a purging of bad actors and an opportunity for the crypto market to move on, per the report.

Others said the verdict may bolster suspicions that the industry has weaknesses and attracts criminals, according to the report.

Still, others told the media outlet that the conviction spotlights the evolution of the industry and the need for regulation to keep it growing.

Other media outlets have highlighted Bankman-Fried’s past-life role as the “face of crypto” or the “crypto king,” PYMNTS reported Friday. In some cases, they attempted to draw a parallel between his fraud conviction and the uncertainty facing the digital asset sector.

Taking a different view, U.S. Attorney Damian Williams said Thursday after the conviction that the case was about “lying, cheating and stealing.”

“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history — a multibillion-dollar scheme designed to make him the King of Crypto — but while the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time,” Williams said.

During a Thursday (Nov. 2) earnings call, Coinbase Co-Founder and CEO Brian Armstrong highlighted the importance of regulatory clarity, particularly in the United States, and added that his company supports U.S. bills that aim to provide clear rules and embrace innovation.