This week’s investor run on the FTX crypto-currency exchange marks round two of the great crypto crackup, and so far the victims are consenting adults. Barring an unexpected spread to the banking system, this is another in the long line of easy-money manias turned to panic.
FTX CEO Sam Bankman-Fried has been the crypto industry’s leading champion. This year he engineered bailouts of several troubled crypto firms, including lenders Voyager Digital and BlockFi Inc., as plunging digital asset values exposed bad bets and computer coding. Recall the May collapse of stablecoin TerraUSD, whose stable value was based on an algorithm.