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Andy Mukherjee

FTX’s Sudden Unraveling May Allow DeFi to Grow

The crypto exchange’s founder was throwing his weight behind regulation that would have helped his bourse while undermining decentralized finance.

Sam Bankman-Fried testifies in Washington.

Sam Bankman-Fried testifies in Washington.

Photographer: Sarah Silbiger/Bloomberg 

If you are cryptocurrency’s version of John Pierpont Morgan, you stake your fortune to save the industry. Not out of kindness, but to shape the regulatory landscape in a way that your firm becomes the tallest tree in the forest for all time to come. Sam Bankman-Fried of crypto exchange did the bailouts with aplomb last summer. It’s in lobbying Congress that SBF — as the 30-year-old is known — botched things up. 

By trying to influence the crypto policing regime in a way that would bolster exchanges like his but undermine digital protocols of decentralized finance, he must have upset rival billionaire Changpeng “CZ” Zhao enough for the latter to pull the plug on his former disciple.