The cryptocurrency industry should use innovation to regain lost trust
Live MintThe vertiginous fall of Sam Bankman-Fried—the disgraced founder of the cryptocurrency exchange FTX who was recently convicted of fraud and money laundering in New York—has cast a harsh light on a largely unregulated market. Unfortunately, grifters and unscrupulous companies have exploited customers and investors enamoured with the new technology and, in the process, obscured crypto’s most compelling innovation: blockchain-enabled tools that can improve transparency and strengthen the trustworthiness of the financial sector. Most crypto holders today store their assets in exchanges that require high levels of trust and carry many of the risks of traditional financial institutions. To be sure, the crypto industry faces several daunting challenges: the large environmental footprint of Bitcoin mining, its use for illicit transactions, privacy shortcomings and more. But, as proof of reserves suggests, the crypto community is innovating powerful new ways to harness the inherent transparency and trustworthiness of blockchain technology to create a more secure and flexible financial ecosystem.
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