Cryptocurrencies surge in value by more than half a trillion despite controversy

Sam Bankman-Fried was found guilty in November of seven counts of fraud, embezzlement and conspiracy. Photo: Angela Weiss/AFP

These include the collapse of FTX, the world's second-largest cryptocurrency exchange, at the end of 2022. The offshore trading house was found to have misused client funds to support high-risk investments and executive luxury goods purchases.

Company founder Sam Bankman-Fried was found guilty in November of multiple fraud and conspiracy charges that led to FTX's bankruptcy.

That same month, the founder of Binance, the world's largest digital coin exchange, agreed to plead guilty to criminal charges in a case brought by the US Department of Justice for money laundering violations.

>Changpeng Zhao said he would step down as CEO of Binance as part of a deal with prosecutors, and the exchange itself was fined $4 billion.

Changpeng Zhao pleaded guilty to criminal charges in a case brought by the US Department of Justice for money laundering violations. Photo: Chloe Collyer/Bloomberg

Despite the scandals, however, Matteo Grecco, an analyst at cryptocurrency investment firm Fineqia, said the Binance shakeup had a “positive impact on the market.”

“The agreement between the largest digital asset exchange and US regulators has reduced uncertainty, contributing to a more optimistic outlook,” he said.

Regulators have also tightened their stance on digital coins. In the UK, the Financial Conduct Authority introduced new rules in October on how cryptocurrency companies can market their services to UK consumers, ultimately blocking Binance from attracting new UK customers.

In the US, Coinbase, one of the largest digital currency exchanges with a popular app, has filed a lawsuit against the US Securities and Exchange Commission.

The regulator accuses Coinbase of selling digital currency. coins as unlicensed securities. Coinbase has disputed the claims and insists it is not selling securities.

Amid the crackdown, Coinbase shares have risen more than 400% in 2023.

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