The recent downfall of Sam Bankman-Fried, the former CEO of the collapsed crypto exchange FTX, has significant implications for the industry. While Bankman-Fried has been found guilty of fraud and faces a potential prison sentence, this does not signify the end of the crypto industry. Bitcoin and Ethereum have already established themselves as asset classes for younger investors, much like gold is for older generations.The evidence against Bankman-Fried was overwhelming, with three of his closest employees testifying against him. He was accused of redirecting billions of dollars from FTX to his controlled hedge fund, Alameda Research, through reprogramming the exchange’s software. Bankman-Fried allegedly misappropriated customer funds for speculative crypto trading, real estate purchases, sponsorships, and political lobbying.Despite attempts by his defense to portray him as an overworked math genius who made mistakes, Bankman-Fried’s actions were seen as systematic fraud. His supposed humility and philanthropic image as an advocate of “effective altruism” were ultimately seen as a facade.However, it is important not to view Bankman-Fried’s downfall as a condemnation of the entire crypto industry. The fate of the industry will be determined not in a New York courtroom but rather in Washington, at the headquarters of the U.S. Securities and Exchange Commission (SEC). The decision of whether to allow Bitcoin ETF funds is of much greater significance than the outcome of this trial.For many younger investors, crypto has already established itself as an alternative asset class, much like gold is for older generations. While investing in crypto assets may require some magical thinking, many individuals want to be able to access these assets through secure platforms or their traditional banks.The approval of Bitcoin financial products for the mainstream, such as ETFs, would be a significant milestone. This would accelerate the adoption of crypto assets by established asset managers, allowing banks to provide access to crypto assets without having to hold them themselves.The recent surge in the price of Bitcoin in recent weeks had little to do with the FTX trial, but rather with the hope for a positive decision from the SEC regarding ETFs. The institutionalization of crypto assets is progressing, even in Switzerland. While major providers like UBS, Raiffeisen, and ZKB still have reservations about crypto as an asset class, it is the cantonal banks, such as those in Luzern, Zug, and St. Gallen, that see opportunities in this space.In conclusion, the downfall of Bankman-Fried and FTX is not a definitive judgment on the future of the crypto industry. The industry’s fate will be determined by regulatory decisions and the willingness of banks and asset managers worldwide to incorporate crypto assets like Bitcoin and Ethereum into their product offerings.

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