Cryptocurrency

FTX Crypto exchange collapse

Victor Moche, '25

On November 11, 2022, cryptocurrency exchange FTX filed for bankruptcy, sending shockwaves throughout the crypto market. After a surge of customer withdrawals earlier in the month that the company could not fulfill, FTX's thenCEO, Sam Bankman-Fried, admitted that the company did not have sufficient assets in reserve to meet customer demand. The admission was a blow to the reputation of the up-and-coming exchange, which had gained a strong influence within the crypto world The news of FTX's bankruptcy filing astounded many traders and investors who had relied on the exchange for their trading needs The price of several cryptocurrencies, including Bitcoin and Ethereum, fell drastically in response The bankruptcy filing also raised questions about the overall health of the cryptocurrency market Some experts thought that FTX's collapse could be a forewarning of a broader crypto crash, while others saw it as an isolated incident. Due to the bankruptcy, customers of the exchange were left scrambling to recover their funds. The exchange had promised to return all customer assets, but it remained uncertain how long the process would take The incident also led to an increased examination of cryptocurrency exchanges and oversight Some observers argued that the industry needed more decisive leadership to prevent similar incidents in the future. For Sam Bankman-Fried, the bankruptcy was a humbling experience. The former CEO had built a reputation as a crypto whizkid. Still, the collapse of the exchange was a stark reminder that even the most innovative people are not immune to failure.

Growth Struggles in the MetaVerse

Jesse Rubenstien, '25

Mark Zuckerburg, the multi-billionaire who owns Meta Platforms Inc. (META), announced early this year that his company Facebook would be a “metaverse” company. He hoped to create a virtual and augmented world where billions of people would work, play and socialize. Meta has spent billions of dollars toward this goal. But since Zuckerberg announced Facebook is going Meta, they have had a shaky start

The company's stock has tumbled nearly 60%, but what has happened?

Meta’s metaverse, Horizon Worlds, had seen little engagement, with the metaverse’s potential still unknown Meta plans to release a new VR headset in the near future, along with other metaverse features Even Meta’s employees don’t know what they are working on and don’t even use their product In September, Vishal Shah, the vice president of Meta’s metaverse division, said, “Why don’t we love the product we’ve built so much that we use it all the time? The simple truth is, if we don’t love it, how can we expect our users to love it?” Shah said it very clearly himself, the metaverse isn’t well made and

Still Needs A Great Amount Of Development

Another challenge for Meata is creating a sustainable business model While some companies can generate revenue through advertising or virtual item sales, it is unclear how profitable a metaverse can be over the long term Additionally, concerns about privacy and data security in a fully immersive virtual world could further complicate the development and adoption of metaverses Especially with Tiktok bringing in more and more young users from Instagram and Facebook Metas leading money makers. As well as Apple making privacy changes to their mobile operating system.

Finally, if Zuckerberg wants the metaverse to start creating revenue and really get a jump start on the future in technology they need to advance fast. The fab of the metaverse is coming to a close and Meta really needs to figure out how to make the metaverse enjoyable and profitable

The New Crypto

Ilan Puterman, '23

Cryptocurrencies have been gaining popularity in recent years, thanks to their decentralized nature, anonymity, and potential for high returns However, as their usage has increased, governments and regulatory bodies worldwide have become increasingly concerned about their potential for misuse in illicit activities such as money laundering and terrorism financing In the United States, regulatory pressure on cryptocurrencies has been mounting, with several recent events highlighting this trend

One of the most significant recent events was the Securities and Exchange Commission's (SEC) lawsuit against Ripple Labs, the company behind the XRP cryptocurrency. The SEC alleges that Ripple conducted an unregistered securities offering worth $1.3 billion through the sale of XRP. Although the lawsuit is ongoing, the case highlights the SEC's increased scrutiny of cryptocurrency companies and their offerings.

Apart from the SEC, other U.S. regulatory bodies have also been scrutinizing cryptocurrencies more closely The Financial Crimes Enforcement Network (FinCEN) has proposed a rule that would require cryptocurrency exchanges to collect and report information on transactions involving more than $10,000 in cryptocurrency This proposed rule aims to combat money laundering and other illicit activities and subject cryptocurrency exchanges to the same reporting requirements as traditional financial institutions

The Internal Revenue Service (IRS) has also updated its tax forms to include a question about cryptocurrency holdings, indicating that it is taking a more proactive approach to enforcing tax compliance in this area. The agency also sent letters to more than 10,000 taxpayers who had engaged in cryptocurrency transactions, warning them of the potential tax implications

Finally, the U S Treasury Department has also been ramping up its efforts to combat illicit activities involving Treasury's Office of Foreign Assets Control (OFAC) added two individuals and two cryptocurrency addresses to its list of Specially Designated Nationals and Blocked Persons (SDN List) for their alleged involvement in laundering ransomware payments This move was seen as a warning to the cryptocurrency industry that regulators are taking a more aggressive stance on illicit activities involving cryptocurrencies In conclusion, regulatory pressure on cryptocurrencies in the United States is increasing, with several recent events highlighting the trend Although some cryptocurrency advocates argue that excessive regulation could stifle innovation in the industry, others see increased regulation as a necessary step to ensure the long-term viability of cryptocurrencies and protect consumers from fraud and other illicit activities. As the cryptocurrency industry continues to evolve, it will be important to strike the right balance between innovation and regulation