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Cryptocurrencies like Bitcoin soar despite brutal times: NPR

A Bitcoin ATM is seen in Brooklyn, New York on June 13, 2022. Virtual currencies like Bitcoin are recovering from a tough time, thanks in part to growing hope that bad actors have been weeded out and trust can return to the sector.

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A Bitcoin ATM is seen in Brooklyn, New York on June 13, 2022. Virtual currencies like Bitcoin are recovering from a tough time, thanks in part to growing hope that bad actors have been weeded out and trust can return to the sector.

Michael M. Santiago/Getty Images

After a tumultuous period, cryptocurrencies are experiencing a strong recovery.

Crypto has been reeling since the collapse of several major companies in 2022, including FTX, which had become one of its largest and most recognized players.

Its failure worsened the so-called “crypto winter” that propelled bitcoin to around $16,500, a sharp decline from its record high of around $68,000 on November 8, 2021.

But something remarkable has happened since FTX CEO and founder Sam Bankman-Fried was convicted in November: Bitcoin and other cryptocurrencies have made an impressive comeback. Bitcoin, for example, climbed above $43,000.

“There was uproar,” says Helen Gugel, a partner at the law firm Ropes & Gray. “But I think there are also reasons to be optimistic.”

Here’s a look at crypto’s turbulent times – and why things seem to be looking up.

Eliminate Bad Actors

It was a blockbuster trial – and it ended badly for Bankman-Fried.

He was found guilty on all seven counts he faced, marking a stunning fall from grace for someone who was once considered “the golden boy of crypto.” Bankman-Fried now faces spending the rest of his life in prison.

Then, a few weeks later, Attorney General Merrick Garland announced a major plea deal with another crypto giant as part of an ongoing crackdown on the industry by regulators and law enforcement.


Former FTX CEO Sam Bankman-Fried arrives for a bail hearing in Manhattan Federal Court in New York on August 11, 2023. Two of crypto’s most prominent players have faced legal issues This year. Bankman-Fried was found guilty of all criminal charges and faces life in prison. Meanwhile, Binance CEO Changpeng Zhao pleaded guilty to violating anti-money laundering rules.

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Former FTX CEO Sam Bankman-Fried arrives for a bail hearing in Manhattan Federal Court in New York on August 11, 2023. Two of crypto’s most prominent players have faced legal issues This year. Bankman-Fried was found guilty of all criminal charges and faces life in prison. Meanwhile, Binance CEO Changpeng Zhao pleaded guilty to violating anti-money laundering rules.

Michael M. Santiago/Getty Images

Under the settlement, Binance agreed to pay $4.3 billion in fines, while its founder, Changpeng Zhao, widely known as CZ, gave up his CEO title and pleaded guilty to violated anti-money laundering laws. He also agreed to pay a $50 million fine.

Bankman-Fried’s conviction and regulators’ pledge to continue cracking down on an industry they view as rife with fraud could have been seen as a negative spotlight on an entire industry.

Instead, many crypto advocates saw this moment as a good thing – a time when confidence in crypto could return now that the high-profile bad actors had been eliminated.

Cryptocurrencies surged shortly after Bankman-Fried’s conviction, and survivors of the cryptocurrency winter also benefited: shares of Coinbase, another major cryptocurrency exchange under scrutiny regulatory, have increased by more than 400% this year.

Making Bitcoin a mainstream investment

There is another key reason behind crypto’s comeback.

This year, several prominent financial firms, including BlackRock and Fidelity, have asked the Securities and Exchange Commission to approve a Bitcoin spot ETF.

Exchange-traded funds have gained popularity among regular investors. These are funds that track the performance of a particular index or asset.

An S&P 500 ETF, for example, simply tracks the gains and losses of the S&P 500. These funds are intended to reduce fees since investors generally do not pay fees to fund managers.

A spot Bitcoin ETF would track the price of the cryptocurrency and allow investors to hold it in their portfolios through an investment fund, instead of having to pay more than $43,000, or the price at which bitcoin is currently being negotiated.


Securities and Exchange Commission (SEC) Chairman Gary Gensler has taken on crypto industry players and sought to get companies to follow Wall Street’s rules.

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Securities and Exchange Commission (SEC) Chairman Gary Gensler has taken on crypto industry players and sought to get companies to follow Wall Street’s rules.

Drew Angerer/Getty Images

After several delays, the SEC could make a decision on whether to authorize a spot bitcoin ETF in January. But it is far from guaranteed that the regulator will approve it. The SEC has rejected previous requests, arguing that the cryptocurrency market is too easily susceptible to manipulation.

But an investment company called Grayscale Investments sued the SEC, and a court agreed that the regulator was wrong to reject its request.

This reinforced optimism that the SEC would approve it this time around, which could be a game-changer, helping to solidify the legitimacy of the digital currency.

“That would potentially open the door to a lot of people saying, ‘Look, I’m not buying this whole crypto thing, but bitcoin seems interesting,'” says Wharton professor Kevin Werbach.

But regulators are still wary of crypto

Cryptocurrencies may be recovering, but regulators are not embracing them in any way.

The SEC has filed lawsuits against some of the biggest names in crypto, including Coinbase and Kraken. And notably, the SEC was not part of this major agreement with Binance. The market regulator has filed 13 charges against the crypto firm and CZ, alleging they misled investors, and these suits will continue to move forward.

SEC Chairman Gary Gensler has long been wary of crypto, comparing it to the “Wild West” and there is no sign he has changed his mind.

In the coming year, Wharton’s Werbach expects to see more crypto-related enforcement actions.

“It takes time to build these cases, especially the big ones against these big players that are theoretically not based in the United States,” he says.

Tensions between regulators and crypto companies have continued to grow due to the lack of clear rules regarding digital currencies. Gensler made it clear that he believed most of them were headlines and therefore within his agency’s purview.

Ultimately, Congress could decide how crypto should be regulated and whether it should be treated like stocks, bonds, commodities, or something completely different — as crypto advocates want.

But with an election year in 2024, there is little chance of seeing meaningful regulation in the coming year.

So, crypto may be making a comeback, but the fight against the industry from regulators and law enforcement appears far from over.

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