Crypto is “Monopoly money”
FTX won't be the last crypto scandal, because cryptocurrencies mirror the worst aspects of the finance industry.

The fall of Sam Bankman-Fried “serves as a cautionary tale for all those who believe that they are immune to the laws of financial gravity”, says Maximilian Marenbach on crypto.news. Bankman-Fried has been convicted of fraud by a New York court and faces decades in prison.
FTX, his cryptocurrency exchange, stole billions of dollars from customers’ deposits and illegally passed the cash to Bankman-Fried’s trading operation, where it was gambled away on high-risk cryptocurrency speculation. The “hubris” and “arrogance” that brought down FTX late last year are all too common across the tech industry.
Bitcoin, the most popular cryptocurrency, has shrugged off the scandal to rally 125% so far this year, although it is still 40% short of its November 2021 peak. Crypto enthusiasts argue that Bankman-Fried was just a bad apple, says Molly White in The New York Times. Nonsense. The lack of controls and market manipulation that once made him a billionaire are rife in the crypto industry.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Take the widespread practice of issuing a digital “token” with no inherent value, “pumping up the price” and then “using that inflated valuation” to borrow real money. Many crypto operations rest on “an imaginary foundation” of such worthless tokens. FTX won’t be the last scandal.
The FTX trial exposed the “credulousness with which millions of crypto believers”, who are generally suspicious of traditional banks and brokerages, instead entrusted their savings to cowboy outfits like FTX, says Bloomberg.
Traditional finance has its problems, but crypto – full of opaque, unregulated operations rife with “conflicts of interest” – is even worse. Most digital assets generate no income and are “fundamentally worthless” beyond their speculative value. Unless, that is, “you’re looking to launder money”.
The most promising use case for crypto might be in the huge video gaming industry, says Jon Sindreu in The Wall Street Journal. Gamers are already “immersed in a digital world” and are certainly willing to pay for “a Darth Vader suit or flashy virtual gun”. But digital bank transactions already fill that demand better than blockchain technology. Attempts to create game-based currencies have quickly succumbed to speculation, with people playing not for fun but to win tokens that can be cashed out.
Cryptocurrencies are “Monopoly money”, says Jemima Kelly in the Financial Times. The industry doesn’t create value – indeed, it arguably destroys it. Yet this “nihilistic” universe – where one user’s gain is another’s loss – only mirrors the worst aspects of the wider finance industry, where much so-called “financial innovation” is also “a game of... finding gaps in existing rules and exploiting them” until regulators catch up.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Related articles
- The cautionary tale of FTX and the future of bitcoin
- The rise and fall of Sam Bankman-Fried – the “boy wonder of crypto”
- Here’s a useful vehicle for betting on blockchain without buying cryptocurrencies
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Are UK Reits the most unloved asset?
Recent updates from UK Reits are looking more positive, but the market remains entirely unimpressed
By Cris Sholto Heaton Published
-
Side hustle tax changes: HMRC reforms could save thousands from filing self-assessment tax returns
The government plans to raise the tax-free threshold for trading income – here is how it could help your side hustle
By Marc Shoffman Published
-
Why CEOs deserve a pay rise
Opinion The CEOs of big companies often come under fire for being grossly overpaid. But the truth, as per some economists, is the opposite. Do they merit a pay rise?
By Stuart Watkins Published
-
Rolls-Royce stock jumps 15% – could it climb further?
Aircraft-engine group Rolls-Royce’s CEO has been hailed as a hero for spearheading the firm’s recovery. And the future looks bright, says Matthew Partridge
By Dr Matthew Partridge Published
-
The power of private markets
Interview Helen Steers, co-manager of the Pantheon International investment trust, tells MoneyWeek about the vast array of compelling opportunities in private equity
By Andrew Van Sickle Published
-
Vertex Pharmaceuticals is an uncommon opportunity in rare diseases
Vertex Pharmaceuticals operates in a profitable subsector and is poised for further success
By Dr Mike Tubbs Published
-
Global investors have overlooked these top tips in emerging markets
Opinion Chris Tennant, co-portfolio manager of Fidelity Emerging Markets, picks three attractive companies in emerging markets
By Chris Tennant Published
-
King Coal has not been dethroned yet — should you buy?
The demand for coal is only growing, yet investors don’t seem to want to take advantage of the opportunity, says Rupert Hargreaves
By Rupert Hargreaves Published
-
It’s time to start buying Europe again, says Merryn Somerset Webb
Opinion Europe's stocks are cheap and the economic backdrop is starting to look cheerier, says Merryn Somerset Webb
By Merryn Somerset Webb Published
-
Prosus to buy Just Eat for €4.1 billion as takeaway boom fades
Food-delivery platform Just Eat has been gobbled up by a Dutch rival. Now there could be further consolidation in the sector
By Dr Matthew Partridge Published