FTX, Sam Bankman-Fried, and the Cryptoexchange Problem

The aim of this paper is to contextualize the collapse of FTX in light of the deeper problem of cryptoexchanges. Within the domain of cryptocurrencies, whose technological basis is imbued with trustlessness and decentralization, cryptoexchanges are in fact premised on human agency and trust, and thus vulnerable to frauds, scams, hacks, and other dangers of financial activity of a decidedly human nature. The paper argues that the conflating of cryptocurrency traits with cryptoexchange mismanagement is partially responsible for the damage dealt to the now aggrieved investors, and finds that cryptoexchanges are a domain where tough and proactive regulatory oversight is urgently required