> I'm a little worried that if we penalise financial innovation harshly like this (prison!) we will never get the next bitcoin, bitcoin 3.0 if you will.

Haha, Hal Finney (the recipient of the first bitcoin transaction, and probably even Satoshi Nakamoto himself) wrote about this idea 11 years ago:

"Any successful replacement of the Bitcoin block chain will forever undermine the credibility of any successor. How is an investor to know that it won't happen again?" — Hal Finney

https://bitcointalk.org/index.php?topic=10666.msg152988#msg1...

I disagree. If we punish financial innovation like this then maybe we'll get innovation that doesn't facilitate egregious scamming like this.

I don't happen to see why financial innovation has to require a complete disregard of all that has gone before it and a presumption that astonishing naivety and hubris are entry requirements. But then, what do I know.

Nobody is talking about penalizing innovation. FTX misappropriated their customers assets. If they hadn't done this SBF wouldn't be risking prison time (probably).

I'm honestly not sure that's a bad thing; bitcoin has been pretty horrendous for the planet on a number of fronts and I'm not sure I've actually seen any value yet.

the silk road was pretty valuable before the government got in the way

Good?

The "innovation" here was taking money from your customers, failing to account for it, and then losing it.

Financial innovation? Hegestratos was conducting fraud in 300 B.C.

The good ones go into the pot, the bad ones go into the crop.

This is how the state does a new thing in. He lets it run wild. And if it can self-contain and restrain, have a concept of governence and self-regulation, you will get away with a lot. But crypto did not.

Crypto did not pass the test, the only thing it was good at, was destabilizing the aristocracy of totalitarian governments, by offering them monetary escape routes.

So the tech will life on in the belly of the financial institutions, the rest, well nothing of value was lost.

Fraud is not innovation.

This is the cryptobro equivalent of claiming, "If we don't allow murder then we won't be able to kill the next baby Hitler." There's much better arguments to make than this one.

Godwin's law invoked. Sigh.

Are you serious?

What a tragedy.

SBF : Cryptocurrency :: Bernie Madoff : Stocks

Madoff did less damage and had the decency to push off shortly after.

SBF and his Smegol counterpart will be around as long as they can avoid the people who didn't have the funds to lose.

Ohh the horror

Lumping all fintech innovations into either "good" or "bad" buckets is ignorant of nuance:

0. Can the business model be made sustainable long-term?

1. Does it create value for almost all participants?

2. Is it secured by governance, policies, tech, and auditing (internal and external) from malicious actor(s)?

If the answer to any or all is "no", then it's probably a variant pyramid scheme.