The past year has been one of uncertainty, drama and then rejuvenation in the cryptocurrency world. Yahoo Finance UK looks back at the key personalities that shaped the landscape of the burgeoning web3 sector in 2023.
The past year has been witness to a rapid rebound for bitcoin, the largest digital asset by market capitalisation. Bitcoin has rallied by more than 170% since January, bringing much of the rest of the cryptocurrency market along with it.
Read more: Bitcoin is up — and the zealots are back
However, the crypto sector in 2023 was in recovery mode after a series of scandals from 2022 eroded investor confidence.
One of the most prominent being the collapse of FTX, one of the world’s leading cryptocurrency exchanges. This downfall led to the conviction of FTX’s founder, Sam Bankman-Fried, for fraud and money laundering.
The fall of Samuel Bankman-Fried
In November, Sam Bankman-Fried, the 31-year-old founder and former CEO of FTX, was found guilty at a court in New York of seven counts of fraud and money laundering – marking a stunning fall from grace for a young man once hailed as the King of Crypto.
The verdict came less than a year after FTX, once one of the world’s largest cryptocurrency exchanges, filed for bankruptcy following a series of revelations about its questionable business practices.
Read more: Bitcoin slumps as US to proceed with initial charges against Sam Bankman-Fried
Bankman-Fried’s meteoric rise began in 2019 when he launched FTX, a cryptocurrency exchange that quickly gained popularity among traders and investors. FTX reached a valuation of over $30bn at its peak.
However, Bankman-Fried’s empire crumbled in November 2022 when news broke that FTX had been engaging in a variety of illegal activities, including loaning customer funds to Alameda Research, a hedge fund that he also operated, without their knowledge or consent.
These revelations sparked a bank run on FTX, forcing the exchange to file for bankruptcy and leaving investors with significant losses.
Read more: Sam Bankman-Fried ‘to break his silence’ over catastrophic FTX collapse
Bankman-Fried’s trial, which lasted less than a month, centred on the alleged misuse of customer funds and the creation of a fraudulent scheme to inflate the value of FTX’s own cryptocurrency, FTT. After a swift deliberation, the jury found him guilty of all charges.
His conviction sent shockwaves through the cryptocurrency world, shaking investor confidence and highlighting the need for stricter regulatory oversight.
Changpeng ‘CZ’ Zhao steps down as Binance CEO
Changpeng ‘CZ’ Zhao, the former CEO of Binance, had been a driving force behind Binance, the world’s largest cryptocurrency exchange. However, Zhao’s meteoric rise was marred by controversy.
In November 2023, he pleaded guilty to a charge of failing to maintain an effective anti-money laundering programme. The plea came as Binance agreed to pay over $4bn as part of a settlement with the US government.
The charge stemmed from revelations that the Binance cryptocurrency exchange was being used to launder illicit funds. The US Department of Justice said the exchange had failed to implement adequate measures to prevent this activity, exposing its users to the risk of being associated with criminals.
Read more: Bitcoin falls on Binance fraud charge fear
Following the charges, Zhao stepped down as CEO of Binance and pleaded guilty to breaking US anti-money laundering laws.
The deal with the US Department of Justice will see Zhao personally pay $50m, described by prosecutors as one of the largest corporate penalties in US history.
Vitalik Buterin oversees significant ethereum development
In 2023 Vitalik Buterin, the co-founder of ethereum (ETH-USD), oversaw transformative developments for the world’s first ‘smart contract’ blockchain.
In April 2023, the Ethereum Shanghai upgrade (EIP 1559) addressed transaction fee issues and network congestion, making the blockchain’s native token, ether, more deflationary. Ether’s price rose steadily throughout the year, gaining over 83% since January.
Read more: Solana: Why Ethereum’s lesser known rival is steadily rising
The development reflects the blockchain’s growing network engagement, staking activities, and the influence of decentralised finance, or DeFi.
Gary Gensler steers US regulatory reaction to crypto
Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), has overseen the regulatory reaction to the cryptocurrency sector in the US.
However, Gensler has taken a firm approach to the innovations coming from the burgeoning industry. The SEC’s role in safeguarding US investors and regulating the extensive US capital markets,
Industry observers have studied Gensler’s comments and actions throughout the year to ascertain whether he is relaxing his critical stance on the sector. Ultimately, Gensler will be responsible for how the US enforces securities laws on the cryptocurrency industry.
Critics of the SEC chair have argued for clearer rule-making for the industry and even the adaptation of existing securities laws to fit the innovations coming from the sector. However, there has been no sign that Gensler will deviate from existing rules and regulations when it comes to crypto.
MicroStrategy’s Michael Saylor champions bitcoin as ‘digital gold’
Michael Saylor, the executive chairman and co-founder of MicroStrategy, has overseen MicroStrategy’s stock surging by 275% in 2023. The tech firm’s stock is mirroring the upward trajectory of bitcoin (BTC-USD).
In a recent announcement, MicroStrategy (MSTR) revealed its ownership of about 158,400 bitcoins, making up nearly 0.7% of the circulating supply as of early December, which amounts to approximately $6.5bn worth of BTC.
In November, MicroStrategy made its largest bitcoin purchase to date, acquiring over $593m worth of BTC. The company’s stock surge, which has risen by 250% this year, has outperformed bitcoin, reflecting its investment in both software and BTC. Saylor anticipates further gains for bitcoin, particularly upon the approval of spot ETF products.
As the industry navigates its way into 2024, the legacy, and future actions, of these personalities will shape the future of the cryptocurrency landscape.
Watch: UK law gives legal weight to tech underpinning web3 innovations | The Crypto Mile
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