Is the FTX fiasco crypto's 'Lehman moment'?

Recent interventions by governments and authorities around the globe indicate that tougher regulation of digital assets is the direction of travel. Kate Gee and Tom Crawford explore these developments, as well as whether the alleged FTX fraud could act as a catalyst.

Kate Gee(kate.gee@signaturelitigation.com) is counsel at Signature Litigation, a specialist disputes firm.Tom Crawford (tom.crawford@signaturelitigation.com) is an associate with the firm.

The implosion of FTX reveals a disastrous convergence of lack of expertise, ignorance of corporate duties, due diligence failings, as well as a disregard for red flags. Its immediate legacy is one of significant reputational damage that goes beyond the individuals and companies directly involved, tainting the global crypto industry. And it is yet another reminder to regulators and legislators of the absence of effective regulation in the sector, with the subsequent risks to investor and consumer protection that this entails.