Crypto’s 2023 was marred by fraud and scandal. It may have been its best year ever

 

Crypto’s 2023 was marred by fraud and scandal. It may have been its best year ever

Crypto’s 14th year in existence was one marred by scandal, bankruptcy, fraud and regulatory squabbling. It still may have been the industry’s best year ever. The cast of “Crypto 2023” starred figures that are now practically synonymous with fraud: Sam Bankman-Fried, Changpeng Zhao, Alex Mashinsky, and, less prominently, Heather “Razzlekhan” Morgan and Ilya Lichtenstein (aka ‘Bitcoin Bonnie and Clyde’).

Despite all the bad press, the young industry notched some notable wins. Bitcoin, the crypto’s bellwether asset, is up 160% for the year. Two high-profile court cases came down in the industry’s favor. And a long-awaited approval for a mainstream investment product is expected in January, potentially flooding the scene with new investors.

Like the rest of the financial world, digital assets got a boost from an improving macroeconomic picture in cooling inflation, a growing economy, and a long-awaited end in sight for the Fed’s interest rate hikes. “It was the year of crypto’s resiliency,” Kyla Curley, a crypto expert and partner at global advisory StoneTurn, tells CNN.

One big component of that resiliency is how US authorities, particularly the Department of Justice, flexed their enforcement muscles on crypto, even in the absence of clear regulations. “Fraud is fraud,” Curley says, “Regardless of the technology or the industry … you cannot stop human nature. When it comes down to it, people will find a way to exploit the rules.”