But there’s another mystery that faces the Securities and Exchange Commission, which charged Bankman-Fried with fraud on Tuesday: How much real money was ever involved?
Even die-hard crypto bros will have to admit they know what I mean by “real money”: it’s that flimsy, magical construct backed by government imprimatur that we all call fiat currency. Actual dollars, euros and yen. To me, this is one of the most interesting questions that’s far from being answered about the entire crypto bubble. Peak valuation of crypto assets was $3 trillion, but much of that amounts to little more than a high score in a computer game. What was the base money, the real-world cash — which despite rampant inflation we all agree still has a relatively stable value — that was sucked into the crypto machine?
Source: The FTX Meltdown May Have Been Limited by the Real Cash Value Involved. – Bloomberg