Yat Siu, cofounder and executive chairman of Hong Kong-based blockchain investor Animoca Brands, said Sam Bankman-Fried’s conviction for orchestrating a multibillion dollar fraud at his FTX crypto exchange should mark the end of an era of unlawful practices in the industry and help to get the crypto markets onto a more solid foundation.

“One of the problems that we’ve had, narratively, is that sometimes people thought it wasn’t Sam Bankman-Fried, but it was the crypto industry,” Siu said Friday during an interview on the sidelines of Hong Kong’s Fintech Week. “This judgment makes it absolutely clear that this was just simply a case of a fraudulent person who did bad things. It’s the end of a chapter, and we can move on, and the industry can also properly heal.”

Bankman-Fried, the founder of FTX, was found guilty a day earlier of stealing billions of dollars from the users of his crypto exchange, in what prosecutors have called one of the biggest financial frauds in American history. The 31-year-old was convicted of seven charges of fraud and conspiracy, which together carry a maximum sentence of 110 years. The verdict came a year after FTX had filed for bankruptcy in a swift corporate meltdown, which saw the majority of Bankman-Fried’s estimated net worth of $26.5 billion evaporate within days.

“So many bad actors in the past have gotten away. It gave the crypto industry a bad rap,” Siu said. “But now the industry is showing that bad actors can’t get away.”

Animoca Brands on Monday announced that it had raised $50 million from Neom Investment Fund, which is tied to Neom, the controversial urban megaproject launched by Saudi Arabia’s Crown Prince Mohammed bin Salman. Half of the funds will come from issuing convertible notes and the rest will be via a share sale on the secondary market (Animoca Brands’ stock trades on PrimaryMarkets, an Australian private secondary share trading platform). Animoca Brands’ latest fundraising round valued the company at $5.5 billion, Siu said, down from $5.9 billion in September last year, when the company secured $110 million from investors including Temasek.

The financing comes after a recovery in the prices of bitcoin and other cryptocurrencies, which have staged a strong rebound from last year’s crash. Bitcoin, the largest cryptocurrency by market cap, has seen its price double since last November, when the FTX meltdown unfolded, according to tracker Coingecko. The rally was sparked in part by speculation that the U.S. regulators may soon approve exchange-traded bitcoin funds.

Despite the recent rebound of bitcoin, the crypto industry is still down more than 55% from its peak in November 2021. But Siu said there are still plenty of reasons for optimism about the future of the industry. “I think mainstream adoption is coming in the next 12 to 18 months. It’ll be coming from gaming, it’ll be coming from education,” he said. “If you actually go into Web3, and you visit it properly, and you try out the services, and you see what it’s about, you go into this rabbit hole, you come out convinced, you don’t come out saying it’s ‘bullshit.’”

Founded in 2014, Animoca Brands develops blockchain games and has built a portfolio of more than 400 blockchain-related investments as of October. The company said it has recently expanded its business to offer “Web3 services,” including game production and advisory on crypto token listings.

MORE FROM FORBES

Read the full article here

Share.
Exit mobile version