Almost the only topic that techies can talk about this week is the extraordinary drama at OpenAI. But a little further north, in a federal court in Seattle, another startling tale has unfolded, which has implications for another set of recently hot innovations.
On Tuesday, the Department of Justice unveiled sweeping money laundering and fraud charges against Binance, the world’s biggest crypto-trading platform, prompting its leader, Changpeng Zhao (“CZ”), to resign and pay a $50mn fine. Binance also made a $4.3bn settlement, marking “one of the largest corporate penalties in US history”, as Merrick Garland, attorney-general, triumphantly declared.
Some observers might think — or indeed hope — that this marks the demise of crypto. A year ago CZ presented himself as the clean saviour of the industry, after his ally-turned-bitter-rival Sam Bankman-Fried (“SBF”), co-founder of the FTX platform, was charged with fraud. Now, the men who were both heads of the world’s two biggest crypto exchanges are deemed criminals. This is like the moment in a spaghetti Western movie when the sheriff rides in after rival gangs have a shootout.