Many of crypto’s greatest defenders abandon the cause amid FTX fallout
FTX was the third major crypto market to declare bankruptcy this year
TRM Labs general counsel Sujit Raman says it will be 'very difficult' to 'claw' back the money and funds lost by FTX.
The collapse of Sam Bankman-Fried's FTX crypto trading company was the nail in the coffin for cryptocurrency, according to many of the industry's onetime defenders.
The downfall of FTX heralded a mass exodus from crypto, with investors withdrawing $20 billion from global crypto trading circles in November alone, or roughly 15% of the industry, according to The Wall Street Journal.
The trend comes thanks largely to smalltime investors whose confidence in crypto has finally run dry.
"A lot of bad actors have been exposed," Nick Torrico said, a finance worker who had $10,000 invested in another now-bankrupt trading company, told WSJ. "My biggest lesson is to be patient and not try to make fast money."
EX-CRYPTO BOSS SAM BANKMAN-FRIED SLAMMED FOR COMMITTING 'PURE AND SIMPLE, GOOD OLD-FASHIONED FRAUD'
FTX CEO Sam Bankman-Fried attends a press conference at the FTX Arena in downtown Miami on June 4, 2021. (Matias J. Ocner/Miami Herald/Tribune News Service via Getty Images) (Matias J. Ocner/Miami Herald/Tribune News Service via Getty Images)
This illustration photo shows a smartphone screen displaying the logo of FTX, the crypto exchange platform, with a screen showing the FTX website in the background in Arlington, Virginia on February 10, 2022. ( Olivier Douliery /AFP via Getty Images / Getty Images)
FTX wasn't the only crypto trader to collapse this year, despite its spectacular downfall grabbing all the headlines. Voyager Digital and the Celsius Network also declared bankruptcy this summer, creating unease that the fall of FTX only worsened.
Bankman-Fried is currently in police custody in the Bahamas, where he is expected to agree to extradition to the U.S. in the near future. He faces fraud charges from federal prosecutors in New York, the SEC and elsewhere.
SAM BANKMAN-FRIED, FTX FOUNDER, CHARGED WITH FRAUD, MONEY LAUNDERING
The SEC alleges he may have misspent millions in campaign donations, the vast majority of which went to Democrats.
The cryptocurrency mogul ranked sixth on the overall list of individual donors for the 2022 midterms regarding federal contributions. According to the Washington, D.C.-based non-profit Open Secrets, Bankman-Fried’s total contributions during the midterm election cycle amounted to nearly $40 million.
(EDITORS NOTE: Best quality available) Sam Bankman-Fried, founder of FTX, left, and his mother Barbara Fried at the Magistrate's Court in Nassau, Bahamas, on Tuesday, Dec. 13, 2022. Bankman-Fried was denied bail by a judge, leaving the disgraced co-f … (Katanga Johnson/Bloomberg via Getty Images / Getty Images)
The House Majority PAC and the Senate Majority PAC together received $7 million from Bankman-Fried over the past two years, according to The Washington Post.
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Neither Democratic PAC would say whether it has plans to return any of the donations from Bankman-Fried, according to WaPo. Neither organization immediately responded to a request for comment from Fox News Digital.
Fox News' Danielle Wallace contributed to this report.