The demise of the second largest trading platform for cryptocurrencies, FTX, acts like an earthquake of the most destructive level for the industry.

Around a million customers have probably lost a lot of money and most certainly their trust.

Their credit was not only gambled on, it was apparently also stolen from supposedly bomb-proof crypto depots.

Valuations for most cryptocurrencies and companies have plummeted after an already horrendous year for prices.

FTX founder Sam Bankman-Fried, son of the best family of law professors and courted as the savior of the crypto world, benefactor and brilliant entrepreneur, turns out to be a megalomaniac loser and fraudster every day.

The best origin does not protect against ethical neglect, one learns in the educational process.

Bankman-Fried's mother, a Stanford law professor, had called for a reform of criminal law in bold older articles: instead of looking for the guilty, it should look for solutions.

That fits the picture.

How the couple of professors came into possession of a beach property in the Bahamas valued at 16 million dollars if it was not given to them by their son Sam, who mimics permanent frugality, must be clarified in a solution-oriented manner.

As long as money was cheap, everything went well

Nevertheless, the crypto crisis is not the result of a new value relativism on the part of academic elites.

It didn't start with Bankman-Fried, and it won't end with him.

Reality is more mundane.

"When the tide recedes, it shows who's swimming naked," Warren Buffett once wisely put it.

Macroeconomic conditions, including extremely loose monetary policy, have made financing cheap and available.

Even the windiest crypto curmudgeon could hope for money from investors chasing yield and plagued by the fear of missing a trend.

As long as money didn't cost anything and was constantly flowing, the crypto ecosystem proliferated.

But the cheap money is no longer flowing.

Investors can now buy 5 percent yield trustee bonds in America.

Why should they invest in an industry teeming with capable entrepreneurs, charlatans, scammers and – highly dangerous – idealists?

In their best days in late 2021, cryptocurrencies were collectively worth $3 trillion, now just over a quarter.

Established cryptocurrencies such as Bitcoin or Ethereum lost 70 percent of their value within a year, and Coinbase shares lost more than 85 percent.

Bankruptcy rumors are floating around.

In the few years of its existence, the industry has failed to explain what it is good for.

Business models that owe their value to real-world applications remain rare.

Many crypto companies owe breathtaking increases in value to their very private inflationary monetary policies.

They mined cryptocurrencies, for which they found buyers for a long time, some of whom were crypto companies themselves.

The main fuel of the crypto bubble was low interest rates, debunking the ludicrous claim that cryptocurrencies are used to protect against inflation.

The industry's dire straits are made even more uncomfortable as FTX's demise fuels calls for additional regulation, especially as the psyches of Democratic politicians, big beneficiaries of FTX party donations, now hunger for internal cleansing.

Unfortunately, with such procedures, the baby is occasionally thrown out with the bathwater.

In fact, there is something worth preserving.

The promise that crypto will make the financial sector faster and more efficient seems at least technically viable and desirable.

The blockchain technology on which cryptocurrencies are based theoretically allows transparent transactions of all kinds that cannot be manipulated without a central clearing house.

In addition, crypto seems to be the almost natural means of payment in the metaverse, that virtual participatory world that Web 2.0 could transform into.

The baton on crypto should not be broken too soon, economic history teaches.

At the beginning of the railway and the commercialization of the Internet, adventurers and villains joined visionary entrepreneurs.

Today, however, you can even get internet on the train – at least if you disregard Germany.