Republished with full copyright permissions from The San Francisco Press.

It’s been a tumultuous period for the cryptocurrency industry, with a series of events casting a shadow on its future. The recent legal developments involving FTX founder Sam Bankman-Fried and Binance have rattled the once buoyant crypto world.

FTX customers are anxiously awaiting the return of their funds, while Celsius Networks, a company that claimed to offer greater security than traditional banks, is offering a mere 67 cents on the dollar in its bankruptcy aftermath. In addition, regulatory bodies have continued to grapple with the complexities of cryptocurrency ETFs, with the SEC’s indecision leaving the crypto market in a state of uncertainty.

The legal and financial woes facing cryptocurrency may signify a critical turning point. The $4.3 billion settlement and guilty plea by Binance, the world’s largest crypto exchange, has brought to light the stark centralization within the crypto industry. Despite proponents touting decentralization as a cornerstone of cryptocurrency, the reality is that a few major players dominate the market, raising questions about the genuineness of the industry’s ideological underpinnings.

The Binance settlement exposes a vulnerable underbelly, presenting a unique opportunity for governments, particularly the U.S., to exert influence and steer the sector into more regulated waters. The exits of prominent figures such as Bankman-Fried and Binance’s Changpeng Zhao may pave the way for a shift towards a more institutional approach, integrating blockchain technology into existing financial structures.

Notably, established finance figures and institutions have shown an increasing interest in the crypto space. Former NYSE President Tom Farley’s acquisition of CoinDesk and pursuit of FTX’s assets, combined with BlackRock’s foray into Ethereum, signal a potential alignment between traditional finance and the blockchain. Moreover, the emergence of new crypto ventures in the aftermath of legal battles offers a glimmer of hope for the embattled industry.

The Binance settlement could also alleviate the need for sweeping cryptocurrency-specific legislation, according to some political insiders. There is a growing sentiment that existing frameworks could be sufficient, given the demonstrated ability to address illicit activities within the crypto sphere through enforcement actions.