Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 486

Is it finally time to move on from crypto after FTX?

In 1974, stories filtered through of a Japanese soldier who was in the Philippines still fighting World War Two because he was convinced that the war had never ended. The stories seemed far-fetched, to say the least. The soldier had long ago been declared dead by the Japanese government. That didn’t stop Norio Suzuki from wanting to find out more. Bored with his life in Japan, Suzuki set out to find the soldier in question, Lieutenant Hiroo Onoda.

Suzuki travelled to the jungles of Lubang, a tiny island in the Philippines and, incredibly, found Onoda. The problem was Onoda was preparing to shoot him on sight. Suzuki had done his background research on Onoda though and talked him down. He urged Onoda to go home, as the war had ended nearly 30 years ago. But Onoda didn’t believe him and refused.

It was only after Onoda’s former war commander travelled to Lubang to formally relieve him of duty by the order of the Japanese Emperor, that Onoda agreed to end his mission and travel back to Japan. It was then that details emerged of how Onoda kept fighting for nearly 30 years after World War Two had finished.

Onoda was an intelligence officer with the Imperial Japanese Army who was sent to the Philippines in late 1944 to hinder an Allied invasion expected to take place in early 1945. When the invasion came in February 1945, it didn’t take long before most Japanese soldiers defending Lubang were captured, killed, or managed to escape.

As he prepared to depart the island, Onoda’s commanding officer gave an order to the remaining men: fight and never surrender. “It may take three years, it may take five, but whatever happens we’ll come back for you,” the commander said.

When Japan surrendered the war in August 1945, Onoda refused to do so. He hid in Lubang with three other soldiers. Leaflets of the war being over were airdropped to the men, but Onoda didn’t believe them. So began a decades-long campaign of guerilla warfare by the soldiers against the local police forces, various American and Filipino search parties sent to find them and the local Lubang population.

Onoda was the last surviving holdout when Norio Suzuki tracked him down.

The story is relevant to today as cryptocurrency advocates are like Hiroo Onoda post-World War Two. They’re in total denial that their war against fiat currency has ended. The world is moving on and will be better off for it.

FTX’s downfall may prove the final straw. Though tragic for those who have lost money, the saga will have many broader benefits, including:

  • The fraudsters will go to jail. America’s legal system is cracking down on white-collar fraud as seen in the recent sentencing of Theranos founder, Elizabeth Holmes. The case of FTX may be more complicated given the founder’s base is in the Bahamas and the business has tentacles around the globe.
  • Those who lost money in FTX will lick their wounds. The large venture capital and hedge funds will survive and learn a lesson in not speculating in gimmickry. Yes, there will be many smaller investors caught up in the fraud and that’s a tragedy.
  • Crypto regulation is coming. One of the biggest issues is that the crypto sector has operated with minimal oversight, thereby attracting all sorts of shady characters. Heavy regulation is now guaranteed. The Australian government has already pledged to introduce custodial and exchange legislation. It wants to safeguard crypto custody – where money or tokens are stored and who is responsible for keeping them secure. It also wants to regulate exchanges such as the one that FTX operated. An obvious step would be requiring exchanges to back customer deposits with liquid assets.
  • A central bank for crypto is likely to emerge. Banks require central banks and governments to bail them out when they face liquidity crises (bank runs). Crypto will need similar help to prevent further liquidity crises undermining the sector.
  • The immediate economic fallout will be negligible. There is a small caveat to this. There will be some venture capital and private equity firms who’ve invested heavily in crypto who may suffer further losses in the sector, and when combined with the broader tech downturn and the leverage these firms employ, that could lead to forced sell downs of holdings and a possible ricochet effect.
  • It will lead to venture capital and private equity firms doing more rigorous due diligence on potential investments. That’ll be a good thing for them as well as the startups who have real business models to pitch to them.
  • A related point is that the hundreds of billions that have poured into crypto in recent years will be diverted to other sectors, which should be a good thing for economic productivity and society.
  • The best and brightest students from some of the world’s leading universities who are employed in the crypto space will move on to other, more productive sectors.

It’s sad that 14 years after Bitcoin was invented, few of the grand promises of cryptocurrency have been realized. Crypto has limited uses, such as for firms paying workers in countries suffering from hyperinflation, such as Argentina. Any improvements it’s made have been modest compared with more traditional forms of finance.

It’s time for many crypto advocates, and us, to move on.

 

James Gruber is an Assistant Editor at Firstlinks and Morningstar.

 

  •   30 November 2022
  • 4
  •      
  •   
4 Comments
C (my monicker)
November 30, 2022

Hiroo Onoda trusted his Commander. His Commander didn’t keep his word. Hiroo Onoda was following his orders, to the letter.
I would imagine that the jurisdictions that introduce regulations to safeguard consumers crypto- currencies would see an inflow of funds. I actually think the lack of regulation has been holding the sector back.

Acton
December 01, 2022

Anyone who thinks that cryptocurrency is not a total scam and swindle, preying on greed, ignorance and delusion, should note the prevalence of crypto spam, deceptive promises and high pressure selling. If crypto was a legitimate investment and not just another form of speculation, like tulip mania, then it would not depend on incessant spam to attract more fools. The last Japanese soldier fought for a lost cause, but cannot be compared to a crypto scammer, spammer or swindler. Cryptocurrency once again proves that a fool and their money are soon parted.

harry
December 03, 2022

Quoting words of John Stumpf (former Wells Fargo CEO),
“It is interesting that the investment industry has invented new ways to lose money when the old ways seemed to work just fine.”

Pete
December 03, 2022

I agree most crypos/altcoins will fail. Bitcoin however, was the first for a reason and is still early on. Despite all the issues over the last 13years it's still being valued at $16k ish.... Anyone who spends a bit of time learning about why BTC was created (over a 30 odd year time frame prior to it's launch) and what it potentially offers, can't deny it is the best form of money the world has ever seen. How long did it take for Gold to become established? How many ponzies has there been in the Fiat system.... It's highly ironic that every time some bad actor is proven to be behaving poorly in crypto, all the traditional people point the finger and seem to forget the ongoing issues with the legacy system. Meanwhile BTC keeps ticking along. Nothing's Changed with the BTC monetary policy, it's still secure, decentralised and available to everyone in the world with a internet connection. Despite all the contagion from the crypto scammers, BTC remains and gets stronger over time. It takes time to get your head around why it exists and how it works, but once you go down the rabbit hole, you can't "unsee" the inevitable.

 

Leave a Comment:

RELATED ARTICLES

What can investors expect from QE in Europe?

Why are central banks moving from US Treasuries to gold?

Will stablecoins change the way we pay for things?

banner

Most viewed in recent weeks

Testamentary trusts post-budget: Estate planning, tax reform and the ‘death tax’ debate

Proposed Budget changes to taxation are casting new uncertainty over testamentary trusts, prompting closer scrutiny of estate planning structures and the real implications of reforms still taking shape.

How to minimise tax with a will

Inheritance tax implications in Australia may surprise some, as poor estate planning without proper wills or trusts can lead to costly tax bills and delays for beneficiaries.

High quality businesses are on sale

Beneath the dominance of the ASX's largest stocks, much of the market has been left behind. High-quality companies are now trading at levels rarely seen, offering opportunities for investors willing to look deeper.

Meg on SMSFs: The CGT changes don’t impact super but what about Div 296 tax decisions?

New CGT rules could tip the scales in the super vs non-super debate. For those facing the Division 296 tax, the case for withdrawing has gotten more complex. A "comparison rate" tool may help assess decisions.

The strange effect of the 30% minimum capital gains tax

The 30% minimum tax on capital gains sits at the heart of the budget's proposed reforms. Yet the mechanics reveal anomalies that introduce unexpected distortions that raise questions about its design.

Welcome to Firstlinks Edition 667 with weekend update

The downfall of the giant and three lessons for investors.

  • 18 June 2026

Latest Updates

Latest from Morningstar

Ranking three common retirement strategies

The defining challenge of retirement isn't just about building wealth, it's about converting your lifetime savings into sustainable income. A holistic understanding of different strategies can improve long-term outcomes.

Economy

Was life really better in the good old days?

Are we worse off than previous generations? Lately, there seems to be a heightened level of angst that economic conditions are getting harder and that the two-party political system (and maybe democracy too) is failing voters.

Retirement

Australia has saved $4.5 trillion for retirement. Here's what matters more

Most Australians approaching retirement can tell you the exact dollar value of their super account. But success depends on more than a sizeable balance. Here's four key questions to ask yourself at the start of the financial year. 

Who gains in an AI-supercharged economy?

AI is already reshaping the economy, but companies building transformative technologies rarely capture the greatest long-term value. Instead, those benefits accrue to the users. We may well see this pattern reproduced. 

Taxation

Div 296's million-dollar reset worth $25,000

The 'cost base reset' for the new super tax is being sold as protection for pre-July gains. A worked example shows $1M of protection is worth about $25,000, and the real deadline has not passed.

Latest from Morningstar

The forecasting fix that Wall Street missed

Asking whether markets are overpriced may be the wrong question. New research suggests that traditional valuation metrics used to forecast returns may have been misread. Here are five takeaways for investors.

Investment strategies

Should a fund manager invest their own money differently?

Investors often like the idea that fund managers should invest client money exactly as they invest their own. But reality is more complicated. Unique circumstances make a different approach rational and, at times, beneficial.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.