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

Want your loved ones to inherit your super? You can’t afford to skip this one step

One in five Australians die before retirement and most have not set up their super properly so their loved ones can benefit from all their hard work and savings. 

Indexation implications – key changes to 2026/27 super thresholds

Stay on top of the latest changes to superannuation rates and thresholds for 2026, including increases to transfer balance cap, concessional contributions cap, and non-concessional contributions cap.

Has Australia wasted the last 30 years?

The 20 years after Peter Costello left Treasury have been deemed wasted...by Peter Costello. The missed opportunities for Australia began long before.  

Super is catching up, but ageing is a triple-threat

An ageing Australia is shifting the superannuation system’s focus from accumulation to the lifecycle of retirement. While these pressures have been anticipated for decades, they are now converging at scale and driving widespread industry change.

The refinery problem: A different kind of energy crisis in 2026

The Strait of Hormuz closure due to US-Iran conflict severely disrupted global energy supply chains. While various emergency measures mitigated the crude impact, the refined product market faces unprecedented stress.

3 ways to defuse intergenerational anger

With the upcoming budget increasingly likely to include bold proposals to alter the tax code I’ve outlined three incremental steps with fewer unintended consequences.

Latest Updates

Investment strategies

War can’t be good, can it?

War brings immense human suffering and geopolitical chaos, but historically, equity markets have shown a certain detachment and resilience amid conflict, leading to increased profitability despite initial panic.

Property

Origins of the mislabeled capital gains tax ‘discount’

Debate over the CGT discount is intensifying amid concerns about intergenerational equity and housing affordability. This analysis shows that the 'discount' does not necessarily favor property investors.

Superannuation

Div 296 may mean your estate pays tax on assets your beneficiaries never receive

The new super tax, applying from 1 July, introduces more than just a higher rate on large balances. It brings into focus a misalignment between where wealth sits and where the tax on that wealth ultimately falls.

Investment strategies

There’s more to software than just code

AI-driven fears of collapsing software moats has triggered indiscriminate sell-offs. This has created mispricing opportunities as markets overreact to uncertainty and rising discount rates.

Economics

Europe: A new growth trajectory powered by reform and investment

Europe is undergoing a major transformation driven by security threats, US pressure, and a shift from austerity to growth. EU member states are taking proactive measures to enhance competitiveness and resilience.

Investment strategies

Orbital AI data centers prepare for launch

The new space race is driven by AI as data centers in space offer continuous solar power and reduced environmental impact. Orbital AI aims to speed data processing and ease Earth's resource strains.

Retirement

Little‑known government scheme can help retirees tap into $3 trillion of housing wealth

The Home Equity Access Scheme in Australia allows older homeowners to tap into their home equity for retirement income, yet remains underused due to lack of awareness and its perceived complexity.

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.