The Great Crypto Sell Out?
The Great Crypto Sell-Out: How Ideals Got Tokenized
"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
Satoshi embedded this message in Bitcoin's genesis block. Not a manifesto, not a whitepaper citation, but a newspaper headline about Alistair Darling preparing another taxpayer rescue for failed institutions.
The message was clear: while regulators' answer to every crisis is more regulation, and Bitcoin offered a different path: a system that couldn't be bailed out because it couldn't fail in the ways banks do. No balance sheets to cook, no executives to rescue, just code, consensus, and mathematics.
It was certainly never meant to be investable. It was meant to be ungovernable.
1. The Original Dream: Stateless Code, Stateless Money
Crypto emerged as a philosophical response to 2008, but not just to the crisis, but to the regulatory theatre that followed. While politicians promised "never again" and regulators stacked new rules atop old ones, the cypherpunks built an escape route.
The founding vision wasn't an app store or a token drop; it was the construction of a parallel financial system where you didn't need to trust governments, banks, or platforms. It stood for trustless consensus. Self-sovereignty over assets, privacy by default, borderless, censorship-resistant money.
The cypherpunks weren't pitching to Sequoia, inded they were building tools to abolish middlemen, Bitcoin didn't ask for permission, Ethereum promised programmable law, Monero said you deserve privacy without KYC.
Ask yourself: when's the last time you used a so-called Web3 app that didn't require logging in?
2. From Revolution to Regulation
Crypto didn't get outlawed, it got normalised to such an extent iis it defined away, a grin without a cat.
The route wasn't direct repression; it was more effective: compliance capture. After every financial crisis, regulators reach for the same tool…more rules. After 2008, they created living wills, stress tests, Basel III. And when crypto emerged? They simply extended the same playbook to a system designed to make it obsolete.
Suddenly we had DeFi apps hosted on AWS, stablecoins backed by bank IOUs, layer-2s where upgrade keys are held by companies.
The UK's FCA is now suggesting requires annual audits for stablecoin issuers. Annual. Audits. For blockchains that update every ten seconds. Daily reconciliations for immutable ledgers! As I wrote in response to their consultation: "If you need daily reconciliation, your system is broken, or not actually on-chain."¹
Everything's now designed to look like crypto while behaving like fintech. Always under the banner of 'consumer protection,' of course, the same banner under which they protected consumers straight into the 2008 crisis.
3. DLT as a Marketing Term
What really got sold wasn't tokens. It was the word “blockchain.” Institutions that needed bailing out in 2008 now rebrand databases as "DLT networks." We got CBDCs running on permissioned chains with kill switches: digital fiat with surveillance superpowers. Bank consortia with shared ledgers no one can join. Trade finance platforms with blockchain in the footer but SQL at the core.
This is "blockchain, not Bitcoin"is what lets traditional finance pretend it's innovating while discarding the essential ingredients: decentralisation, censorship-resistance, and trust minimisation.
It's Alistair Darling's financial system with a crypto veneer.
4. The Industry's Quiet Betrayal
Let's be clear: the sell-out was not a mistake. It was a business decision. Retail wanted price pumps, founders wanted liquidity events, investors wanted regulation to de-risk exposure. So the movement got boiled down to yield farming with opaque smart contracts, to rugpulls posing as governance tokens, NFT drops with pre-mines and whitelist auctions.
Uniswap started as an immutable protocol. Now it has a 'fee switch' controlled by token holders who look suspiciously like shareholders. MetaMask was the gateway to Web3. Now it's owned by ConsenSys, which takes VC money and implements IP tracking.
The industry got what it wanted: Web3 became Web2.5 with a wallet connect button.
5. The FTX Vindication
In November 2022, as FTX collapsed, I wrote²:
"Who'd have thought that when you create a technology that allows you to move assets and not have to trust someone, it goes wrong when, er, when you trust someone?"
The diagnosis was obvious to anyone who understood the technology. FTX didn't fail because crypto failed. FTX failed because it wasn't crypto. If customer assets had been on-chain, verifiable, transparent, if FTX had actually used the technology it claimed to champion’ Sam Bankman-Fried couldn't have loaned them to Alameda. You can't hide $8 billion on a blockchain, you can't secretly misappropriate funds that exist as public entries on an immutable ledger.
As I noted then:
"We have seen human weakness for sure, and an inability to see into the financial position of certain companies. But what comes out glistening with brilliant vindication is the blockchain itself."
The bitter irony? We'd built blockchain specifically to prevent Enron, Madoff, Wirecard, the endless parade of trust-based frauds where companies claim to have billions "in trust" but no one can verify until it's too late.
"If only we had a way to generate real time financial transaction data, in a way such that we do not need to trust anyone; a way to observe publicly a transfer of say $5bn to an account in a trustee bank? If only? Um, we do..."
FTX was just Madoff with a crypto frontend.
6. It Was Never Meant to Be Investable
And here's the philosophical betrayal. Crypto wasn't built to attract venture capital. It was built to make venture capital unnecessary. The genesis block didn't announce a funding round. There were no founder shares, no equity rounds, no board seats. Just a message about bailouts and a system designed to make them impossible.
The LinkedIn crowd who 'can't see the use case' are correct—there is no use case for them. Crypto's use case was making them obsolete. What could be more antithetical to the original ethos than packaging disintermediation as a highly intermediated investment opportunity?
Today, token launches come with cap tables, governance forums read like shareholder meetings. Infrastructure is optimised for compliance, not liberation.
7. The Use Case Was Always Freedom
For those saying "I don't see the use case" they say, maybe consider:
Syrians use USDT when their banks collapse
Argentinians flee peso devaluation through crypto
Russian dissidents receive donations their government can't freeze
Iranians access global markets despite sanctions
The use case was always freedom. They don't see it because they've never needed it. Because when their banks failed, Alistair Darling bailed them out.
8. The Pattern Never Changes (And We Keep Falling For It)
After Waste Management Inc: more regulation. After WorldCom, Enron, Madoff, AIG, Satyam: more regulation. After 2008: more regulation. After Wirecard (yes, even in 2020): more regulation. After FTX: more regulation.
They fail every time, but not because they need better rules, but because they're playing the wrong game. You can't regulate integrity into a system, you can only architect it in.
And how did regulators respond to FTX - fraud that happened because a crypto company refused to use crypto? By demanding more traditional oversight. More audits. More compliance officers. More of exactly what failed at every company in that dreary list above. They looked at a crisis caused by opacity and said: "We need more paperwork."
The FCA now suggests crypto firms maintain, waut for it, off-chain records to prove their on-chain records. To conduct daily reconciliations of immutable ledgers. To have third parties verify what's already cryptographically verifiable. As I wrote in response: "It's like demanding smoke signals be sent by fax."¹
9. If There Is Hope, It Lies in the Protocols
Crypto once promised a stateless monetary system. Anonymous, permissionless digital identity. Protocols with no single point of failure, no chancellor on the brink of a bailout.
Now you need to upload a passport to use a DEX, block explorers double as surveillance tools, your "wallet" is a frontend for custodial middleware. And stablecoin issuers must provide annual audits to prove their real-time blockchain is real. We have lost moral clarity.
As I wrote post-FTX: "This is why we need more blockchain in crypto itself, and more blockchain in fiat, we need blockchain based accounting."² Instead, we got more committees, more oversight, more of what failed. The same regulators who failed to prevent 2008, who think every crisis needs more rules, they now oversee crypto, and they're regulating it to behave exactly like the system that failed.
10. The Reckoning to Come
The technology still holds potential. ZK proofs, decentralised storage, truly sovereign identity, these tools are real. But unless the next generation reclaims the old principles, they'll be used to build fancier prisons, not freer systems.
The next financial crisis won't be prevented by the regulators who missed the last one. It won't be stopped by compliance officers checking PDFs of blockchain states. It will be weathered by those holding assets no chancellor can debase, using systems no government can shut down. Assets verified any time of day in trustless systems.
Crypto isn't dead. But the narrative is bankrupt. A technology born to eliminate middlemen now exists to enrich them. A system designed to prevent bailouts now seeks regulatory approval. A protocol that embedded a newspaper headline about failure now files annual reports.
The blockchain itself remains vindicated, beautiful in its conception, immutable, transparent, trustless. Did the VCs win, the revolution got Series B funding?
If there is hope, it lies in the protocols. The ones that refuse to file the paperwork, the ones that remember what that genesis block meant. Because somewhere, another Alistair Darling is preparing another bailout. And the regulators are preparing another framework. And both will fail. Again.
But the blockchain? The blockchain doesn't care. It just keeps producing blocks.
¹ Harrald, P. (2025) "Response to FCA Consultation Paper CP25/14: Stablecoin Issuance and Cryptoasset Custody" ² Harrald, P. (2022) "How to avoid crypto scandals with crypto", LinkedIn, 16 November 2022