Yet, as the emerging industry now looks to finally move on from Bankman-Fried, crypto giants like Binance, Coinbase and Gemini, among others, are still heading for courtroom clashes with regulators that could prove an even greater peril to the market’s future than FTX’s collapse in late 2022 ever did.

The Securities and Exchange Commission has brought more than two dozen crypto-related cases since FTX collapsed, with Chair Gary Gensler calling the business “a field rife with fraud, scams, bankruptcies and money laundering.” New York Attorney General Tish James has gone after major players Gemini, Digital Currency Group and Genesis Global Capital for alleged fraud. And while most of the cases against the industry are civil, the Justice Department has criminally charged some crypto executives such as Celsius Network’s former CEO Alex Mashinsky, who was arrested in July.

Meanwhile, on Capitol Hill, Sen. Elizabeth Warren (D-Mass.) is leading other lawmakers in pushing legislation to crack down on what they say is the industry’s money-laundering machine.

“The parade of cases to follow poses a much more existential threat than the FTX verdict,” said John Reed Stark, a crypto critic who once led the SEC’s internet enforcement office. “Almost symbolically, the FTX verdict helps wake up people to the absurdity of investing in crypto, just to the sheer absurdity of it — that someone like this could play around with $8 billion and no one would know.”

While Bankman-Fried was accused of stealing customer funds — an allegation far beyond what other major crypto firms are confronting — financial regulators like Gensler’s SEC and the Commodity Futures Trading Commission are taking aim at the crypto business itself. The more than $1 trillion market, they say, is filled with tokens, companies and projects that violate long-standing securities and derivatives trading rules.

The industry’s defenders argue that the regulatory crackdown is based on the flawed logic that most digital assets should be subject to the rules of traditional finance. Congress, they said, should instead be leading the charge to establish crypto-specific rules that could prevent future problems in the market, rather than allowing regulators like Gensler to set the guardrails through litigation that could take years to play out.

The FTX saga and the brewing legal clashes have complicated those efforts in Congress.

“It set us back for a while, certainly,” said Sen. Cynthia Lummis (R-Wyo.) of FTX, adding that the exchange’s downfall led her and Sen. Kirsten Gillibrand (D-N.Y.) to beef up consumer protection provisions included in a crypto bill they were crafting.

“When this very high-profile participant in the space, Sam Bankman-Fried, fell from grace, the reaction around Capitol Hill was just to turn away from this asset class and not take deeper dives to learn more about it,” Lummis added. “Now that enough time has passed, people are more receptive to discussing it again.”

Bankman-Fried was convicted after less than five hours of deliberations, ending a four-week trial that featured several ex-FTX lieutenants testifying against their former boss and friend. The charges carry a maximum potential sentence of 110 years.

“We respect the jury’s decision. But we are very disappointed with the result,” Mark Cohen, Bankman-Fried’s attorney, said in a statement. “Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him.”

U.S. regulators have long voiced wariness about crypto, but FTX’s downfall dramatically changed the tone. Last year, Bankman-Fried descended on Washington to press for the establishment of industry-friendly rules, becoming the face of crypto in the nation’s capital. He doled out millions of dollars in political donations, met with regulators across the government and tried to sell lawmakers on the merits of digital assets.

Then FTX crumbled and was suddenly cast in a new light across Washington, prompting lawmakers to walk away from legislation and regulators to step up enforcement campaigns and calls for tougher policing.

“We’ve gotten more of an inside look into what was a black box of crypto” since FTX, CFTC Commissioner Christy Goldsmith Romero said in an interview. The CFTC has levied allegations against a number of big crypto names, including Binance and former Voyager Digital CEO Stephen Ehrlich. “Understanding more about how some of these companies have operated means that a responsibility then shifts to policymakers [and] regulators about what to do.”

Many crypto executives have cheered the authorities in their pursuit of alleged criminality in crypto, insisting that those misdeeds have little to do with the digital assets business and unfairly taint the market. But the industry has taken up a far more hostile tone toward financial regulators’ attacks, vowing to fight claims that crypto companies are skirting investor protection and market rules.

Coinbase, the largest U.S. crypto exchange, has signaled that it will take the SEC’s case against it to the Supreme Court, if need be. The agency has alleged that the company is violating the guardrails that govern much of Wall Street, depriving investors of critical protection. But Coinbase executives counter that the decades-old rules for stocks and bonds shouldn’t apply to crypto, which they say is an entirely novel asset class in need of new rules from Congress.

“If the intent is to bring it into the regulatory framework that exists today, then the crypto industry is likely to fight that effort to the end — that’s not going to be accepted,” said Neel Maitra, a former SEC official who is now a partner at Wilson Sonsini Goodrich & Rosati.

A Coinbase spokesperson, when asked for comment, pointed to Chief Legal Officer Paul Grewal’s recent posts on X, the company formerly known as Twitter, questioning the SEC’s authority over crypto. The company has filed a motion to dismiss the SEC’s lawsuit.

“[The] SEC is attempting a radical expansion of its own authority,” Grewal posted on Oct. 24. “Only Congress can do that.”

Binance, Gemini, Genesis, a lawyer for Mashinsky and a spokesperson for Ehrlich did not immediately respond to requests for comment. A DCG spokesperson said the company will “aggressively” fight James’s claims, noting that the company hired Barry Berke, who was legal counsel to Democrats during the impeachment proceedings of former President Donald Trump, to defend it.

The market has shown few signs of weakening amid the crackdown, with prices recently hitting their highest levels in a year. Industry lawyers see recent court decisions — such as a partial win for crypto company Ripple Labs — as signs of larger victories to come against Gensler’s SEC.

House Republicans including Financial Services Chair Patrick McHenry, meanwhile, are still aiming to push historic crypto legislation through the chamber by year-end. But the odds of passage through the Senate remain low, especially with Warren’s cadre of crypto critics quickly growing on both sides of the aisle.

Warren told POLITICO that crypto is in need of “some basic rules” around terrorist financing and money laundering.

“The crypto industry obviously has serious problems with fraud, and the public no longer has confidence that it’s on the up and up,” Warren said.

Ultimately, unless regulators and the industry can reach a compromise, crypto is in many ways stuck battling it out in the courts. But it will likely take years to work through the pipeline of cases brought over the last year. In the meantime, investors could be at risk.

“[Until] crypto firms are at least allowed, and in an even stronger way, encouraged to set up shop here in the U.S., build their businesses on shore, you’re only going to create the next generation of SBFs,” said a crypto executive, who was granted anonymity because they were not authorized to speak publicly.

Eleanor Mueller and Jasper Goodman contributed to this report.