Officials say more and more people are falling for cryptocurrency scams. In some cases, victims have lost their entire life savings.
TAMPA, Fla. – With celebrity endorsements from a-listers like Matt Damon and Tom Brady, the FTX Exchange – and cryptocurrency in general – appeared to have security through star power. But now, with the recent collapse of FTX, the "crypto-star" appears to be fading.
"If there had been any regulation, at all, like there is for other exchanges or other parts of the financial system. This wouldn't have happened," said financial expert Sultan Meghji.
In a nutshell, FTX experienced the equivalent of a bank run; customers fled the company, pulling billions of dollars out, all at once, over concerns about its balance sheets.
RELATED: Binance to buy rival FTX Trading in apparent bailout
There's a lot more to it, but ultimately it raises an important question: Is cryptocurrency here to stay or a flash in the pan?
"I think there's a huge hit on the trust," said Carl Sachs, a cryptocurrency expert and the founder of Finterest, a crypto-lending protocol.
FROM JULY: Why the crypto plunge is a cautionary tale for public pension funds
He doesn't think the fall of FTX is the fall of crypto, by any means.
"In 3 months, clean slate! New companies will come out and take the place of the old ones that may be focused on decentralization," said Sachs.
Cryptocurrency investors aren't altogether dissuaded, either.
"It has been a wild journey to say the least," said local crypto investor Nick Konstantinidis.
He's sticking with crypto for the long haul. However, he admits newcomers should be aware of the risks and potential pitfalls.
"You’ve got to do your own research. A lot of people go into with the plan of treating it like it’s a casino which is not how it’s meant to be," he said.
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