Dear Chuck,

I always thought a small diversification into cryptos would protect me from the collapse of fiat money, but now with the collapse of FTX, I am losing trust in the entire concept of currency. What should I do?   

Losing Trust in Currencies

Dear Losing Trust in Currencies,

As painful as it is to be deceived and lose trust in an institution, an investment firm, or any form of currency, it was misplaced trust to begin with. The Bible warns us never to love money. Few that I have ever known have admitted to it. However, we often have to come to grips with the fact that placing our security, confidence, or trust in it is not too dissimilar to loving money.

Hebrews 13:5–6 is one of my favorite passages regarding money:

Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” So we say with confidence, “The Lord is my helper; I will not be afraid. What can mere mortals do to me?”

The implied message here is that money will leave you and forsake you, but only Jesus will never do that. We are to keep our hope, security, and confidence in Christ and His kingdom, even while seeking to be faithful stewards of the resources we temporarily manage on Earth.

The Crypto Debacle

Sam Bankman-Fried, who goes by SBF, was arrested earlier this week. His name and image will forever be an icon for the breach of trust. He is at the center of the unbelievable cryptocurrency scandal, leaving millions of people angry, fearful, and disillusioned—not just you. He faces federal criminal charges, including wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.

The Securities and Exchange Commission (SEC) announced separate charges for violating the Securities Act and the Securities Exchange Act. The complaint says, “Throughout this period, Bankman-Fried portrayed himself as a responsible leader of the crypto community. He touted the importance of regulation and accountability. He told the public, including investors, that FTX was both innovative and responsible. Customers around the world believed his lies, and sent billions of dollars to FTX, believing their assets were secure on the FTX trading platform.”

SEC Chair Gary Gensler stated, “We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”

Ponzi scheme king Bernie Madoff was sentenced to 150 years in prison. It is possible that prosecutors will make an example of SBF’s crimes.

Expect More Government Regulation

Every time a disaster like this happens, government agencies seek to increase regulation in order to rebuild trust. Mike Novogratz, bitcoin bull and Galaxy Digital CEO, said, “The FTX debacle has created a ‘deficit of trust’ in the whole industry.” In an interview with CNBC, he shared, “This is about transparency and disclosure, in lots of ways. Our industry has failed to self-regulate. I think the money side of crypto, companies like ours that buy and sell and lend and do derivatives, are going to get regulated and should be.”

Dan Dolev, a Mizuho analyst, explains, “What FTX told you is that one day you could be worth the world, and the second day you could be worth nothing, and I think consumers are going to be very scared.” Market share gains by Coinbase will be “very minimal in the greater scheme of things” because of lack of trust.

Yesha Yadav, professor of law and director of diversity, equity and community at Vanderbilt University, said, “The level of disillusionment and disappointment and sense of feeling deceived by FTX is so deep because it was seen as one of the most compliance-friendly institutions in the crypto economy and one that would be leading the regulatory efforts.”

John J Ray III, the U.S. attorney who took over as CEO of FTX, has been stunned by the incompetence of SBF and his executive team. Ray declared that he has never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” He told Congress Tuesday, “This is just plain, old-fashioned embezzlement, taking money from others and using it for your own purposes. This is not sophisticated at all.”

In October, cryptocurrencies stolen by cybercriminals set a new record of over $3 billion. This was prior to news of the FTX debacle released in November. Will regulation solve the problem? Was it not the lack of regulations that originally drew people to cryptocurrencies?

Who to Trust

According to Crown’s late founder, Larry Burkett:

Trickery, double-dealing, lying, cheating, and subterfuge are all the practices of one who deliberately deceives. The most devastating loss associated with deceit is the dulling of spiritual awareness. Guilt associated with a known deception will cause the Christian to withdraw from God’s presence. Once withdrawn, subsequent deceptions become easier, less conviction is felt, and life is full of defeat and frustration. Deception destroys trust and leads to hypocrisy and a critical spirit. No one is immune to the temptation to deceive, particularly when money is concerned. God’s Word gives us guidelines for making decisions in spite of our normal reactions.

“It is better to take refuge in the Lord than to trust in humans.
It is better to take refuge in the Lord than to trust in princes.”

Psalm 118:8–9 ESV

Are we willing to put God totally in control of our finances? He promises to satisfy our needs, so are we willing to trust Him with everything? What about trusting Him with our losses?

“Trust in the Lord with all your heart, and do not lean on your own understanding.
 In all your ways acknowledge him, and he will make straight your paths.”
Proverbs 3:5–6 ESV

My suspicion is that your crypto losses have been painful. We must all trust God regardless of what we have or do not have. That does not mean we stop working, giving, saving, spending, or investing. We do our part to be faithful with the temporal resources we have but only store up for ourselves treasures in Heaven.

The Crown Stewardship Podcast can be a valuable tool to provide wisdom and insight into how you can effectively steward God’s resources—both time and money. You can subscribe for alerts of new episodes. May we all be found faithful stewards of the Lord’s resources.

This article was originally published on the Christian Post on December 16, 2022.