The poor chap in this story was a victim of fraud. FTX was essentially an exchange. From the article it seems that FTX at least implied government underwriting. And FTX were very clear that depositors principles were fully funded. Both of which were direct lies and quite possibly criminally fraudulent (we shall see with the trial).
The only counterpoint to this is that if FTX were offering high rates of return for simply depositing money with them then the question would have had to be "how?". But it would not have been difficult to confuse FTX with a more traditional bank - from the pumping of influencers, the misleading social media tweets and website claims to the fact FTX were big sponsors of US sporting venues and even could issue traditional debit cards. Plus, big corporate investors were putting in money, and SBF was busy throwing cash around the political world to influence policy making whilst on the face of it looking like one of the "responsible" people when advocating for regulation to Senate committees.
Put it this way - if someone decides to invest in MILF token (yes, it is really a crypto coin - look it up, but probably not on a work PC), then they cannot be hugely surprised and outraged when it turns out to be a "rug pull" and they lose all their money. Even this shouldn't happen, but there is some level of individual responsibility to check what is being invested in. But depositing money in a crypto-exchange that was one of the most well known and largest with a lot of backing and the promise of safety? I would say that it understandable.
I am quite an advocate of the concept of crypto, blockchain - hell even NFT. The fact that a lot of the area is a total dumpster fire doesn't mean the underlying concepts over decentralisation don't have merit. If the traditional banking industry didn't have government imposed safeguards for consumers then we would expect it to go a similar way - even with these we all know what a mess traditional finance can make. If people want to dump money in the latest stupid crypto coin then it probably isn't our place to stop them, in the same way I wouldn't be stopped putting on my life savings on the 3:30 at Kempton or some penny stock. However, regulating the exchange between the traditional currency world and crypto currency would seem sensible plus a robust approach to shutting down and prosecuting all those involved with Crypto scams which are in essence Ponzi schemes. Some of the influencers might think twice if they think they could end up with serious jail time at the end of it. I suspect at least part of the government's reluctance with action in this space is they are not keen to be seen to add credibility to the Crypto market.
