From cryptocurrency to cryptofinance: FTX, disintermediation and the US state

Abstract

During the first decade of cryptocurrencies (2008–2017) there were few connections established between crypto and the conventional finance sector, but in the US in 2025 the integration of these two sectors is proceeding at speed. This paper examines one part of this integration – the centralisation of cryptocurrency trading inside of large, digital platformed exchanges, which is theorised as a shift from cryptocurrency to cryptofinance. Furthermore, the paper shows how this shift to cryptofinance has been aided by an emergent crypto-state nexus. The novel contribution of the paper is explaining how the US crypto markets have progressed from niche, relatively decentralised and blockchain-based, with little association with or regulation by nation-states, into what is now competition between FinTech-fuelled, digital platform firms that provide suites of financial services and instruments and collect fees for mediating access to the underlying blockchain markets. Empirically, the paper traces the rise of Sam Bankman-Fried’s firm, FTX, as it evolved from a small, California-based start-up running arbitrage trades in 2017 into one of the world’s largest crypto exchanges servicing over a million customers in 2022. In light of the FTX story, the paper analyses the geographical political economy of platformed cryptofinance as it struggles with both the incumbent financial sector and the US state.