Year of the tech grifter: will Silicon Valley ever learn from its mistakes?

It was a month of eerie parallels.

On 12 December, the disgraced crypto founder Sam Bankman-Fried was arrested on fraud charges in the Bahamas, marking a dramatic end to his reign as the head of the now defunct cryptocurrency exchange FTX.

His arrest came just weeks after the former Theranos founder Elizabeth Holmes was sentenced to more than 11 years in prison for similar charges. Many pointed out the obvious similarities: each founder was considered a Silicon Valley wunderkind and attracted media acclaim and millions of dollars in investments before a spectacular fall from grace.

The collapse of FTX was yet another indictment of the hype machine that has long fueled the rise of tech superstars and their companies. But even in 2022, the question remains: will Silicon Valley ever learn from its mistakes?

But with FTX marking yet another blow to founder worship, the industry faces another reckoning.

As enforcement tightens up, founders may take note. While in the past entrepreneurs could make broad promises during fundraising periods with little to back it up, they may have to be more careful now, said Jack Sharman, an expert in white-collar criminal defense at Lightfoot, Franklin & White LLC.