Author: Muyao Shen, Bloomberg; Translated by: Wuzhu, Golden Finance

It seems like whenever there’s a scandal in the cryptocurrency space, the people involved have degrees from Ivy League or other elite schools.

Just this week, Princeton graduate Nader Al-Naji was arrested on suspicion of wire fraud related to the BitClout encrypted social media platform he founded. MIT graduate brothers Anton and James Peraire-Bueno were arrested in May for allegedly exploiting a vulnerability in a software program used on the Ethereum blockchain to steal $25 million.

Stanford graduate Do Kwon is being held in a Montenegrin prison for his role in the TerraUSD stablecoin crash in 2022. Su Zhu and Kyle Davies, whose hedge fund bankrupted multiple crypto lenders, both attended Columbia University.

And of course there’s MIT alumnus Sam Bankman-Fried, who has assembled a team of young professionals from other top schools, including Stanford.

This begs the question: is the crypto industry so desperate for talent that it offers a pass to those who come from elite schools? Or is there something inherent in these institutions that encourages their alumni to take excessive risks, and in some cases, even break the law? Maybe, as one of my friends (also a Princeton alum!) put it, they just think they’re too smart to fail.

Criticism of elite universities is nothing new, of course. Generally speaking, such institutions are often viewed as ivory towers, out of touch with reality. Critics say the emphasis on prestige can lead students to overestimate their status and believe they are superior to others.

MIT graduate Sam Bankman-Fried Photographer: Angus Mordant/Bloomberg

But should the culture of the crypto industry be absolved of any responsibility? The industry seems heavily biased towards promoting people with perfect resumes, which are often from the best schools. Yes, there are technical challenges in crypto that require talent from prestigious schools. However, for a large part of the industry, it's not technology. It's finance, gaming, art, and culture.

Crypto’s appeal to elite schools also highlights the industry’s seismic cultural shift since the invention of Bitcoin in 2008. What began as a cypherpunk foundation with libertarian, anarchist ideals has morphed into a culture increasingly dominated by elites and Wall Street.

Even for influential figures who haven’t been accused of wrongdoing, the industry’s resumes resemble those of Silicon Valley or Wall Street more than the grassroots culture of crypto’s early days. Galaxy Digital’s Michael Novogratz, ConsenSys’ Joseph Lubin, and Pantera Capital’s Dan Morehead all went to Princeton. Cameron and Tyler Winklevoss attended Harvard, where Ripple Labs’ Brad Garlinghouse got his master’s. Paradigm’s Matt Huang and MicroStrategy’s Michael Saylor attended MIT. Arthur Hayes attended the University of Pennsylvania… the list goes on.

Perhaps, however, the problem lies not with the schools but with the industry itself — and its lazy attitude toward due diligence.

Shuyao Kong, co-founder of blockchain startup MegaETH and a Harvard Business School graduate, said there is a “general lack of due diligence in the cryptocurrency industry” and that this is the problem. “During the bull run, founders from all backgrounds have easy access to funding, and founders from top schools naturally attract more attention, liquidity, and mind share. When they break out, they break out very thoroughly.”