It will come as no comfort to those who have already lost fortunes, but it is remarkable how resilient the crypto currency market has been this year, especially following the collapse of the FTX exchange in November. But if the arrest of FTX founder Sam Bankman-Fried in the Bahamas and the request by US authorities for his extradition isn’t a sign to rush for the exits then I don’t know what is.

Without trying to pre-judge his case, there is going to be a lot more of this to come. FTX, it is easy to forget, was one of the more trusted players in a market that remains largely unregulated. Bill Clinton and Tony Blair both judged Bankman-Fried to be respectable enough to risk their reputations appearing on a platform with him at a public event. If FTX could go down with all souls lost, then so can other crypto institutions.

It is what else is out there which should be really worrying investors.

There is still a remarkable amount of money to lose in crypto. Even after a plunge this year, the total value of crypto currencies worldwide is still $850 billion (£691 billion). That is $850 billion which is not backed by any assets of value, which is not underwritten by any government and which is hardly regulated beyond fraud laws. By contrast, the entire UK stock market has a market capitalisation of around $2.5 trillion (£2 trillion).

You can lose everything on the stock market: just ask investors in Carillion, Debenhams, Thomas Cook and all the other wipe-outs of the past few years. But at least FTSE companies have to go through accounting procedures which mitigate the risk of company collapses to some extent. As we were reminded in the 2008/09 crisis, banks can go bust, taking your savings with them – but at least the government will refund your first £85,000, which is rather more than most people have in their savings accounts.

But what is there to protect you against a crypto exchange going bust, or the cryptocurrency itself falling to zero value? Nothing at all. Even Carillion had a few dumper trucks to be picked over by its creditors. There is no value in crypto currencies beyond what people are prepared to pay for them at any particular moment – and no government to underwrite it.

For the past few weeks Bankman-Fried has been living in limbo. He could go around apologising all he liked, but he must have known what was coming. But it is what else is out there which should be really worrying investors. Does anyone really think the problems begin and end with one frizzled-haired 30 year old? The crypto collapse has been long overdue. What we have seen so far is just the beginning.

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