Last week, the Securities and Exchange Commission filed 13 charges against Binance, the world’s largest crypto exchange, accusing it of mishandling customer funds and a litany of other white-collar crimes. It also charged Coinbase, a public company and the biggest U.S. crypto business, with failing to register as a broker-dealer.

The government actions did not move the price of bitcoin much, nor did they crater Coinbase stock; traders and investors had been expecting the enforcement actions for months. And both firms vowed to fight the charges and remain operational. Binance “should not be the subject of an SEC enforcement action, let alone on an emergency basis,” the firm said in a statement. “We are very confident in the way we run our business—the same business we presented to the SEC in order for us to become a public company,” Paul Grewal, Coinbase’s chief legal officer, said in response.

Even before the SEC announcements, crypto was in trouble. Dozens of firms had failed, millions of individual investors had plunged into the red or cashed out, and billions of dollars of institutional investment had moved on. Beset by long-standing problems of its own invention, the industry now faces not just a regulatory crisis but an existential one too: Is crypto down, or is it dead?

It is definitely down, written off by thousands of individual and institutional investors. The most obvious issue: scams. In the world of crypto, big firms are scams. Little firms are scams. Stable coins are scams; exchanges are scams; NFT schemes are scams; initial coin offerings are scams; tokens are scams. Firms run by self-proclaimed altruists are scams. Firms run by the shadiest dudes you can possibly imagine are scams. “There have been a lot of putatively decentralized Web3 companies that were really just three guys and a pair of servers in a pump-and-dump coin scheme,” Will Wilkinson, the head of policy at TBD, a bitcoin-focused subsidiary of the fintech giant Block, told me. And even simple, legitimate crypto activity remains prone to fraud. Hackers purloined nearly $4 billion of bitcoin and other cryptocurrencies last year alone, according to the research group Chainalysis.

The industry also has a complexity problem. Fourteen years since the advent of bitcoin, people still struggle to comprehend how the blockchain works, what Web3 is, and what tokens and coins and NFTs are. Many folks also struggle to figure out how to buy crypto assets and manage their investments. (Why do you need a weird series of letters and numbers to secure your bitcoin, again?)

“A mature market is one that shouldn’t make you afraid to put your money in. You shouldn’t be turning off a bunch of folks with greed and theft,” Yesha Yadav, an expert in financial-market regulation at Vanderbilt University’s law school, told me. “Equally, it should be one in which folks feel comfortable in understanding the technicalities.”

What is the point of doing all of this, anyway? Boosters have for years described crypto as a revolutionary technology—disempowering central banks, empowering private individuals, and perhaps even ushering in an era of world peace. But revolutionary for whom and in what way? That’s hard to say. Most crypto users are just making speculative bets; most crypto firms are just making or facilitating speculative bets themselves. Crypto is a casino, for the most part, and one without the free drinks.

These digital assets are “pretty much only good for illegal activities, like money laundering, narco-terrorism, and tax evasion,” Dennis Kelleher, a co-founder of Better Markets, a nonprofit advocating for financial regulation, told me. “Is there social or public interest in enabling a financial product like that?”

Then there are the volatility and the bubbles. Financial assets go up in price. They go down in price. This is their nature. But few things go up and down quite like crypto. NFTs came out of nowhere, sucked up billions of dollars, and collapsed. Initial coin offerings came out of nowhere, sucked up billions of dollars, and disappeared.

Even bitcoin—the most stalwart and liquid part of the industry—still sees wild swings in price. Two years ago, the internet and the airwaves were awash with advertisements painting crypto as an investment for the brave, a down payment on the future. These ads targeted everyone, especially Black investors historically shunned by Main Street financial institutions. “I want to ensure that communities like the one I come from are not left behind,” LeBron James said, announcing a multiyear deal with Crypto.com. It was a pump-and-dump on a multibillion-dollar scale. “Dumb money” got in to get smart money out. Black money got in to get white money out. The price of bitcoin quintupled. Then it crumbled.

Wealthy investors might be able to tolerate these kinds of losses. High-risk investors might be able to tolerate this kind of volatility. So too might crypto true believers, for whom HODL, or “Hold on for dear life,” is a common refrain. But most people don’t want to hold on for dear life.

If these were the only issues, the crypto winter might just be that—a season. The price of bitcoin and ether would recover, as they already are. People would forget about the brazen frauds and the sweaty ads and the endless hacks. New businesses would start; new promises would be made; new money would flow in.

But for Uncle Sam. From the very beginning, many crypto businesses have been engaged in something called “regulatory entrepreneurship.” It’s “ask forgiveness, not permission” as a business model: Start-up founders create a company in probable violation of American law, argue that the law should not apply to them, grow “too big to ban,” lobby intensively, and hope for the best. It might sound delusional, but it’s a common strategy in Silicon Valley, one that has worked out for Airbnb, Uber, Lyft, and DraftKings, among others.

For years, crypto companies argued that American financial regulations do not apply to them because, well, because. They pushed Congress to “clarify” the laws. And while Congress debated whether and how to do so, those firms allowed individual customers to buy, trade, and leverage their newfangled assets. Still, American financial companies abiding by American financial law largely avoided pouring money into or building products with crypto, because of the legal and regulatory risk. Goldman Sachs didn’t start packaging ether into derivatives; Bank of America would not let you pay your mortgage in bitcoin.

This weird status quo protected the broader American financial system from the fraud and chaos of the crypto markets. But it left individual crypto investors exposed to that fraud and chaos. “What makes my blood boil is the fact that actual people have been losing their shirts,” Yadav told me, “while we are over here stroking our chins about what exactly these asset classes represent.”

The collapse in November of FTX, Sam Bankman-Fried’s Bahamian crypto mega-exchange-slash-alleged-Ponzi-scheme, did not destabilize the financial system. But it did kill off the chances of Congress passing crypto-friendly legislation. And while Congress delayed, debated, and walked away, the SEC forged ahead, insisting that most crypto assets are securities, arguing that crypto companies have failed to register their businesses and structure them properly, and promising to force them into compliance. Coinbase and Binance are just the biggest and latest companies targeted; there have been dozens of enforcement actions in the past few years.

Crypto firms complain that this is innovation-stifling “regulation by enforcement”: Congress needs to clarify the rules before the SEC can administer them. “Imagine if more than a century ago regulators had cut Ford and General Motors off from banking services because they considered automobiles too risky,” Katie Haun, a prominent crypto investor, wrote in The Wall Street Journal in March. “Major U.S. policy decisions should be made by Congress and state legislatures, not by unelected officials.”

But many financial experts argue that the SEC’s authority is obvious. Most crypto assets are securities: “an investment of money in a common enterprise with profits to come solely from the efforts of others,” as defined in a 1946 Supreme Court case. (Bitcoin, notably, is not a security: Nobody is profiting from the efforts of bitcoin’s leadership, because bitcoin has no leaders.) “The SEC is trying to enforce the most basic investor protections we have,” Kelleher told me. “Truthfully, these are not aggressive cases. These aren’t close calls.”

To the crypto industry, they might be devastating, though. Many crypto firms do not have a business model that nets out if standard financial regulations apply—that’s the essence of regulatory entrepreneurship. Coinbase, the SEC alleges, is a jumble of conflicts of interest, one providing insufficient protections and disclosures to its customers and performing shoddy bookkeeping. Were it to restructure, it would likely be a smaller company with higher costs and narrower or even obliterated margins. (The company was profitable before the crypto collapse and is now operating in the red.) Binance is functionally a criminal enterprise, SEC Chair Gary Gensler argues—“an extensive web of deception” purposefully evading American law. (The SEC complaint includes a message that Binance’s chief compliance officer sent to a colleague, making Gensler’s case for him: “We are operating as a fking unlicensed securities exchange in the USA bro.”)

The risks to those two firms mirror the risks to the crypto industry as a whole. “It seems like this is just the beginning,” Edward Moya, a crypto analyst, wrote in a note to clients last week, adding that the “regulatory hammer” is swinging and predicting that traders would abandon positions, pull assets off exchanges, and dump speculative investments.

Does this mean crypto is dead? Yes and no. Crypto boosters’ grandest vision—of digital currencies changing everything, putting the Federal Reserve out of business, supplanting Wall Street and Main Street, and remaking the web as Web3—does seem over. Crypto is a trillion-dollar global asset class. Crypto is also a fringe industry that is offshoring and shrinking and growing more fringe, not one innovating alongside and outcompeting Big Finance.

But bitcoin and the blockchain are going to stick around, the former a popular alternative investment and a preferred currency of criminals, the latter a curious general-use technology. “The potential is the same,” Jerry Brito, the executive director of Coin Center, a crypto think tank and advocacy group, told me. Wilkinson, for his part, noted how helpful bitcoin had proved to be in getting money to people without access to strong and stable banking networks: human-rights activists in Ukraine, refugees fleeing climate disasters, families receiving remittances in Ghana and Kenya. Both said they believe the industry would benefit from having the scammy, scummy actors and cheap-and-easy money flushed out. “Some of these projects are potentially revolutionary,” Brito told me. “But I think a large portion of the ecosystem was completely cynical. That’s not helpful.”

I am still not sure whether many crypto projects are useful, yet alone revolutionary. Surely some use cases are out there waiting to be discovered, but good luck to crypto companies trying to persuade Americans to adopt them going forward. A recent CNBC survey found that 8 percent of adults have a positive view of crypto. A recent Pew survey found that just 2 percent of adults familiar with crypto are “extremely” confident in its safety and reliability. The past two years of price crashes, Ponzi schemes, and stolen funds have not just soured the government on crypto. They have soured the public too.