SAN FRANCISCO - The price of Bitcoin is surging again. Major financial firms are showing renewed interest in digital currencies. And crypto fanatics are celebrating the end of a long period of depressed prices and business collapses.

But the sudden explosion of optimism has come at a turbulent moment for the cryptocurrency industry.

The last time crypto prices were skyrocketing, the industry’s most influential executives were Sam Bankman-Fried and Zhao Changpeng, rival billionaires whose online sparring could move markets. Now Bankman-Fried, founder of the FTX crypto exchange, and Zhao, who ran the world’s largest crypto firm, Binance, both face prison time after parallel falls from power.

A US jury convicted Bankman-Fried in November on fraud and conspiracy charges stemming from FTX’s collapse. Three weeks later, Zhao pleaded guilty to a money laundering charge and agreed to relinquish control of Binance.

With the two men out of the picture, a crowded field of crypto entrepreneurs, Wall Street executives and government regulators are vying to control the industry’s next chapter. Their scramble for influence could determine whether crypto survives in the United States, where a regulatory crackdown has made it increasingly difficult for the industry to operate.

Some executives have argued that the crypto world needed to purge figures like Zhao and Bankman-Fried – aggressive entrepreneurs who gave priority to growth over compliance – to win over regulators and the public.

After Zhao’s guilty plea, Mr Brian Armstrong, chief executive of US-based crypto exchange Coinbase, hailed the case as a turning point for the industry.

“We now have an opportunity to start a new chapter,” Mr Armstrong posted on social media in November. “This industry should be built right here in America, in a compliant way, under US law.”

But the crypto world remains filled with companies that engage in risky business practices and do not offer much transparency about their experimental products.

“There is no intrinsic value to any of this,” said Professor Hilary Allen, an expert on financial regulation at the American University. “The only hope is to have more money sloshing around, and more people willing to buy into it to create demand.”

Crypto has always had its share of influential leaders. The vision behind Bitcoin, the original and most valuable digital currency, was first laid out by someone using the pseudonym Satoshi Nakamoto, whose mysterious identity became its own brand.

As the crypto world expanded, new centres of power and influence emerged. Zhao founded Binance in 2017 and built it into the world’s largest marketplace for buying and selling experimental coins. The exchange’s size and reach turned Zhao into a star on Twitter, now known as X, where he accumulated more than eight million followers, dismissing government lawsuits and allegations of illegal conduct as disinformation spread by crypto’s enemies.

Zhao’s chief rival was Bankman-Fried, who appeared on billboards and magazine covers, cultivating a persona as the responsible adult who would help the fledgling industry work with regulators.

In the end, both Zhao and Bankman-Fried fell from grace. Bankman-Fried is set to be sentenced in March and faces the prospect of decades behind bars. Zhao is likely to receive a lighter sentence, with prosecutors expected to request about 18 months.

A new generation of executives is already emerging as the industry’s top cheerleaders. Mr Paolo Ardoino, an outspoken crypto enthusiast with a vast online following, recently took over as CEO of Tether, the company that oversees one of the most popular digital currencies. At Binance, Zhao was replaced by Mr Richard Teng, a key executive at the exchange who had been groomed to step into Zhao’s shoes.

On paper, Mr Teng is Zhao’s opposite. The Binance founder was antagonistic toward regulators, while Mr Teng is a veteran of the Monetary Authority of Singapore, the country’s central bank.

Binance’s future is uncertain. As part of a settlement in November, the company agreed to pay a US$4.5 billion (S$6 billion) fine to several government agencies and have a US monitor embedded in the business for the next three years.

“My general sense is there’s a real ‘wait and see’,” said Mr Jeremy Allaire, CEO of Circle, issuer of the USDC stablecoin. “I don’t think anyone knows the details of what that monitorship means.”

Arguably the biggest beneficiary of crypto’s current reshuffle is Coinbase’s Mr Armstrong, who declared in December that Bitcoin “may be the key to extending western civilization.” Coinbase’s share price has nearly tripled over the past six months, even after the Securities and Exchange Commission sued the firm as part of the agency’s broad crackdown on the industry.

“Coinbase is now the last man standing,” said Mr John Todaro, an analyst at Needham who tracks the crypto industry. “There’s less competition out there.” NYTIMES