The cascade of legal charges dropped on Sam Bankman-Fried and his collapsed empire this week will do little to dispel the regulatory fog surrounding crypto.

Why it matters: At first glance, the arrest, criminal indictment and civil charges — brought by the SEC and CFTC — against Bankman-Fried seem a symbolic end to the initial, Wild West era of crypto.

• His attorney previously told Axios, via an emailed statement: "Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options."

The big picture: Former regulators, legal scholars and defense attorneys say that even if Bankman-Fried is convicted of criminal charges and loses the civil cases, it will do little to immediately change standards in the U.S. crypto industry — where many companies don't comply with the financial regulations that, say, banks are held to.

• Crypto broker-dealers and exchanges "do not observe requirements to segregate customer assets, to prohibit conflicts of interest, to have active procedures to prevent fraud and manipulation," said Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission and a senior fellow at Harvard University's Kennedy School of Government, of the prevailing industry status quo.
• Crypto players argue that such rules don't apply to digital assets.

Catch up fast: For years, efforts to regulate crypto have been mired in debates over whether digital assets can be regulated under existing law, or whether new laws tailored to the technology are needed.

State of play: In theory, litigation can provide some answers. But in practice, the criminal case against Bankman-Fried will do little to clarify the rules.

• That's because the criminal charges center on fairly straightforward allegations of fraud rather than technical questions about the nature of crypto.
• "It's alleged that he used money obtained from investors and made material misrepresentations to them as to how that money was going to be used or invested. That's it," says Ira Sorkin, a well-known white-collar criminal defense attorney who represented convicted Ponzi schemer Bernie Madoff.

Yes, but: Some say the SEC's civil charges against Bankman-Fried might shed some light, at least, on whether digital assets qualify as securities, and are therefore subject to SEC regulation (as opposed to commodities subject to CFTC oversight).

• After all, if you can be successfully sued by the SEC for defrauding customers and investors under existing securities laws, that suggests those laws actually apply to you.
• The problem is it could take years to get the answer. And it's uncertain that the resolution of cases surrounding FTX will be broadly applicable to the world of crypto and other crypto companies, Howell Jackson, a professor at Harvard Law School, says.

What's next: At the very least, the FTX debacle has stimulated a fresh round of debate — and Congressional hearings — on the future of regulation. Massad and Jackson both say there's still a need for Congress to write laws to clarify the agencies' roles in the crypto market.

• "There are also a lot of people out there who will continue to lose money if the industry is allowed to persist with current practices," says Jackson.