The cryptocurrency crash of last year continues into 2023, as several major cryptocurrency companies collapse or halt business; here’s a look at that damage so far.
January 20: Genesis, a major cryptocurrency lender, announces that it has filed for Chapter 11 bankruptcy, another victim of the FTX collapse.
December 21: Core Scientific, one of the largest publicly traded bitcoin mining companies, filed for bankruptcy with passive up to $1.3 billion among its 1,000-5,000 creditors, though it continues with its mining operations.
November 28: BlockFi, another major cryptocurrency lender, files for bankruptcy following the collapse of FTX, with which it had significant financial ties, listing $1.3 billion in liabilities and going out of business.
November 11th: FTX, one of the top exchange trading platforms by volume that became more than just an exchange with retail investors able to trade crypto derivatives, announced it would file for bankruptcy, sending shockwaves through an already damaged crypto industry with his passive reaching up to $9 billion while its CEO Sam Bankman-Fried faces criminal charges.
August 9: Hodlnaut, a Singapore-based crypto lender, stops his withdrawal, token swapping, and deposits citing “market conditions,” and several days later files an application for protection from creditors in the High Court of Singapore.
July 5th: Voyager Digital, a cryptocurrency broker, files for Chapter 11 following a $660 million default by Three Arrows Capital, a cryptocurrency hedge fund, which halted withdrawals days before filing for bankruptcy, and now must $1.3 billion among his 100,000 creditors.
July 5th: Three Arrows Capital (3AC), a Singapore-based crypto hedge fund managing nearly $10 billion in assets, files for Chapter 15 bankruptcy to seek protection from creditors following the collapse of popular cryptocurrency TerraUSD, in the that 3AC had a significant investment.
May 12: TerraLabs, a popular blockchain with its cryptocurrency TerraUSD (UST) pegged to the US dollar, halts operations as the cryptocurrency drops to 35 cents and its LUNA companion token, meant to stabilize the UST price, falls from $80 to less than 10 cents, triggering a crypto crash and erasing $1 billion in assets as its founder Do Kwon faced a warrant by South Korean officials.
The crypto industry had been a wild west and suffered several crashes since the first cryptocurrency, Bitcoin (BTC), was invented in 2008. Most of the crashes were traced back to Bitcoin, the most popular cryptocurrency to date. In 2011, Bitcoin plummeted from $32 to $0.01 after Mt. Gox, then the leading crypto exchange, revealed a security breach that resulted in the Stole of 850,000 BTC. From 2013 to 2015, Bitcoin again saw losses and went from $1,000 to $170 in just two years after Mt. Gox halted withdrawals in 2014 and US financial authorities began questioning Bitcoin and sought to start regulation.
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