A Timeline of Crypto Platform Crashes
In the below timeline, we delve into the series of events that rocked the crypto world from 2022 to 2023, including FTX's Super Bowl ads, the Federal Reserve's rate increase, TerraUSD's devaluation, and the downfall of prominent crypto firms. As regulatory bodies take action and market conditions shift, these events have significantly impacted the cryptocurrency landscape, leading to widespread consequences for investors and the industry as a whole.
2022: The Year of Crypto Market Turbulence
- FTX and other crypto companies run their first Super Bowl ads. Bitcoin is trading back down at $42,259.28 as the market starts to price in the Federal Reserve’s coming rate increases.
- The Fed raises its benchmark rate by a half-percentage point to tame soaring inflation, sparking a selloff in speculative investments, including bitcoin.
- Also in May, the cryptocurrency TerraUSD falls below its fixed value, triggering a selloff.
- The crypto lender Celsius freezes all account withdrawals, while Babel Finance suspends withdrawals, citing “unusual liquidity pressures.”
- The hedge fund Three Arrows Capital defaults on loan payments to the crypto lender Voyager. Three Arrows was heavily leveraged with billions of dollars in loans that it defaulted on. Its other crypto lenders included Genesis and BlockFi.
- Voyager files for bankruptcy protection, saying it faced a run on the bank.
- CoinDesk publishes an article saying a big chunk of Alameda Research’s assets consists of a token created by FTX, which the firm might have overvalued, setting off a run on FTX. FTX agrees to be taken over by rival Binance after succumbing to a sudden liquidity crunch, with users pulling money and cryptocurrency out of their accounts.
- FTX’s Sam Bankman-Fried is arrested in the Bahamas after federal prosecutors in New York file criminal charges, and he is later transferred to U.S. custody.
2023: A Time of Regulatory Reckoning for the Crypto Industry
- The Securities and Exchange Commission sues the crypto firms Genesis and Gemini over a lending product that allegedly violated investor-protection laws. CoinDesk hires investment bankers to help it explore options, including a sale.
- Genesis files for chapter 11 bankruptcy protection.
- The Securities and Exchange Commission proposes a rule that could make it harder for many asset managers to invest customers’ money in cryptocurrencies. The SEC charges Do Kwon, the founder of TerraUSD and Luna, with misleading U.S. investors who purchased billions of dollars’ worth of the failed cryptocurrencies.
- Federal prosecutors unveil a new indictment against Sam Bankman-Fried, charging him with additional criminal counts and detailing allegations that he engaged in conduct that led to FTX’s collapse.
- FTX co-founder Nishad Singh pleads guilty to fraud charges and agrees to cooperate against Sam Bankman-Fried, making him the third person in Mr. Bankman-Fried’s orbit to do so.
- In March, Silvergate Capital says recent events leave it at risk of being “less than well-capitalized” and that it is evaluating the effect those events have on its ability to continue as a going concern. It later announces it is shutting down. The second-largest stablecoin, Circle Internet Financial’s USD Coin, slips below its $1 peg over concerns that part.
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