The Year in Crypto So Far

Concept cryptocurrency illustration. stock photo
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This will go down in the books as a very bad year for the crypto industry and its entire ecosystem.

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Despite starting the year rather strongly, the crypto winter quickly seeped in — and never left. It was a year of collapses, losses, lawsuits and angry and reeling investors. It was a year that started with the Luna/Terra and Three Arrows collapses, which then took down Voyager and Celsius and left thousands of investors hit with huge losses. A year that saw Bitcoin down 75% from its Nov. 10, 2021, all-time-high. And now, of course, the FTX fiasco and Sam Bankman-Fried’s demise are engulfing the entire industry.

All of this is affecting confidence in the crypto markets and might delay institutional adoption and hasten regulation. 

But amid this doom and gloom, there were also some developments that were widely hailed as positive for the industry. So, for holiday spirit’s sake, let’s start with those. 

The Merge

The Merge — Ethereum’s full transition to proof of stake (PoS) from proof of work (PoW) — was completed successfully on Sept. 15, to the admiration and acclaim of many.

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The upgrade, which had been delayed for many years, was hailed as one of the most decisive moments in crypto history for several reasons — notably because of the purported 99.9% reduction in energy consumption, but also as it was an enormous technological feat and engineering undertaking.

“The Merge is one of the most important technological upgrades in the history of tech. From a community standpoint, it was one of the most organized events of all time,” said Matt Nelson, product manager for Besu at ConsenSys and one of the core developers who contributed to The Merge. “Two months after the transition, we can confirm that The Merge delivers on its promise as the following are true about Ethereum today: CO2 savings of approximately 1.8 million tons of CO2 over the last two months.”

Nelson added that, two months in, The Merge changed the hardware requirements for running a node — leading to over a third of the network staking from home and a constant increase in the geographical distribution of node providers. In addition, he said, it has redesigned the economics of Ethereum. 

“The reduction in ETH issuance and a portion of transaction fees being burned have created considerable deflationary pressure on ETH,” he said. “The PoS Chain is working as expected; nothing has broken, no replay attacks and the noise around forked chains has died.”

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According to Harrison Hines, co-founder and CEO of Fleek, The Merge was “by far” the most important story of 2022. 

“It was something that people talked about for seven-plus years, with many claiming it would never happen or that it wasn’t possible,” Hines said. “The fact it was executed flawlessly, without a single hiccup, was remarkable. A lone bright spot in an otherwise dark year in crypto. I believe the magnitude of the event outshines the rest of the darkness that happened in 2022.”

Terra, Voyager and Celsius

While this seems like it happened eons ago, it was just in May that Stablecoin TerraUSD (UST) crashed — a canary in the mine of sorts for events still unfolding. 

Stablecoins are cryptocurrencies whose aim is to remain stable and have low volatility. They can be pegged to a currency or a commodity, such as gold.

Terra, a so-called algorithmic stablecoin, was pegged to the dollar and could be used in conjunction with LUNA, Terra’s non-stablecoin crypto, or as a standalone token, according to CoinMarketCap.

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The collapse of Terra and the loss of more than $50 billion in values of the Luna and UST coins over a three-day period created a domino effect and immediate issues for many market participants, leading to the eventual “cryptopocalyse,” and “many of these market participants had to halt operations, limit withdrawals or take emergency bailout loans to survive,” according to Celsius’ bankruptcy filing.

Following this, several crypto platforms collapsed. Crypto lending platforms Voyager Digital and Celsius promised eye-popping yields to their customers — that is, until they both filed for bankruptcy in early July due to their exposure to the now infamous Three Arrows Capital, which itself went bankrupt after the implosion of Terra LUNA and its TerraUSD (UST) stablecoin.

“The biggest story for crypto in 2022 is not one specific story but rather the series of domino-like collapses involving Three Arrows, Celsius and FTX,” said Joseph Collement, general counsel at “What these failures of what had been considered prestigious centralized exchanges and funds underscored to the world — and especially to those who use crypto in one form or another — was that if you allow your crypto to be held by someone else, then it’s not really your crypto. Indeed, 2022 was the year of Not Your Keys, Not Your Coins.”

FTX/Sam Bankman-Fried

The FTX debacle is just at its nascent stages, yet troubles keep on piling up; while the untangling of the bankruptcy proceedings might take a while, the damage is spreading fast, taking down with it several other platforms, celebrities and thousands of investors. 

The fall of Bankman-Fried, once the golden child of the crypto industry, has sent shockwaves throughout the world and fears (and the reality) of contagion are rattling everyone. 

FTX, one of the largest cryptocurrency exchanges, and its more than 130 subsidiaries filed for Chapter 11 on Nov. 14.

On Nov. 17, John Ray, the newly appointed CEO of FTX, said in a filing to the U.S. Bankruptcy Court for the District of Delaware: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

Contagion is spreading quickly as well. Rival platforms such as, which mistakenly sent $400 million to the wrong wallet on Nov. 13, have had to assuage edgy investors. BlockFi, which was bailed out earlier this year by FTX, and is now reportedly looking at filing for bankruptcy and has halted withdrawals.

On Nov. 16, Genesis Global announced it was halting withdrawals at its lending business, due to the “unprecedented market turmoil” FTX has created. In turn, Gemini’s yield program, Gemini Earn, also announced it will not be able to meet customer redemptions within the service-level agreement of five business days. Gemini was founded by the Winklevoss brothers.

Bittrex Fine: The Largest Virtual Currency Enforcement Action To Date

In October, the Treasury Department fined crypto trading platform Bittrex $29 million for apparent violations of sanctions against Crimea, Cuba, Iran, Sudan and Syria — representing the largest virtual currency enforcement action to date, according to a statement.

Bittrex agreed to pay $24.2 million to the Treasury’s Office of Foreign Assets Control (OFAC) to settle its potential civil liability for 116,421 apparent violations of multiple sanctions programs, according to the department.  

“As a result of deficiencies related to Bittrex’s sanctions compliance procedures, Bittrex failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan and Syria from using its platform to engage in approximately $263,451,600.13 worth of virtual currency-related transactions between March 2014 and December 2017,” OFAC said.

The Crypto Winter

This year saw many layoffs in the crypto industry, including at Coinbase, Gemini and Robinhood. With the FTX situation, several other companies have announced they are cutting their workforces, too. 

As of Nov. 13, the cryptocurrency sector had laid off 4,695 employees, representing 4% of all technology layoffs this year, CoinGecko reported. 

Solana NFT protocol maker Metaplex announced on Nov. 17 that it had  “made the difficult decision to part ways with several members of the Metaplex Studios team.”

Metaplex Studios CEO Stephen Hess tweeted, “While our treasury wasn’t directly impacted by the collapse of FTX and our fundamentals remain strong, the indirect impact on the market is significant and requires that we take a more conservative approach moving forward.”

The industry’s total market cap also took an enormous hit, down to $780 billion on Nov. 18, according to TradingView data. Far gone are the days (November 2021) when the value of the cryptocurrency market hit $3 trillion.

As for Bitcoin, the No. 1 asset in terms of market cap, it has fallen 75% from its Nov. 10, 2021, all-time-high of $68,789.63, according to CoinMarketCap data. Its market cap stands around $304 billion, a far cry from its largest market cap of $1.28 trillion, in November 2021. 

And Yet Believers Will Be Believers

Despite all of the turbulence, chaos and pain in the industry, some see its prospects as flourishing in the not-so-far future. 

Binance CEO Changpeng “CZ” Zhao announced that he was forming an industry recovery fund, to help projects that are otherwise strong but in a liquidity crisis, to reduce “further cascading negative effects of FTX.”

“Crypto is not going away,” he tweeted Nov. 14. “We are still here. Let’s rebuild.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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