It has been a year of rough seas for the cryptocurrency industry, with market crashes, hacks, and regulatory issues causing many investors to question the sector’s future.
Despite these challenges, there have also been significant events that have reinvigorated faith in the blockchain industry. I have included the best and the worst events that happened, saving the best for the end.
Terra UST Collapse
Anchor, a platform that offered high yields to users who deposited their Terra stablecoin (UST) on the platform, saw a significant drop in UST deposits in May. Anchor was home to 75% of UST’s entire circulating supply, totalling $14 billion out of a total circulating supply of $18 billion. Critics argued that the high yields offered by Anchor were unsustainable and artificially propped up by Terraform Labs (TFL) and its backers.
Eventually, a loss of confidence in the Terra protocol and mass withdrawals of funds initiated a bank run. UST deposits on Anchor dropped from $14 billion to $3 billion, leading to its decoupling from the dollar peg. The head of Terralabs, Do Kwon, is being looked for by South Korea and appears on Interpol’s Red List, but he is still on free foot. Get more details here about what happened to UST from its beginning to its demise.
FTX Scandal
The former CEO of cryptocurrency exchange FTX, Sam Bankman-Fried, was arrested and jailed because of multiple fraud charges involving the exchange. The scandal is one of the most significant financial crimes in American history, and FTX filed for Chapter 11 bankruptcy protection in November 2022 after its valuation plummeted from $32 billion to bankruptcy in a matter of days.
SBF was indicted on eight counts, and a class-action lawsuit was filed against Bankman-Fried in November, alleging that he created a fraudulent cryptocurrency scheme. Bankman-Fried has been released from custody on a $250 million bond and will be confined to the Northern California area while wearing an electronic monitoring bracelet. SBF pleaded not guilty to all charges on 3 January 2023. Please find out more details about FTX and its collapse here.
It is essential for those involved or considering involvement in the cryptocurrency market to use a reputable, regulated, and efficient broker, such as Easymarkets, to ensure the security of their investments. This step is crucial to avoid falling victim to scams described in this article. Regardless of your trading style, it is essential to do your due diligence to protect your money and avoid losses.
Cryptocurrency donation Ottawa
One of the year’s key events was the Ottawa protests and the subsequent implementation of the Emergencies Act in Canada. The Act allowed Canadian banks to freeze accounts connected to the demonstrations without court orders. This act resulted in a donation spree of approximately $1.2 million in bitcoin for Ottawa convoy protesters through Tallycoin, a crowdfunding platform that facilitates small bitcoin donations for free.
Cryptocurrency donations in Russia and Ukraine
The Russia-Ukraine war led to an increase in cryptocurrency donations for war relief in Ukraine and the acceptance of cryptocurrency payments by the Ukrainian government, resulting in the inflow of approximately $30 million in digital assets. The crisis also spurred the adoption of cryptocurrencies in Russia as a means of sending money across borders during a time of economic hardship and sanctions.
With their ability to facilitate fast, cross-border transactions at any time of day and their resistance to censorship, is it possible that cryptocurrencies will become the most popular fundraising method? Read more about these and other cases of crypto donations in this interesting article.
Conclusion
While it is important to consider the potential risks associated with using cryptocurrencies, it is also worth noting the unique qualities that make them attractive for specific purposes. Cryptocurrencies are unregulated and can be used for fraud, but, on the other hand, governments and banks cannot interfere in transactions or block withdrawals.
We can be sure that crypto is here to stay but how the cryptocurrency industry will fare in the coming years remains to be seen. However, with increasing adoption by mainstream companies and a greater understanding of the potential benefits of blockchain technology, there is reason to be hopeful for the future of crypto.
