If the bloodbath in crypto prices in the first half of 2022, along with the Terra Luna crash, weren’t enough to rattle the crypto market, the FTX fiasco surely added more pain for the industry in the later stages of last year.
FTX’s implosion was the biggest and most spectacular crypto downfall in 2022.
The Bahamas-based exchange had started the year with a $32 billion valuation, hired celebrities including Larry David and Tom Brady for flashy Super Bowl ads, and put its name on the home arena of the NBA’s Miami Heat. FTX, which said it had more than a million users, positioned itself as a “white knight” that could rescue other crypto firms amid market turbulence earlier this year, as per a Reuters report.
But by November 2022, FTX went bankrupt just after a week in which a possible merger with rival crypto exchange Binance failed when the world’s largest crypto exchange backed out.
FTX founder Sam Bankman-Fried dealt with allegations that he had funnelled customer deposits to FTX’s affiliated trading firm, Alameda Research. He said that he is “deeply sorry about what happened” and acknowledged a “massive failure of oversight of risk management,” but said he did not intentionally commingle FTX’s user deposits with Alameda’s trading activity. He recently pleaded “not guilty” in court.
John Ray, the new CEO who has been brought in to oversee FTX’s bankruptcy, reportedly said he had never before seen “such a complete failure of corporate controls.”
Nonetheless, while the FTX fiasco remains the highlight of the crypto market’s turbulent past year, there have been numerous other crypto firms that have filed for bankruptcy.
List Of Crypto Firms That Filed For Bankruptcy
Crypto lender BlockFi was the first crypto company to follow FTX into bankruptcy, filing for Chapter 11 about two weeks after FTX’s collapse in November itself.
BlockFi had several ties to FTX, and it had relied on a $400 million FTX credit facility to stay afloat after competing crypto lenders Voyager Digital Ltd. and Celsius Network went bankrupt as a result of market turbulence earlier in 2022.
BlockFi has previously said it has 450,000 users and intends to ask a bankruptcy judge to allow some of them to withdraw funds. The users that would be able to withdraw funds have non-interest-bearing BlockFi Wallet accounts, which BlockFi created earlier this year as part of a $100 million settlement with the U.S. Securities and Exchange Commission.
2.Three Arrows Capital
The crypto hedge fund Three Arrows Capital (3AC) was the first major crypto firm to go bankrupt in 2022, brought down by the collapse of cryptocurrencies Luna and TerraUSD in May. Those meltdowns roiled crypto markets around the world, wiped out $42 billion in investor value, and led to an arrest warrant in South Korea for the cryptocurrencies’ developers.
Singapore-based 3AC, which was reported to have $10 billion in cryptocurrency earlier in 2022, began bankruptcy proceedings in the British Virgin Islands in June, as per the Reuters report. Professionals overseeing 3AC’s liquidation have said that its founders fled overseas and are not cooperating with efforts to recover assets for creditors.
Voyager, a New Jersey-based crypto lender, filed for bankruptcy in July in the United States after 3AC defaulted on a crypto loan worth more than $650 million.
Voyager had hoped to move its bankruptcy quickly through the U.S. court system, having reached an agreement in September to sell its assets for $1.4 billion in crypto to FTX. The proposed sale fell through following FTX’s implosion, and Voyager reopened discussions with other potential buyers, including the crypto exchange Binance.
Another crypto lender brought down by the Terra and Luna collapse, Celsius Network, began its U.S. bankruptcy case in July on shakier footing than Voyager.
Since then, Celsius has been embroiled in disputes over fraud investigations, disparate treatment of customer accounts, customer privacy, and its spending on a new bitcoin mining facility, as per the report.
Celsius’ bankruptcy judge has appointed an examiner to investigate whether Celsius operated as a Ponzi scheme and to broadly review the company’s finances. Celsius has said it welcomes an independent review, but it has expressed concern about overlapping investigations undertaken by its creditors, state securities regulators, and the bankruptcy examiner.
The latest to join the list of bankrupt crypto firms is cryptocurrency lender Genesis Global Holdco. It filed for bankruptcy last week, becoming the latest crypto company to do so after the collapse of FTX, the exchange founded by Sam Bankman-Fried, as per a New York Times report.
A year ago, Genesis and a group of other large lending firms drew millions of customers with the promise that they could deposit their crypto holdings and earn sky-high returns. But Genesis’ bankruptcy filing makes it the fifth major crypto lender to fail since the FTX fiasco.
While Genesis did manage to survive for longer, it suffered in the fallout from FTX’s implosion. In November, Genesis said it was freezing withdrawals, citing “market turmoil” caused by the bankruptcy of Mr. Bankman-Fried’s business.
As per the report, the filing in bankruptcy court in the Southern District of New York covered three entities: Genesis Global Holdco and two of its subsidiaries, Genesis Global Capital and Genesis Asia Pacific.
Now it remains to be seen whether the remaining crypto firms in the industry end up joining this list or are able to continue operations and even grow amid hopes of the crypto market’s bounce back.
Layoffs In Crypto Industry
Besides the bankruptcies of crypto firms and the mass layoffs of tech giants such as Microsoft, Google, and Amazon occupying the headlines, even crypto firms have been continuously laying off employees since the past year.
Here’s the long list of the crypto industry’s layoffs announced in the past few months, as per CoinDesk.
Jan. 23, 2023: Crypto exchange Gemini is cutting another 10%, or about 100 employees, from its job roster. Its headcount was about 1,000 employees in November 2022, according to PitchBook data.
Jan. 17, 2023: Fidelity-backed exchange OSL cuts workers by a third, but did not disclose reduction amount.
Jan. 13, 2023: Crypto.com said it is cutting its workforce by about 20%. The exchange has around 3500-4500 employees, placing its current round of layoffs at around 700-900 employees. CoinDesk has rounded to the latter.
Jan. 12, 2023: Cryptocurrency brokerage Blockchain.com is letting go of 28% of its workforce, about 110 employees.
Jan. 10, 2023: Ethereum software firm ConsenSys, which has an estimated 900 staffers, is planning to reduce its headcount by 100.
Jan. 10, 2023: Coinbase is planning to cut around 20%, or 950 individuals, from its workforce.
Jan. 6, 2023: NFT marketplace SuperRare cuts staff by 30%, bringing its roster to about 50 employees from an estimated 70, according to a SuperRare spokesperson.
Jan. 5, 2023: Crypto exchange Huobi reduces 20% of its headcount.
Jan. 5, 2023: Crypto lender Genesis Global Trading lays off 30% of its staff, reducing its headcount by an estimated 62 employees and bringing its total roster to 145. Genesis is owned by Digital Currency Group, which also CoinDesk’s parent company.
Jan. 5, 2023: Crypto bank Silvergate Capital (SI) cuts 200 jobs, about 40% of its workforce.
Dec. 9, 2022: Crypto trading firm Amber Group lays off 40% of its workforce, reducing its headcount by about 300.
Dec. 5, 2022: Australian crypto exchange Swyftx cuts 90 jobs, reducing its workforce by 35%.
Dec. 5, 2022: Bybit to lay off 250 employees, a 30% reduction.
Nov. 30, 2022: Crypto exchange Kraken cuts 30% of its staff, an estimated 1,100 people.
Nov. 24, 2022: Argentine crypto exchange Lemon Cash sheds 100 jobs, about 38%, of its 296-employee roster.
Nov. 18, 2022: Bitcoin financial-services firm Unchained Capital cuts its staff by 15%, or 16 people.
Nov. 10, 2022: Crypto exchange Coinbase (COIN) lays off 60 employees.
Nov. 9, 2022: Meta Platforms (META) slashes more than 11,000 jobs, an estimated 13% of its workforce.
Nov. 4, 2022: Web3 gaming studio Mythical Games lays off 10% of its employees, an estimated 32 individuals.
Nov. 3, 2022: Payments processor Stripe cuts more than 1,000 jobs, about 14% of its workforce.
Nov. 2, 2022: Dapper Labs reduces its workforce by 22%, about 135 staff members.
Nov. 2, 2022: Crypto exchange BitMEX cuts 20% of its staff, about 53 employees.
Nov. 2, 2022: Digital Currency Group cuts nearly 13% of its staff, placing its headcount at 66. The crypto conglomerate owns CoinDesk.
Nov. 1, 2022: Crypto finance firm Galaxy Digital to cut one-fifth of its workforce, an estimated 170 employees.
Oct. 13, 2022: Crypto trading firm NYDIG lays off about 33% of its staff, about 110 employees.
Oct. 11, 2022: Market maker GSR cuts its staff by 10%, an estimated 30 employees.
Oct. 6, 2022: Crypto exchange Crypto.com downsizes by 2,000 employees, about 30%-40% of its staff.
Oct. 1, 2022: Indian crypto exchange WazirX lays off roughly 40%, about 50 to 70 employees.
Sept. 23, 2022: Stakefish staff is reduced by 25% following Ethereum Merge, about eight employees.
Sept. 16, 2022: Fintech startup TrueLayer trims 10% of its staff, about 45 employees.
Sept. 1, 2022: Social media giant Snap (SNAP) disbands its Web3 team, laying off 20% of its staff, about 1,459 employees.
Sept. 1, 2022: A second round of layoffs at Brazilian crypto unicorn 2TM reduces the firm’s staff by 15%, about 100 employees.
Aug. 17, 2022: Crypto broker Genesis Global Trading cuts 20% of its 260-person workforce. Genesis, like CoinDesk, is owned by Digital Currency Group.
Aug. 11, 2022: Crypto miner Core Scientific (CORZ) cuts 10% of its staff.
Aug. 2, 2022: Broker Robinhood Markets (HOOD) slashes 780 jobs, about 23% of its workforce.
July 29, 2022: Crypto exchange CoinFLEX reduces is 50%-60% of staff.
July 21, 2022: Blockchain.com cuts 25% of its staff, about 150 jobs.
July 14, 2022: NFT marketplace OpenSea lays off roughly 20% of its staff.
July 7, 2022: Compass Mining cuts 15% of its staff, lowers executive compensation.
July 5, 2022: Crypto exchange Bullish.com reportedly cuts about 10% of workforce.
July 4, 2022: Crypto lender Celsius Network reportedly cuts 150 jobs amid restructuring.
July 1, 2022: Cosmos-builder Ignite cuts its headcount by more than 50%, according to former employees.
June 28, 2022: Crypto exchange Huobi Global could cut over 30% of its workforce as China’s crackdown on crypto leads to a fall in revenue.
June 27, 2022: Australian crypto exchange Banxa lays off 70.
June 24, 2022: European crypto exchange Bitpanda cuts its staff by 270.
June 20, 2022: Bybit to reduce its workforce by 30%.
June 14, 2022: Coinbase lays off around 1,100 employees.
June 13, 2022: Crypto.com, BlockFi to cut more than 400 jobs.
June 3, 2022: Brazilian crypto unicorn 2TM lays off more than 80 employees.
June 2, 2022: Middle Eastern crypto exchange Rain reportedly lays off dozens of employees.
June 2, 2022: Gemini cuts 10% of its staff.
May 26, 2022: Latin American crypto exchange Bitso lays off 80 employees.
May 24, 2022: Argentinian crypto exchange Buenbit cuts 45% of its staff, roughly 80 people.
April 4, 2022: Crypto exchange BitMEX lays off 75 workers.
For the latest and interesting financial news, keep reading Indiatimes Worth. Click here.