- It’s been another crazy year in the crypto space, with plenty of huge events taking place
- From major arrests to billion-dollar implosions, 2022 has seen it all
- What were the top stories of 2022?
2022 has been a year like no other, with the bear market, crypto contagion, hacks and exchange collapses sucking almost any enjoyment out of the space this year. There has been some time for mirth along the way however, which we’ll try to express as we look back at the top five biggest stories in crypto in 2022.
5. Bitfinex Money Launderers Unmasked
This year saw one of the more unusual episodes in crypto history – the suspected launderers ₿119,756 stolen in the 2016 Bitfinex hack were arrested in February after getting busted by a Walmart gift card.
Self-styled entrepreneur, Forbes writer and atrocious rapper Heather Morgan (aka Razzlekhan) was arrested on suspicion of conspiring to launder the bitcoin after a more than year-long investigation, along with blockchain investor Ilya Lichtenstein. The pair were arrested in their New York apartment with access to the still unspent ₿94,000 after the purchase of a $500 Walmart gift card was linked back to the bitcoin and then to them.
The pair made the most unlikely criminal couple, which led many to suspect that the actual hackers are still out there.
4. Ronin Bridge Hack
The Ronin Bridge hack took place in March and saw hundreds of millions of dollars worth of cryptocurrencies stolen after attackers managed to compromise the majority of validators needed to confirm transactions to themselves. The actual valuation differed depending on various factors, with figures of $540-$650 million cited, but regardless, it instantly became one of the biggest crypto hacks of all time.
What made the Ronin hack worse was that the North Korean hacking group Lazarus was confirmed to be behind it, meaning that it would go directly to the rogue state’s rocket program, and once again raised the concerns that insecure DeFi protocols were giving groups like Lazarus an easy way to fund their military.
3. TerraUSD/LUNA Collapse
The TerraUSD/LUNA collapse would have been a major story anyway, but it was made bigger due to the nature of the central figure – Do Kwon. Kwon’s arrogance at the perceived success of his algorithmic stablecoin model, which used market dynamics to keep UST pegged at a dollar, was a sight to behold, and many in the crypto space soon turned against him, warning that the crypto gods were often particularly unkind to those who boasted to such a degree.
And they weren’t wrong. When the market wobbled in May, LUNA and UST wobbled with it…and they kept on wobbling. They wobbled so much they couldn’t get up, and fell instead in a death spiral. Within days both coins were dead, $40 billion worth of user holdings were rendered worthless and Kwon became a wanted man.
If schadenfreude was a noise, it would have been heard from space.
2. Ethereum Moves to Proof-of-stake
Amid the start of a bear market, hacks and crypto firms collapsing like dominoes came some good news – on September 15, Ethereum successfully transitioned to a proof-of-stake consensus mechanism. Over four years worth of hard work finally paid off for Ethereum developers as the first validators began confirming blocks, with the home of DeFi now able to shrug off the claims that NFTs on its blockchain were bad for the planet.
The move was generally seen as positive for the space, although purists argued that it would lead to Ethereum becoming more centralized, but the improvement in the image presented to the outside world was arguably of more value.
The switch was the major brick in a long road to full transition, which will see ETH become a deflationary currency and transactions become much faster and cheaper in 2023.
1.FTX Goes Bust
It’s tempting to think that given that it happened a matter of weeks ago and the repercussions are still being felt today, the collapse of FTX feels bigger than it actually was. But even if it had happened on January 1, 2022, it would still occupy top spot.
The fall from grace of Sam Bankman-Fried and his FTX empire, tentatively valued at $32 billion in September, was nothing short of spectacular – over just five days in early November he went from being crypto’s representative in Washington to begging other exchanges for handouts to meet customer withdrawals, having used customer funds to prop up Alameda Research and losing billions when the value of the FTT token was crushed by Binance selling half a billion dollars’ worth. And now he’s in jail awaiting extradition to the U.S.
The story is, of course, far too big to contain in a couple of paragraphs, and the speed of events, the way they unfolded and the sheer magnitude of it all will undoubtedly make a Netflix documentary one day. Suffice it to say, the magnitude of the loss, both to the crypto space and the individuals affected, propels this to top spot in our 2022 stories of the year, for all the wrong reasons.
2022 Won’t be Missed
2022 leaves us with a very sour taste in our mouths, with the greed of corporations and the individuals heading them up leaving the average user lucky if they didn’t get cleaned out in some way.
With the bear market still in full swing and the crypto space about to experience its first full financial recession, the odds for 2023 being much better aren’t great, but hopefully the biggest shocks are out of the way.