In 2022, several crypto industry heroes were revealed to be rotten eggs. There’s more, however.Although the cryptocurrency market has a history of acting irrationally, none could have predicted that established titans would engage in such epic levels of financial mismanagement. Everyone was taken aback by the new industry’s move toward a more shady state of things, particularly after the exhilarating thrill of the bull run the previous year.
Corruption and fraudulent conduct blighted the year 2022. Big money was being fraudulently routed with great daring and originality in an industry that professes to have traceable and transparent transactions. However, no one knew what to do when NFTs were being stolen. A mess was made in the DeFi area by rug pulls. The markets have already lost trillions of dollars.All that is left now are some of the bigwigs’ stories from the past, which teach those paying close attention valuable lessons about ineptitude and hubris. Let’s review the last year.
The Crash Of Terra
The full circumstances behind the algorithmic stablecoin UST from the Terra ecosystem remain unknown. Regulators and Do Kwon’s detractors, however, have swiftly labeled it a case of market manipulation.Only after the ecosystem had suffered a devastating fall from grace was its formerly haughty CEO humbled. The resulting cryptocurrency crisis shook the whole worldwide market for digital currencies, wiping off an estimated $60 billion.In any event, heightened examination of stablecoins, in general, resulting from the collapse of the whole ecosystem. Following the collapse, international authorities began putting up numerous suggestions for properly regulating stablecoins to avoid such occurrences in the future.However, the infection quickly spread across the market, which brings us to our next issue.
FTX Saga: Sam Bankman-Fried Exposed
The demise of FTX, the industry’s golden child, has the most impact on the market. As FTX filed for Chapter 11 bankruptcy in November, Sam Bankman-Fried announced his resignation as CEO of the business. He’s now being referred to as the next Bernie Madoff.The community took issue with statements made during the media tour that stated “I’m an imbecile, not a crook.” The former FTX executive was charged with a long list of offenses and accused of defrauding about a million individuals.In only three years, Bankman-Fried and his once close-knit group of friends and colleagues were accused of defrauding the world out of billions of dollars and investing millions of dollars in political campaigns.
It has been a disaster for the 30-year-old deposed millionaire, from the irrational DM conversation with the reporter to the post-scandal interviews.When his exchange encountered a severe liquidity bottleneck due to a wave of withdrawal requests and a total inability to satisfy the redemption requests, everything fell apart for SBF.
Axie Infinity Scams
Last year, there were several different types of cryptocurrency fraud. But in a high-profile attack carried out in a sophisticated phishing effort including bogus LinkedIn job advertising, the crypto game Axie Infinity’s Ronin bridge bore the most harm.Axie was defeated by the legendary Lazarus organization from North Korea.According to allegations, the con artists used LinkedIn to contact Sky Mavis workers while posing as a fake business. A senior engineer fell for the trap and went through many rounds of the interview process with the “very rich” fictitious salary plan.
The hackers took control of the engineer’s computer when he opened a PDF that seemed to be the official offer.At its height in November of last year, Axie Infinity had 2.7 million daily active users and more than 200 million in weekly trading volume for its in-game NFTs.
A Scammer’s “Puff Piece” On BBC
The BBC nearly produced a “puff article” on a cryptocurrency fraudster because nobody likes a rags-to-riches tale more than they do. A 20-year-old immigrant named Hanad Hassan stated that he “wants to utilize his fortune to benefit others” and that the cryptocurrency initiative he started had donated $270,000 to worthy charities. In 2021, he is said to have founded Orfano X.But BBC didn’t pay attention to him till this year. The broadcaster produced “We Are England: Birmingham’s Self-Made Crypto-Millionaire,” a nearly 30-minute documentary about a cryptocurrency fraudster. Social media performed as it always does.
After starting a fraud project, individuals on Twitter accused the creator of taking their money.BBC then discreetly removed the item and started an internal probe. The planned broadcast in February was likewise canceled hours before it was set to start. The BBC is now being questioned about the extent of the investigation it did into the initiative and the activities of the con artist.
As the bear market took hold last year, several CEOs stepped down. In September, Alex Mashinsky also announced his resignation as CEO of the insolvent cryptocurrency lender Celsius.But he kept making waves with his nefarious actions. Just before the site stopped allowing user withdrawals, a story of Mashinsky and key business officials taking funds surfaced.It turned out that someone like Mashinsky, who only repeats simplistic aphorisms like “banks are not your friends,” ultimately decided to establish a traditional bank in the hopes of reaping profits from cryptocurrency trading and speculation.He had unbridled arrogance, but as they say, if something seems too good to be true, it generally is.
According to reports, Celsius declared Chapter 11 bankruptcy after admitting a $1.2 billion shortfall in its financial sheet. In a new case, Celsius is charged with running a “Ponzi scheme.”There are undoubtedly more scandal-worthy tales out there, and we may have overlooked some in what felt like an unending list.
Let’s at least hope that 2023 will have more stories of pride than of sordid behavior, for what it’s worth.