On January 1st of 2022, one Bitcoin would cost you about $46,000. By November 8th, that same coin went for about $18,500. And that’s when the year’s most dramatic crypto story was just starting: the collapse of the FTX exchange, which brought yet another round of existential threats to the crypto industry as a whole.
Now the traditional financial system is showing signs of fragility, and two major crypto banks (Silvergate and Signature) are among the three US banks that shut down within the space of one week.
2022 looked like death by a thousand scandals for crypto. There was the Luna / Terra crash, which wiped out billions in value practically overnight. There was Axie Infinity, the once-hot NFT game that lost $625 million in a hack. Celsius collapsed. Three Arrows Capital collapsed.
Tron backer Justin Sun is now facing charges filed by the SEC over celebrity crypto endorsements, sales of unregistered securities, and alleged market manipulation, while Terra founder Do Kwon is believed to have been arrested in Montenegro.
Remember when NFTs were cool and people thought their JPGs were worth millions?
All this happened, of course, as the overall economy began to crash back down to earth after a pandemic-created spike in stock prices — which also dampened society’s overall tolerance for chaotic, nonsensical gambling on internet money. As the economy began to even out and our collective risk tolerance went down, crypto went for many investors from a fun plaything to a dangerous bet.
Here’s all our coverage of crypto’s ups and downs through 2022 and 2023:
Mar 6
Y’all aren’t going to believe this, but Coachella is doing NFTs again.In 2022, Coachella sold thousands of NFTs, including 10 digital “lifetime passes.” But it partnered with FTX US, Sam Bankman-Fried’s fall took the tokens with it, and owners were left chasing their promised benefits. Now Bitcoin is back, and Coachella’s trying NFTs again.
Each $1,499 NFT in the initial collection comes with a 2024 VIP Festival Pass and access to an exclusive bar.
Of 1,024 NFTs offered, three have been minted so far.
Jan 13
GameStop is pulling out of the NFT game.GameStop will shut down the NFT marketplace on February 2nd “due to the continuing regulatory uncertainty of the crypto space,” reported by Decrypt yesterday.
That’s the same reason the company offered for shutting down its crypto wallet last year. The marketplace opened just a year and a half ago. The SEC was keenly interested in crypto throughout 2023, and took its first unregistered security enforcement against an NFT project in August.
Jan 10
First Bitcoin ETFs approved by US regulators
Fifteen years after the genesis block was mined (and after one false announcement), the US Securities and Exchange Commission approved Bitcoin exchange-traded funds. Bitcoin has fully joined the financial system it was built to challenge. The decision will make 11 spot Bitcoin ETFs available to investors, such as those from Grayscale, Fidelity, BlackRock, and more.
Read Article >“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse Bitcoin,” said SEC chairman Gary Gensler, in a statement. “Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”
Dec 30, 2023
Sam Bankman-Fried won’t face a second trial.The Wall Street Journal writes that federal prosecutors won’t pursue the five leftover charges that District Court Judge Lewis Kaplan previously split off to avoid delaying the trial that resulted in a guilty verdict for Bankman-Fried last month.
The prosecutors justified the decision in a letter to Kaplan yesterday:
... Much of the evidence that would be offered in a second trial was already offered in the first trial and can be considered by the Court at the defendant’s March 2024 sentencing. Given ... the strong public interest in a prompt resolution of this matter, the Government intends to proceed to sentencing on the counts for which the defendant was convicted at trial.
Dec 29, 2023
US judge rules there’s ‘no genuine dispute’ UST and other Terra Labs crypto assets are securities.Terraform Labs founder Do Kwon is still in Montenegro waiting to be extradited, but the SEC’s case against him will proceed, with a January 29th scheduled start date.
The TerraUSD (UST) stablecoin, its linked Luna crypto token, and the whole Anchor Protocol crashed in May 2022, wiping out about $40 billion. According to the judge, while UST on its own is not a security, when combined with the Anchor Protocol, it is, while Luna joined investors in a “common, profit-seeking enterprise.”
OPINION AND ORDER - SEC v. Terraform Labs[DocumentCloud]
Dec 28, 2023
In crypto, you have to take the good with the bad.CoinDesk points out Binance’s year-end wrapup, noting that despite the guilty plea and $4 billion in fines for engaging in “Anti-Money Laundering, Unlicensed Money Transmitting, and Sanctions Violations,” its new CEO says the user base has grown by 30 percent to 170 million.
Meanwhile, former CEO Chaopeng Zheng’s wealth reportedly grew by $25 billion this year, but he remains stuck in the US awaiting sentencing. Yesterday, his lawyers filed a sealed request for permission to travel.
Dec 15, 2023
The Solana Saga crypto phone’s surprising sellout and other Web3 updates:Crypto wallet company Ledger’s Connect Kit software was compromised to insert a wallet drainer. Ledger’s CEO blamed a phishing attack on an ex-employee without explaining how their account still had access.
Even though the Solana Saga crypto phone flopped, selling only 2,500 units, it suddenly sold out in the US on Thursday. The Block reports each phone comes with 30 million “bonk” tokens. Their price has spiked to $0.000028 each, which adds up to more than the phone’s $599 price — assuming you can get the phone and sell them in time.
And Web3 is Going Just Great points out that a blockchain-linked online chess platform, The Immortal Game, has dropped NFT and play-to-earn features after finding out “that by offering large amounts of cash with no limit barrier to entry, we encouraged heavy cheating on the platform and degraded the user experience for our legitimate player base.”
Nov 29, 2023
Feds seize crypto mixer tied to the North Korean hackers who robbed Axie Infinity.CoinDesk and TechCrunch report U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) action against Sinbad.io, calling it a money laundering tool used by the “Lazarus” state-sponsored hackers used to move a “significant” portion of the $620 million in crypto stolen from Axie Infinity last year.
This follows sanctions against other mixing services like Blender.io and Tornado Cash.
Lazarus Group has operated for more than ten years and is believed to have stolen over $2 billion worth of digital assets... the DPRK has resorted to using illicit tactics, such as heists perpetrated by the Lazarus Group, to generate revenue for its unlawful weapons of mass destruction and ballistic missile programs.
Nov 27, 2023
Binance’s CEO will have to stay in the US, for now.Last week, Changpeng Zhao agreed to step down as CEO of the massive cryptocurrency exchange Binance — part of a plea deal with the DOJ for breaking anti-money-laundering laws.
However, one remaining disagreement has been where he will spend his time while awaiting sentencing for the felony charges. Despite agreeing to a $175 million bond, prosecutors consider him a flight risk and wanted to keep him in the US. That question isn’t fully answered, but Reuters reports a judge ruled CZ is staying the US for now while the court considers it, instead of being allowed to return to the UAE.
Nov 27, 2023
Coinbase CEO figures it’s time to stop looking for crypto criminals now that Binance has pleaded guilty.What if we really have already found every criminal who runs a cryptocurrency exchange?
Now that Binance reached a $4 billion settlement with the DOJ and ditched its CEO Changpeng Zhao, Coinbase head Brian Armstrong said to CNBC in an interview, “The enforcement action against Binance, that’s allowing us to kind of turn the page on that and hopefully close that chapter of history.”
Coinbase is also being sued by the SEC for allegedly selling unregistered securities, by the way.
Nov 24, 2023
A Montenegro judge agrees to extradite collapsed crypto founder Do Kwon.But now the question is: to where? Kwon faces charges in both the US and South Korea in connection with the collapse of the Terra stablecoin and its sister token Luna.
Kwon was arrested in Montenegro in June and spent four months in prison for attempting to use a fake passport. Federal prosecutors in the US filed additional charges against Kwon following his arrest, accusing him of wire fraud, commodities fraud, securities fraud, and more.
A Montenegrin Justice Minister must now decide whether to extradite Kwon to the US or South Korea.
Nov 20, 2023
The SEC is suing Kraken.Another one of the world’s largest cryptocurrency exchanges joins Coinbase and Binance in facing charges of operating as an unregistered securities exchange, as well as accusations (PDF) of commingling customers' crypto assets and cash with its own and even allegedly paying expenses directly from bank accounts that held customer cash.
Kraken agreed to pay a $30 million fine in a settlement when it ended its crypto staking program in the US earlier this year; we’ll see if this case ends up costing it more.
Nov 3, 2023
‘OpenSea 2.0’ starts with mass layoffs as the NFT balloon deflates.CEO Devin Finzer says OpenSea is “shifting to a smaller team with a direct connection to users.” Decrypt reports about 50 percent of employees are impacted. When it laid off 20 percent of its employees last year, around 230 people remained.
This chart shows OpenSea activity peaked with over 50,000 active wallets (around the time it was valued at $13 billion) and $140 million in daily volume, which has dropped to fewer than 8,000 active wallets and $2.3 million in volume.
Nov 2, 2023
Sam Bankman-Fried found guilty of fraud
Former cryptocurrency kingpin Sam Bankman-Fried has been found guilty of fraud. A New York jury delivered the verdict on November 2nd, concluding a trial that has seen Bankman-Fried defend himself against claims that he criminally mismanaged his crypto exchange FTX and trading firm Alameda Research.
Read Article >After more than a month in trial, the jury took four and a half hours to decide Bankman-Fried’s fate, declaring him guilty on all seven charges, including wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. He is set to be sentenced by Judge Lewis Kaplan on March 28th of next year and faces decades in prison.
Nov 1, 2023
“...getting caught in a lie by a judge is very bad.”That’s what experienced litigator Mitchell Epner wrote about this incident during the cross-examination of Sam Bankman-Fried. Elizabeth Lopatto’s summary of SBF’s final day of testimony captures it as part of being “vivisected” on the stand.
It was not until Judge Lewis Kaplan intervened to ask if Bankman-Fried had ever been told by Yedidia about that money, in words or in substance, that Bankman-Fried admitted he’d been told.
Trying to worm his way past tough questions by answering a slightly different question doesn’t seem to work as well for SBF in court as it did with investors and interviewers.
Oct 31, 2023
The defense rests.Sam Bankman-Fried’s lawyers are done calling witnesses in the big FTX fraud case over the cryptocurrency exchange’s collapse last year. The lawyers are likely preparing to make their closing arguments, and Elizabeth Lopatto will have more reports from the courtroom later today, following last night’s story on all the things SBF conveniently doesn’t remember.
Oct 25, 2023
Sam Bankman-Fried will testify in his fraud trial
Sam Bankman-Fried will testify at his criminal fraud trial on Thursday as he faces charges of fraud, conspiracy, and money laundering related to his failed cryptocurrency exchange FTX.
Read Article >During a conference call on Wednesday, attorney Mark Cohen confirmed Bankman-Fried will take the stand. The move isn’t much of a surprise, considering the time Bankman-Fried spent speaking on his own behalf between the collapse of FTX last year and his eventual arrest last December.
Oct 18, 2023
CNBC digs into the Silk Road thief who was caught ten years later with $3 billion in stolen crypto.A year ago, the DOJ announced it recovered more than 50k Bitcoin stolen from the Silk Road market in 2012 and that James Zhong had pleaded guilty to the crime.
CNBC’s 30-minute report uncovers how they found him (he moved $800 in Bitcoin to an account registered under his real name) and shows body camera footage of cops investigating his house while pretending to pursue a thief who’d broken in and stole some crypto. That person’s identity is still unknown.
Oct 17, 2023
Reddit’s blockchain-based Community Points are going away
Reddit is sunsetting its blockchain-based Community Points product, the company announced on Tuesday. A Reddit admin (employee) shared the announcement about Community Points, which uses the Ethereum blockchain, on a few subreddits, including r/CryptoCurrency (which had its own “moons” crypto token), r/FortniteBR (which had its own “bricks” token), and r/EthTrader (which had its own “donuts” token).
Read Article >The value of those tokens has, predictably, fallen off of a cliff, as CoinDesk reports drops of between 60 and 90 percent. Some Reddit posters claim thousands of dollars in value disappeared from their wallets immediately, while others are pointing at transactions made just prior to Tuesday’s announcement that they think are suspicious.
Oct 11, 2023
Things did, indeed, get worse.That is a theme of Caroline Ellison’s remarks about Sam Bankman-Fried and FTX during his trial on charges of wire fraud and conspiracy.
As Liz Lopatto captured from Tuesday’s testimony:
“[SBF] was very ambitious,” she said. Besides telling her about his presidential chances, he also told her that if there was a coin flip where tails destroyed the world and heads made the world twice as good, he’d flip the coin. He called this being “risk-neutral,” which seems like a fancy way of saying he was a gambling addict.
Ellison is back on the stand today, and I can’t wait for the next big update.
Oct 11, 2023
Sam Bankman-Fried wanted to buy Snapchat.That’s one of the things mentioned during the ongoing testimony of former Alameda Research CEO Caroline Ellison against her terrible ex-boyfriend, as well as the idea SBF sought to have regulators “crack down on Binance,” the competing crypto exchange that sparked the run that took FTX down.
You can expect more updates from Wednesday’s events in the Sam Bankman-Fried / FTX fraud trial to come later today.
Oct 10, 2023
The Sam Bankman-Fried fraud trial continues.The Verge reporter Liz Lopatto is back in a New York City courtroom today, as Sam Bankman-Fried’s friends turned cooperating witnesses continue to take the stand in the case against the fallen FTX boss.
We broke down FTX CTO Gary Wang's testimony / code review on Friday, and today the case restarted with him still on the stand, and former Alameda CEO and SBF ex Caroline Ellison is expected to make her appearance later today. Stay tuned here for all of the latest updates from the crypto exchange fraud trial.
Oct 9, 2023
FTX liquidation could further hurt crypto startups.Before they collapsed, FTX and Alameda Research “massed a roster of portfolio companies that included major names in the industry, such as stablecoin providers Circle and Paxos, blockchain developer Aptos Labs and crypto bank Anchorage Digital,” Bloomberg writes.
But venture funding for the crypto world has plunged; selling those stakes could further depress startup valuations.
Oct 6, 2023
Former FTX CTO Gary Wang is on the stand.The government’s prosecution of Sam Bankman-Fried continues where it left off Thursday, with another former college roommate and alleged co-conspirator testifying against the former FTX CEO about exactly how all that customer money ended up being used for SBF’s other interests.
You can read up on all of the details about the missing billions right here, ahead of another trial update later today from The Verge’s Liz Lopatto, who is in the courtroom right now.
Oct 6, 2023
Was Sam Bankman-Fried’s bean bag chair a lie too?
The difficult part of a fraud case is usually establishing a defendant knowingly lied — unless, apparently, the defendant is Sam Bankman-Fried.
Read Article >Today the government has made a brisk case for one count in the indictment and is close to making a case for a second one, as two of Bankman-Fried’s college roommates testified against him. We also heard about Bankman-Fried’s love life and bean bag chair.