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Crypto collapse: FTX’s fall is one piece of a long, cold, contagious crypto winter

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:

  • Emma Roth

    Sep 29, 2023

    Emma Roth

    The co-founder of a collapsed crypto hedge fund was arrested in Singapore

    Illustration of a digital coin on fire.
    Illustration by Alex Castro / The Verge

    Su Zhu, the co-founder of the collapsed crypto hedge fund Three Arrows Capital (3AC), was arrested in Singapore on Friday. Zhu was taken into custody while attempting to leave the country from Singapore’s Changi Airport, as reported earlier by Bloomberg.

    Teneo, the liquidation firm in charge of liquidating 3AC’s assets, says it received a committal order against Zhu after he failed to comply with a court order that compelled him to cooperate with the liquidation process. That committal order directs Singaporean police to arrest Zhu and hold him in prison for four months. Teneo says it obtained a “similar” committal order for 3AC’s other co-founder, Kyle Davies.

    Read Article >
  • Elizabeth Lopatto

    Sep 28, 2023

    Elizabeth Lopatto

    The FTX trial is bigger than Sam Bankman-Fried

    Sam Bankman-Fried is shown against a background of red
    What evidence is he sitting on?
    Image: The Verge

    The trial of Sam Bankman-Fried is likely to be more consequential than just whether the man himself is found guilty. Depending on what evidence is introduced during the trial, it could be rough for the entire crypto industry.

    “How much damage can this trial do to the already beaten-down reputation of the industry at this point?” asks Yesha Yadav, a law professor at Vanderbilt University. “This trial is going to be an excruciating moment for the industry because no one knows what kind of evidence might come out.”

    Read Article >
  • Elizabeth Lopatto

    Sep 19, 2023

    Elizabeth Lopatto

    The best stuff Sam Bankman-Fried’s parents bought using FTX money

    Sam Bankman-Fried
    An object lesson in filial piety!
    Illustration: The Verge; Image: Getty Images

    The lawyers who represent what’s left of FTX filed suit against Sam Bankman-Fried’s parents, saying they “exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars.” The point of the suit is to get that money back so it can be paid out to the people FTX owes.

    Before all this, Barbara Fried and Joseph Bankman were already well-known and respected Stanford Law School professors. Last week, Bloomberg dropped a fascinating profile of the two of them.

    Read Article >
  • Elizabeth Lopatto

    Sep 14, 2023

    Elizabeth Lopatto

    That’s good, right?

    The head of legal and the chief risk officer at Binance.US are leaving, The Wall Street Journal reports. The CEO of Binance.US quit earlier this week.

    Just remembering the time that FTX’s legal and compliance team quit, no reason.


  • Elizabeth Lopatto

    Sep 14, 2023

    Elizabeth Lopatto

    Were you curious about Sam Bankman-Fried’s parents?

    How involved were SBF’s powerful parents?

    Legal filings suggest Bankman and Fried were crucial to their son’s transfiguration from schlubby startup nerd to hyperconnected crypto mogul. The couple profited tremendously from FTX, netting $26 million in cash and real estate in 2022 alone. They were regular fixtures at the company’s offices, offered words of encouragement to employees and were included in internal company communications. Their reputations and connections were essential to FTX’s success.


  • Elizabeth Lopatto

    Sep 13, 2023

    Elizabeth Lopatto

    Bankrupt FTX can sell and invest its holdings to pay back investors.

    FTX has said its holdings are worth $3.4 billion.

    FTX revealed earlier this week that it holds $1.16 billion of solana (SOL) – approximately 16% of the token’s outstanding supply – and about $560 million in bitcoin (BTC). The rest of its holdings consist of lesser known illiquid tokens.

    Good luck out there, folks!


  • Richard Lawler

    Sep 12, 2023

    Richard Lawler

    OneCoin co-founder sentenced to 20 years for his multibillion-dollar “Bitcoin killer” fraud.

    Sebastian Greenwood was the co-founder of a fraudulent cryptocurrency that pulled in $4 billion from investors between 2014 and 2016. Now U.S. District Judge Edgardo Ramos has sentenced him to 20 years in prison, and he was ordered to pay $300 million in forfeiture.

    Through the MLM structure, OneCoin members received commissions for recruiting others to purchase cryptocurrency packages. As the top MLM distributor of OneCoin, GREENWOOD earned 5% of monthly OneCoin sales from anywhere in the world, which totaled more than $200 million from the fourth quarter of 2014 through the fourth quarter of 2016 alone and exceeded approximately $300 million in total. 

    Meanwhile, his partner, Ruja Ignatova, aka the “Cryptoqueen” we wrote about last year when she was added to the FBI’s Top Ten Most Wanted List, remains at large, with a $100,000 reward for information leading to her arrest.


  • Richard Lawler

    Sep 12, 2023

    Richard Lawler

    Quick crypto notes.

    The price of Bitcoin dropped below $25,000, as people believe the FTX bankruptcy may sell off significant holdings of “altcoins” from the failed exchange. (CoinDesk)

    Ethereum founder Vitalik Buterin’s Twitter / X account was hacked and sent out a malicious link that stole $691k in crypto.

    And someone paid a $500,000 fee to send $1,865 worth of Bitcoin. (Web3 is Going just Great)


  • Elizabeth Lopatto

    Aug 23, 2023

    Elizabeth Lopatto

    Tornado Cash devs charged with laundering more than $1 billion

    An image of a hand holding a mouse against a multicolored background.
    Photo by Amelia Holowaty Krales / The Verge

    Tornado Cash developers Roman Semenov and Roman Storm have been charged with three conspiracy counts in an indictment unsealed today. Storm has been arrested and Semenov remains at large, according to a statement from the Southern District of New York.

    Tornado Cash is a so-called “mixer,” a privacy service meant to obscure the trail of ownership for cryptocurrency that passes through it. The mixer “knowingly violated” US sanctions and “laundered more than $1 billion in criminal proceeds,” according to a statement from US Attorney Damian Williams. “While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes.”

    Read Article >
  • Richard Lawler

    Aug 11, 2023

    Richard Lawler

    Sam Bankman-Fried sent to jail as judge revokes bail over witness tampering, VPN use

    Former FTX CEO Sam Bankman-Fried Attends Hearing To Determine Bail Revocation
    Photo by Michael M. Santiago/Getty Images

    FTX co-founder Sam Bankman-Fried (SBF) has been on house arrest in California since December while awaiting trial on fraud and money laundering charges over the crypto exchange’s collapse, but today he was sent to jail, as first reported by Inner City Press.

    Judge Lewis A. Kaplan ordered the former billionaire remanded after prosecutors pushed to have his bail revoked, citing violations that included Bankman-Fried’s admitted usage of VPN software that he said was to watch an NFL game and the judge’s view that he had attempted to tamper with witnesses “at least twice.”

    Read Article >
  • Emma Roth

    Aug 10, 2023

    Emma Roth

    The crypto exchange Bittrex has reached a settlement with the SEC.

    The bankrupt exchange agreed to pay a fine of $24 million to settle the SEC’s charges that it operated as an unregistered national securities exchange, broker, and clearing agency.

    The SEC also alleged that Bittrex attempted to get rid of “problematic” public statements that suggested the exchange sold securities:

    For years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts — all in an effort to evade the federal securities laws. They failed.


  • Richard Lawler

    Aug 9, 2023

    Richard Lawler

    Another former FTX executive is reportedly close to cutting a plea deal.

    Bloomberg reports Ryan Salame, who donated $24 million to Republican campaigns, is negotiating a guilty plea on charges of violating campaign finance laws.

    Coincidentally, prosecutors recently confirmed (PDF) they’re still charging FTX co-founder Sam Bankman-Fried for an illegal campaign finance scheme (as well as other alleged fraud and money laundering). He is due back in court on Friday (PDF) after a New York Times article published details from the diary of Caroline Ellison, who has already pleaded guilty and is cooperating in the case against him.


  • Aug 7, 2023

    Emma Roth and Wes Davis

    PayPal launches PYUSD stablecoin backed by the US dollar

    The PayPal USD stablecoin logo: a Blue circle with a white letter P inside, with the top and bottom lines of the inner hole punched in the P extending out behind the letter instead of enclosing.
    Image: PayPal

    PayPal is launching its own stablecoin: PayPalUSD (PYUSD). The company says the cryptocurrency token is “fully backed by U.S. dollar deposits” and can be bought or sold on PayPal’s app or website at $1.00 per PYUSD.

    With PYUSD, you can make person-to-person payments, fund purchases with the currency at checkouts, and transfer PYUSD between PayPal and other outside wallets. PayPal says that you can also convert the currencies supported by PayPal to and from PYUSD as well.

    Read Article >
  • Emma Roth

    Aug 4, 2023

    Emma Roth

    Coinbase argues it doesn’t trade securities, so the SEC’s lawsuit should be dismissed

    Illustration of the Coinbase wordmark on a teal, blue, and black background with circular patterns.
    Illustration by Alex Castro / The Verge

    Coinbase is asking a judge to dismiss the Securities and Exchange Commission’s lawsuit against it. In a motion filed on Friday, Coinbase maintains that it doesn’t trade securities, rendering the SEC’s arguments invalid.

    The SEC sued Coinbase in June, alleging that the crypto exchange broke securities laws by operating as an unregistered broker, exchange, and clearing agency. It also accused the company of selling unregistered securities through its staking-as-a-service program, which rewards users with crypto by participating in the proof-of-stake process on the blockchain.

    Read Article >
  • Emma Roth

    Aug 1, 2023

    Emma Roth

    A bankrupt crypto firm tried to return funds — but customer data might’ve been stolen instead

    Gold coins on a red background.
    Illustration by Alex Castro / The Verge

    The bankrupt crypto firm Voyager Digital suffered a potential data breach when it started letting customers recover their funds last month, as first reported by Bloomberg. In a court document filed on July 28th, Voyager’s lawyers say they’re investigating reports that scammers targeted customers using potentially stolen personal information.

    Voyager Digital reopened its platform for 30 days in June, allowing customers to withdraw the funds that had been trapped in the brokerage following its collapse last year. While customers withdrew over $491 million from the platform, their data may have been compromised during the process.

    Read Article >
  • Emma Roth

    Jul 31, 2023

    Emma Roth

    SEC sues crypto influencer for allegedly buying sports cars and a rare black diamond with investor funds

    A screenshot of Richard Heart in a YouTube video
    Image: Richard Heart via YouTube

    Crypto influencer Richard Heart is facing a lawsuit from the Securities and Exchange Commission over claims he used “at least” $12 million in proceeds from his crypto products to buy luxury products. That includes the purchase of sports cars, luxury watches, and a 555-carat black diamond called The Enigma — supposedly the largest in the world.

    Heart was born in the US and currently lives in Finland. He has operated a YouTube channel since 2017, where he promotes his own crypto products, including the Hex token and its sister product PulseChain, which operates on the PulseX protocol.

    Read Article >
  • Richard Lawler

    Jul 31, 2023

    Richard Lawler

    Coinbase CEO: The SEC told us "we believe every asset other than bitcoin is a security."

    That's the statement from Brian Armstrong to the Financial Times, about the company's choices that led to a lawsuit from the US Securities and Exchange Commission.

    We really didn’t have a choice at that point, delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the US.

    Armstrong claims the regulators asked Coinbase to delist basically all the over 200 tokens it trades, before the lawsuit was filed that points at 13 of them.


  • Wes Davis

    Jul 23, 2023

    Wes Davis

    Mismanaging billions in customer funds at their crypto exchange wasn’t FTX execs’ only bad idea.

    A lawsuit filed Thursday by FTX against its former leaders showed Sam Bankman-Fried’s younger brother messaging someone at the FTX Foundation charity about buying the Pacific island nation of Nauru, as reported by Bloomberg.

    [it would be used] for “some event where 50%-99.99% of people die [to] ensure that most EAs [effective altruists] survive” and to develop “sensible regulation around human genetic enhancement, and build a lab there.” The memo further noted that “probably there are other things it’s useful to do with a sovereign country, too.”

    This would be news to the nation’s roughly 12,000 existing inhabitants. Also, at 213 feet elevation, it’s vulnerable to rising seas, and damage from phosphate mining has rendered most of its land uninhabitable.


  • Richard Lawler

    Jul 22, 2023

    Richard Lawler

    Cringe rapper and alleged Bitcoin launderer Razzlekhan is reportedly close to copping a plea.

    Remember the “Crocodile of Wall Street,” aka Razzlekhan, aka Heather Morgan? She and her husband were arrested in 2022 on charges of trying to launder billions of dollars worth of Bitcoin stolen in the 2016 hack of Bitfinex. She’s also a rapper, among many other things.

    Now Reuters reports she and her husband have reached a plea deal with prosecutors and are set to have a hearing on August 3rd.


  • Elizabeth Lopatto

    Jul 17, 2023

    Elizabeth Lopatto

    Things are going so well at Binance that the company is cutting employee benefits.

    Does this inspire confidence?

    The company told employees that it would stop offering certain benefits, effective June 19, including mobile-phone reimbursement, fitness reimbursement and work-from-home expenses, among other items, according to former employees and a message from Binance’s internal messenger viewed by The Wall Street Journal. 


  • Emma Roth

    Jul 13, 2023

    Emma Roth

    Former Celsius CEO arrested on fraud charges as FTC lines up a $4.7 billion fine

    A coin is set aflame to reveal a digital wireframe underneath.
    Illustration by Alex Castro / The Verge

    The former CEO of the fallen Celsius crypto lending company, Alex Mashinsky, and the company’s chief revenue officer, Roni Cohen-Pavon, have been arrested on charges of committing securities fraud, according to Bloomberg. On Thursday, the Justice Department unsealed charges against Mashinsky and Cohen-Pavon for inflating the price of Celsius’ crypto token, called CEL, while lying to Celsius customers about the token, their activities, and the company’s overall health.

    The DOJ claims Mashinsky and Cohen-Pavon “illicitly manipulated the price of CEL,” causing investors to buy the token at inflated prices. The DOJ claims that selling their tokens, even as Mashinsky told Celsius customers he wasn’t selling, pulled in $42 million for Mashinsky and $3.6 million for Cohen-Pavon.

    Read Article >
  • Jay Peters

    Jul 12, 2023

    Jay Peters

    Google is spelling out rules for blockchain-based apps on Android

    An illustration of the Google logo.
    Illustration: The Verge

    Google is introducing a new blockchain-based content policy for Android apps on the Google Play Store. The new policy, which will be effective on December 7th, covers things like cryptocurrency exchanges and software wallets, transparency requirements, and rules for NFT gamification that would cover things like loot boxes.

    According to the new policy for tokenized digital assets secured on a blockchain:

    Read Article >
  • Emma Roth

    Jul 6, 2023

    Emma Roth

    Taylor Swift might’ve signed that sponsorship deal with FTX after all.

    According to a report from The New York Times, Taylor Swift’s team signed a deal with FTX that could’ve paid up to $100 million following months of deliberation, contrary to a previous report that she didn’t.

    The thing is, the deal didn’t actually go through. Sources tell the NYT that FTX founder Sam Bankman-Fried canceled the deal last minute, leaving Swift’s team feeling frustrated. Talk about dodging a bullet.


  • Wes Davis

    Jun 28, 2023

    Wes Davis

    FTX is suing its former compliance officer, Daniel Friedberg.

    The suit alleges Friedberg enabled Sam Bankman-Fried and others to misappropriate billions in customer funds leading up to the catastrophic collapse of the company late last year, according to Bloomberg. The fall of FTX was just one part of the ongoing crypto winter.

    The suit lays out the allegations:

    Friedberg and others facilitated the routing of billions of dollars in purported profits of the FTX Group to the FTX Insiders, and their families, friends, and other acquaintances through purported personal ‘loans,’ bonuses, ‘investments,’ and all other means of transfer, including real estate purchases and hundreds of millions of dollars in charitable and political contributions.


  • Richard Lawler

    Jun 26, 2023

    Richard Lawler

    Sad day for the Ape fam.

    According to our survey results, as much as people are sure AI technology is going to have a significant impact on society, most of them don’t feel that way about non-fungible tokens.