- A string of bankruptcies followed the Terra-Luna catastrophe, commencing with Three Arrows Capital (3AC), Voyager Digital, and Celsius.
- The market capitalization of cryptocurrencies decreased by over $2 trillion in 2021.
Background
Early in 2022, the Russia-Ukraine war drew the cryptocurrency community together and demonstrated its solidarity as people around the globe used cryptocurrency to donate and offer relief to Ukraine. Then, as prices plummeted and the bear market deepened, Terra-demise.
Luna shocked the neighborhood. Three Arrows Capital (3AC), Voyager Digital, and Celsius were the first to declare bankruptcy amid the aftershocks of the Terra-Luna debacle.
Leaving bankruptcy aside, many cryptocurrency firms, particularly lenders, experienced liquidity issues in the wake of the 3AC collapse. Sam Bankman-Fried (SBF), the CEO of FTX at the time, became known as a “hero in shining armor” by providing capital to businesses with liquidity problems.
As the second-largest donor to US President Joe Biden’s presidential campaign, SBF continued to network among Washington’s elite political circles while advocating for crypto regulation. After FTX filed for bankruptcy on November 11 of that year, SBF was apprehended in the Bahamas and extradited to the US on December 21 because of information about the mishandling of customer cash.
Prices of all major cryptocurrencies have remained far below their all-time highs in 2021 despite the cryptocurrency market’s wild ride. Over the year, the market value of cryptocurrencies lost over $2 trillion. Familiar crypto investors lost tens of billions of dollars in 2022 as supposedly stable businesses like Celsius and FTX collapsed suddenly.
Forbes’ Report
Forbes estimates that since March 2022, 17 of the wealthiest creators, investors, and supporters of cryptocurrencies have lost $116 billion in personal fortune. While ten crypto billionaires lost their billionaire titles and 3 lost their whole fortune, 15 crypto moguls lost more than half of their wealth.
Changpeng Zhao
The richest crypto celebrity and CEO of Binance, Changpeng Zhao (CZ), experienced a dramatic fall in personal wealth during the past nine months. CZ’s net worth decreased 93.17% from $65 billion in March to $4.5 billion in December.
Samuel Bankman-Fried
SBF, who had a net worth of $24 billion and was the second-richest crypto tycoon in March, is thought to have lost all his wealth. In anticipation of his numerous counts of fraud trial, SBF is currently under house arrest.
Brian Armstrong
The CEO of Coinbase, Brian Armstrong, suffered a 75% reduction in his net worth from $6 billion in March to $1.5 billion in December. After FTX’s demise, Armstrong bragged that, in contrast to Binance, it was striving to take the “tough path” of a “controlled, trustworthy approach.” But most of Armstrong’s fortune has been lost due to the 64% decline in Coinbase shares since August and the 95% decline since its $100 billion IPO.
Gary Wang
Gary Wang, the co-founder and former CTO of FTX, saw his whole net worth of $5.9 billion destroyed since March, like SBF. According to a December 21 press release from the Southern District of New York, Wang and Caroline Ellison, the former CEO of Alameda Research, have admitted guilt to criminal charges. The prosecution of SBF is receiving assistance from Wang and Ellison.
Chris Larsen
Chris Larsen, a co-founder of Ripple and the fifth-richest crypto celebrity, had a 51% decline in his wealth. In December, Larsen’s net worth had fallen to $1.2 billion from $4.3 billion in March.
Barry Silbert
Genesis’ parent company, the crypto conglomerate Digital Currency Group (DCG), is led by Barry Silbert. According to estimates from Forbes, Silbert’s net worth has decreased to zero from its March value of $3.2 billion. According to Forbes’ assessment, the cost of Silbert’s 40% ownership interest in DCG is zero. It should be noted, however, that Forbes could not determine Silbert’s investments for the estimate.
