From the catastrophically failed launch of meme coins to the painful shift in El Salvador’s stance, 2024 has been a year filled with more than just green candles and price spikes.
Bitcoin is soaring in the air and there is a lot of chaos around it.
Although 2024 has been a fantastic year for cryptocurrencies, and we’ve already talked about how great it is in one of our articles, when it comes to the crypto market, scandals and scams are inevitable during its bullish cycles. So, let’s take you on a quick tour of the worst things that happened to digital assets this year.
El Salvador Bitcoin Reserve Chart
El Salvador Bitcoin Reserves
1. El Salvador Backtracks on Adopting Bitcoin as Legal Tender
The dramatic rise in the price of Bitcoin (BTC) has confirmed the correctness of President Nayib Bukele’s decision, which caused an international stir when he announced that El Salvador would adopt Bitcoin as legal tender. Despite the country buying and collecting Bitcoins one per day—and raking in more than $300 million in unrealized profits in the process—the most obvious fact is that the country’s economy is in dire straits. With its economy lagging behind other Central American countries and extreme poverty widespread, with some citizens living on less than $200 a month, Bukele’s Bitcoin revenues have barely been able to cover the country’s needs.
One of the most significant events of 2024 ended with the Financial Times (FT) revealing that El Salvador would reverse its position on adopting Bitcoin as legal tender in exchange for much-needed loans from the International Monetary Fund, a major setback for Bitcoin investors who once dreamed of the small nation becoming a model for countries considering abandoning cash and moving to digital currencies.
However, the situation may have gotten worse, especially since few consumers in El Salvador use Bitcoin as a means of payment; many businesses have not welcomed it, and Bukele’s other pro-crypto policies have remained in place so far.
2. FTX Platform Compensation Failure
The recovery that the sector has seen since the collapse of FTX has seemed miraculous; after billions of dollars in customer funds were stolen and their accounts were unable to be accessed, the bankruptcy team has been able to recover huge sums, with prosecutors bringing the platform’s executives to justice.
However, the repayment plan, which is set to begin in the new year, has left many creditors with a lump in their throats; while they will ultimately receive 119% of their account balances, which is more than what they lost, it seems unrealistic in a bankruptcy of this magnitude. On the other hand, these payments will be made in US dollars, based on the value of Bitcoin in November 2022, meaning they will not benefit from the bull market in any way.
It got worse when some victims ended up selling their property on the private market for cents on the dollar, missing out on any chance of reimbursement (at least in dollar terms).
A chart of a financial asset's price with several colored lines, numbers, and price levels.
German government's Bitcoin reserves - Image source: Arkham Intelligence
3. Intensive government sales
Earlier this year, Bitcoin markets experienced violent volatility after Germany auctioned off a massive amount of BTC seized from scammers, resulting in heavy selling pressure. The auction house auctioned off around 50,000 BTC seized from the pirate site Movie2k.to, netting the German government around $2.8 billion in return.
That equates to an average price of $53,000 per coin, and she could have more than doubled her money had she held onto her coins for a few months, prompting former finance minister Christian Lindner to warn lawmakers that Europe’s economic powerhouse was missing out on the opportunities that Bitcoin could offer.
There were also concerns that the US would follow Germany’s lead and auction off its Bitcoin holdings, which it has accumulated over more than 10 years. These concerns have now been allayed by Donald Trump’s return to the White House, after he pledged to create a strategic reserve of 200,000 Bitcoins confiscated from scammers.
4. Destructive hack
Crypto investors in India were left in a state of panic after local exchange WazirX was hacked and $230 million stolen in July, with a Bangladeshi man arrested in connection with the operation after analytics firm Elliptic initially linked the incident to a group of North Korean scammers.
Despite the severe blow to the crypto sector in the country and the shaken confidence in it as a result of this hack, the parent company of the WazirX platform announced that it will compensate the affected customers, but like the compensation of the FTX platform, it will be in the countries
5. Hawk Tuah Coin Project Disaster
Haliey Welch became the talk of the town after uttering her sexy phrase “Hawk Tuah” during an after-party in Tennessee, and amid the meme coin surge of 2024, it seemed certain that she would launch her own coin project amidst expectations that it would ultimately fail miserably.
Despite the market cap of Hawk Tuah (HAWK) rising to $490 million after its launch, it collapsed by 91% within hours. In an attempt to mitigate the collapse, Welch and her team held a podcast on Spaces on the X platform, which was taken down after an angry intervention from the famous YouTube detective known as Coffeezilla. The broadcast was abruptly stopped when Welch said she was going to sleep on December 4, and a period of media silence followed that lasted for weeks.
Craig Wright's Endless Claims
Craig Wright claimed for years that he was Satoshi Nakamoto, suing anyone who dared to question his claim until a London judge ruled that Wright was not the person who invented Bitcoin. A group called the Cryptocurrency Open Patent Alliance (COPA) also claimed that the Australian entrepreneur’s actions had hindered Bitcoin’s growth. “Based on his false claim to be Satoshi, he has sought to obtain hundreds of billions of dollars in damages, including claims against individuals,” COPA’s lawyer Jonathan Hough said during the five-week trial.
In July, a brief statement was posted on Wright’s website saying that the court had ruled that his “claims were false.” That didn’t stop there: Wright later sued COPA for a whopping £911 billion ($1.14 trillion) in damages, which resulted in him being held in contempt of court in London and ordered to attend the contempt hearing. Wright refused to attend—he is believed to have been in Asia—despite offers to cover his travel costs.
7. The man who lost his bitcoins in a landfill is still struggling.
Imagine you mined 8,000 BTC in 2013, when it was worth less than $100, and then threw the hard drive in a landfill. That’s exactly what happened to James Howells, who never gave up his fight to get permission to search a landfill in Wales.
After repeated refusals from local authorities in Newport (despite offering to share the money if the disc was found and worked properly), Howells decided to file a lawsuit, with his representatives arguing in court that they had a “meticulous plan” to track down the disc, with the help of extraction experts.
However, the legal team representing Newport Council has argued that even if Howells had obtained permission to search, the hard drive no longer belonged to him. As such, these issues are likely to be in the headlines over the next year and beyond.