2022 was a decisive year in the crypto industry as some prominent incidents changed the market and people’s perceptions about it. During this year, epic events took place such as Luna (Terra) crash, Ethereum Merge, the FTX collapse, SBF’s extradition and trial, as well as Elon Musk’s Twitter Takeover and poll for the exit.
Luna (Terra) Crypto Crash
In May 2022, the prominent crypto collapse occurred as the Terra ecosystem’s algorithmic stablecoin UST got depegged. On this, an additional $1.5 billion worth was deployed by Do Kwon to stabilize the market situation. But all the efforts remained ineffective to recover the peg as a death spiral started crashing both UST and its sister Luna token by 99%. After that Do Kwon proposed another token named Luna Classic (LUNC). Nonetheless, it is still trading at $1.30 (99% lower than the all-time high of $119.6).
Ethereum Merge
In September 2022, Ethereum’s most awaited upgrade “the Merge” was accomplished. This effectively transformed the network from the mining-based proof-of-work (PoW) to the validating-based proof-of-stake (PoS) consensus mechanism. With this upgrade, the energy consumption of Ethereum fell by 99% in no time. However, the network’s blockchain reportedly got exposed to nearly 69% censorship under OFAC compliance.
FTX Collapse
In early November 2022, the FTX crash took place after some abrupt events. On the 6th, Changpeng Zhao (the CEO of Binance) declared the plans of extracting his FTT (the local crypto token of FTX) holdings and eventually pulled them out. Subsequently, FTX witnessed a liquidity crunch and Zhao inked a non-binding bailout deal with Sam Bankman-Fried (the former CEO of FTX). Nonetheless, Zhao quit the contract, accusing the FTX CEO of mishandling the client funds.
Eventually, on the 11th of November – after halting user withdrawals – FTX filed for Chapter 11 bankruptcy protection. Subsequently, other firms in Bankman-Fried’s crypto empire also submitted for bankruptcy proceedings. The domino effect of the FTX crash goes on, further deepening the crypto winter with more collapses.
Sam Bankman-Fried’s Accusation, Extradition, and Bail
On 12th December 2022, after getting vanished in November due to scam-related allegations, Sam Bankman-Fried (SBF) got arrested in the Bahamas. The US authorities’ request was accepted by the Bahamian authorities to cooperate and extradite SBF to the US. On the next day, while being extradited, SBF was accused of charges related to law violation, money laundering, fraud, and conspiracy in the US District Court for the Southern District of New York.
The possible sentence for the charges was estimated as a 115-year imprisonment. On the 22nd of December, he was released on a bail contract of $250M on certain conditions under a house arrest at his parents’ residence in California. Now, some speculate him to be declared not guilty as he is continuously distancing himself from the frequent withdrawals from FTX since the bankruptcy filing.
Elon Musk’s Twitter Takeover and Poll to Exit
At October’s end, Elon Musk – the CEO of Tesla, SpaceX, and now Twitter – took over Twitter for $44B. He formerly announced revoking the deal while citing that the former management of Twitter did not disclose the exact information about bots on the platform. But, as the social media platform’s former management filed a lawsuit against Musk for not complying with the contract, the deal got settled.
However, the controversies against the new CEO and the decreased performance of Tesla led him to announce a poll to leave Twitter just fifty days after his arrival as the chief on 18th December. On the next day, the poll concluded that 57.5% of voters wanted him to step down. Seeing such unfavourable results, he declared that only the users of Twitter blue will be permitted to vote onward. Then he assured the consumers to quit the company if he finds someone more stupid than himself.
Should I step down as head of Twitter? I will abide by the results of this poll.
— Elon Musk (@elonmusk) December 18, 2022
