FTX’s Collapse Not the Worst for Crypto Investors This Year, Research by Chainalysis Finds

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While the bankruptcy of cryptocurrency exchange Sam Bankman-Frieds FTX made headlines late this year, it does not represent the biggest losses for crypto investors in 2022, according to a report by Wednesday from US blockchain analytics firm Chainalysis.

See Related Article: Crypto Market Implosions and Bankruptcies Lead to Massive Job Loss and Opportunity

Fast facts

The report states that the collapse of stablecoin Terra Luna UST in May and the implosion of lending platform Celsius and hedge fund Three Arrows Capital (3AC) a few weeks later resulted in the highest realized losses in the individual crypto investments this year.

TerraUSD, or UST, was an algorithmic stablecoin, a digital asset pegged to the value of the US dollar that crashed in May, losing almost all of its value after previously having a market capitalization of up to US$40 billion. The collapse then triggered the bankruptcy of Celsius and 3AC over the summer.

Based on weekly realized gains and losses data from all personal crypto wallets, Chainalysis estimates that the Terra Luna crash resulted in realized losses of $20.5 billion, while the Celsius and 3AC crash resulted in $20.5 billion in realized losses. wiped out $33 billion.

According to a report on FTX by crypto analytics firm Nansen, major losses at FTX that ultimately contributed to the collapse of the Bankman-Frieds crypto empire likely also occurred in the wake of the Terra Lunas implosion. .

FTX’s bankruptcy resulted in approximately $9 billion in realized losses, Chainalysis said. However, the report notes that this does not include investor assets that have been frozen on the FTX exchange.

The demise of FTX has left about 1 million investors with no certainty that they will get their assets back, according to bankruptcy filings. At least $8 billion in funds are missing, according to charges brought against Bankman-Fried by the Commodities Futures Trading Commission on Tuesday.

See related article: Terra fugitive Do Kwon has a registered address in Serbia: South Korean local media

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