It was a bad year for crypto. It was even worse for these guys

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From the brash but supposedly visionary CEO to the superstar trader who never seems to sleep, crypto, like other high-flying industries, is filled with hotshots.

But when millions or billions of dollars are at stake, a bright star can be extinguished as quickly as it appeared.

Here are five major falls from grace that rocked the crypto world in 2022.

SBF

Once hailed as the white knight of crypto, the former FTX CEO is now under house arrest at his parents’ home in Palo Alto, Calif., after being released on $250 million bail following his Bahamian extradition.

After some time at Wall Street trading firm Jane Street, Sam Bankman-Fried and his co-founders created crypto trading firm Alameda Research. SBF then founded FTX, a cryptocurrency exchange that has become one of the largest in the world.

But SBF, known as one of the greatest advocates of effective altruism, which promotes doing the most good for the most people, may not have been as benevolent as it seems. In December, Bankman-Fried was charged with eight counts, including securities fraud, wire fraud and several counts of conspiracy involving money laundering and campaign finance violations.

Do Kwon

Do Kwon, co-founder and managing director of Terraform Labs, at the company’s offices in Seoul, South Korea, Thursday, April 14, 2022. Kwon relies on the oldest cryptocurrency as a backstop for his stablecoin, which some critics liken it to a ginormous Ponzi scheme. Photographer: Woohae Cho/Bloomberg via Getty Images

Hot-headed, talkative CEOs are not uncommon in tech. But most of them aren’t responsible for $40 billion meltdowns either.

The South Korean founder of Terraform Labs, Do Kwon, is now wanted by Interpol and the South Korean authorities. Kwon created the algorithmic stablecoin TerraUSD, which has been hailed by some as an essential tool for the growth of the crypto industry.

The stablecoin has retained its 1-to-1 peg with the US dollar thanks to a delicate balance with another Terraform Labs token, Luna. Luna’s value rose to $40 billion before what was effectively a bank run caused the two cryptocurrencies to crash.

Kwon was so confident or deluded that he brushed off all criticism of TerraUSD and Luna, saying: I don’t argue about the poor. Although still active online at times, he recently appeared on Cobies’ live podcast, crypto influencer UpOnly, and his actual whereabouts are unknown. South Korean media Yonhap reported on December 12 that he may be in Serbia.

The story continues

Su Zhu and Kyle Davies

Three Arrows Capital founders Su Zhu and Kyle Davies were the whiz kid investors of the crypto world until they weren’t.

Through a series of speculative investments made with borrowed money, the pair has created one of the most successful crypto hedge funds. But after a misplaced bet on Grayscale Bitcoin Trust and a $200 million investment in Luna, which then collapsed, the company went bankrupt.

Although the crypto hedge fund claimed to have no outside investors, its financial implosion resulted in billions of dollars in claims from creditors.

Crypto bigwigs were once the epitome of a flurry of fresh money from the crypto industry, and they sought to prove it with the purchase of a $50 million superyacht called Much Wow. , which had to be relisted after Zhu and Davies. have not made their final payment.

Alex Mashinsky

Alex Mashinsky, Founder and CEO of Celsius, addresses the audience on the final day of Web Summit 2021 in Lisbon. (Photo by Bruno de Carvalho / SOPA Images/Sipa USA)Not used Germany.

Former Celsius CEO Alex Mashinsky led the cryptocurrency bank as it announced annual returns of up to 18% for customers who opened savings accounts. It sounded too good to be true. And it was.

Celsius filed for bankruptcy in July after becoming one of the first major crypto firms to freeze customer withdrawals. Mashinsky was allegedly in charge of the firm’s investment strategy and made a series of bad bets, according to Reuters, including excessive leverage and investing around $125 million in the Grayscale Bitcoin Trust. , which has fallen nearly 80% this year.

Last year, the company had 1 million customers and about $20 billion in assets under management. In bankruptcy filings, the company claimed it owed more than $4.7 billion to customers.

It is unclear whether Celsius customers will get back the money they invested, which for some was all their savings. Months after the company filed for bankruptcy, Mashinsky resigned as CEO, saying he had become a growing distraction.

Stephen Ehrlich

Stephen Ehrlich, CEO and co-founder of Voyager Digital Ltd., speaks during the Piper Sandler Global Exchange and FinTech conference in New York, U.S., June 8, 2022. REUTERS/Brendan McDermid

In its heyday, Stephen Ehrlichs Voyager Digital reported double-digit returns with the help of celebrities like Mark Cuban.

Ehrlich and company ran into trouble earlier this year when crypto hedge fund Three Arrows Capital failed to pay the more than $665 million it owed the company.

After amassing a mass of 3.5 million customers at its peak, Voyager Digital filed for bankruptcy in July.

The company nearly sold its assets to FTX for around $1.4 billion, but after the latter implosed last month, Voyager went in search of a new buyer. It now appears that the US arm of Binance will buy assets from Voyagers for around $1 billion.

Still, Ehrlich might end up better off than most Voyagers customers after the bankruptcy. He reportedly made millions selling Voyager shares during their peak in February and March 2021.

This story was originally featured on Fortune.com

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