2022 Was Crypto’s Craziest Year Yet, From FTX Fraud Allegations to Kim Kardashian’s Fine

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Even by cryptocurrency standards, this has been a crazy year. It started with British teenagers getting rich making and selling NFTs from their bedrooms and ended with prominent industry figure Sam Bankman-Fried pleading with a judge for a bail because he was too vegan for prison. We tell you what happened, month by month. The mind wonders what might happen next year.

January

Relentless promotion and celebrity endorsements throughout 2021 make non-fungible tokens (NFTs) mainstream. These unique digital objects are used to prove ownership, and while they can be used for anything, they are most commonly associated with digital art. Benjamin Ahmed, a 12-year-old boy from Pinner, northwest London, whose father taught him to code when he was five, is selling (on paper) 750,000 pixelated whales as artwork digital arts.

The British Museum announces that it will auction NFTs of famous works by JMW Turner as part of an ongoing project. Meanwhile, the world’s first NFT museum opens in Seattle.

February

HMRC seizes the NFTs for the first time as part of an investigation into suspected VAT fraud, becoming the first arm of UK law enforcement to confiscate one of the digital tokens. Three people are arrested in connection with the 1.4million fraud case, and the tax authorities say the action is a warning to anyone who thinks they may be using crypto assets to hide money from HMRC.

March

Those brightly colored ATMs you sometimes see claiming to dispense bitcoins? Turns out they might not be totally above the board. That’s according to the Financial Conduct Authority, which is ordering the closure of all 81 machines, saying none of them are operated by a company with a UK license to offer cryptocurrency services.

Meanwhile, NFTs continue to dominate the news, with Ukraine announcing that it will issue NFTs to fund the war effort. This is the country’s latest step towards a very modern method of war funding, following an earlier successful appeal for cryptocurrency donations, which raised 38 million for the beleaguered country.

At the end of the month, the Ukraines Meta History: Museum of War NFT project is launched with the support of its Ministry of Digital Information. It has since raised $973,500 (802,787).

April

Bill Clinton, Tony Blair and Katy Perry arrive in the Bahamas. No, this is not the start of a joke, this is an exclusive crypto conference. Co-hosted by FTX, a crypto company that is the brainchild of wunderkid Sam Bankman-Fried, Crypto Bahamas brings together high-profile guests with the sandal-wearing vanguard of the new technological frontier. Blair comments that he feels a little overdressed onstage with Bankman-Fried, who wears a T-shirt and shorts to greet former world leaders.

Back in the UK, enthusiasm for NFTs had not yet waned, as then-Chancellor Rishi Sunak asked the Royal Mint to create an NFT. The move shows the forward-looking approach we are committed to taking towards crypto assets in the UK, the Treasury said at the time. We always say that the project is moving forward, even if it seems to be delayed.

May

The crypto world is rocked when two related cryptocurrencies Luna and Terra drop in value. Eventually, their deterioration leads to a stock market crash that wipes out nearly $45 billion in value in a single week.

The founder of both tokens, Do Kwon, is facing legal action from South Korean authorities and disgruntled investors. He also has to deal with the fact that, just a month earlier, he named his newborn daughter after his now-failing digital coin. Baby Luna, he had said at the time. My dearest creation bears the name of my greatest invention. Despite the crash, the baby’s name remains the same.

Someone else living with a constant reminder of the Luna crash is Mike Novogratz, founder of asset management firm Galaxy Digital. Having publicly shown her Luna-themed wolf tattoo earlier in the year, it took up most of her upper arm.

The investor is laughing at him in the wake of the cryptocurrency crash, but he seems to be taking it in his stride. My tattoo will be a constant reminder that investing in venture capital requires humility, he tells his followers.

Mike Novogratz shows off his cryptocurrency-inspired Luna tattoo (Photo: Mike Novogratz/Twitter)

June

Terra’s collapse is having a huge contagion effect across the entire crypto ecosystem, wiping billions of dollars off cryptocurrency values ​​and pushing some companies into bankruptcy. Bitcoin dips below $20,000 for the first time since 2020.

Investors are finding various ways to deal with the decimation of their funds. A group is created on the Telegram messaging app specifically to shout about the state of the market. Users can only send voice notes of themselves shouting.

Amid the chaos, a major player begins to buy out struggling companies. This is FTX, the company that organized the posh meeting in the Bahamas. Founder Sam Bankman-Fried says he feels responsible for saving the industry.

July

The British Army’s Twitter and YouTube accounts fall victim to a hacker, who uses the profiles to direct followers to crypto scam websites.

On Twitter, the account’s name and images are changed to make it look like the official NFT The Possessed Collection page, leaving the Army with a drooling, decapitated cartoon character as their profile picture.

Once the accounts are reported to their owners, the Department of Defense says the military takes information security very seriously and an investigation into the event is underway. A MoD spokesperson told me the investigation is still ongoing.

August

Another famous face joins the crypto world in the form of Martin Shkreli, the senior pharma executive who rose to fame for jacking up the price of a pest control drug, then went to jail for securities fraud securities (unrelated). Released in May, it launches a new crypto project during the summer, including its own cryptocurrency, Martin Shkreli Inu.

Shkreli isn’t the only controversial figure to have turned to crypto this year. Socialite hustler Anna Sorokin, aka Anna Delvey, subject of Netflix’s Inventing Anna, launched a collection of NFTs in June. The eccentric ousted WeWork founder Adam Neumann has also gotten in on the action with a crypto carbon credit project.

September

The crypto world is reacting with about as much tact as you might expect to Queens’ death. A project launches an NFT representing her as a skeleton. Several others release commemorative tokens. But for at least one crypto project, the death of monarchs causes a delay. Bowie on the Blockchain, a David Bowie-themed NFT auction, is postponed out of respect for the British people and Queen Elizabeth II.

Bowie fans who aren’t keen on the idea suggest he should be scrapped altogether. But it continues the following month, raising $127,000.

October

Kim Kardashian is being fined by US regulators for illegally touting the EMAX crypto asset, a token created by an anonymous group of developers. The reality TV star, who failed to tell her subscribers that she was paid $250,000 for the promotion, is ordered to pay $1.26 million.

In the meantime, no longer chained to the role of cabinet minister, Matt Hancock has had time to devote to one of his true passions: crypto. The former health secretary gives speeches, writes op-eds and, in October, reassures fellow crypto enthusiasts at an event that the failure of big space companies is a sign of market momentum.

November

Throughout this time, crypto exchange FTX has built a reputation as the legitimate face of cryptocurrency. Its founder Sam Bankman-Fried, known in the community as SBF, had advocated for crypto regulation and tried to bail out struggling companies in the industry.

That all changes in early November when a series of questions about the company’s balance sheet causes FTX to fall rapidly. She filed for bankruptcy on November 11.

John J Ray III, an experienced restructuring expert who has worked on major corporate bankruptcies, including the Enron scandal, is appointed to replace SBF. As more and more details emerge about what was going on at FTX, the company’s new CEO delivers his damning verdict on the debacle: Never in my career have I seen such a complete failure of security controls. business and such a complete absence of trustworthy financial information as has happened. here.

More Cryptocurrency

December

Being compared to Enron might make most people want to hide under a rock for the foreseeable future, but not Bankman-Fried.

The 30-year-old begins a series of media appearances in which he pleads ignorance. He says he doesn’t know what happened to the missing money in FTXs accounts; he doesn’t know what happened to the corporate stake in Twitter; he’s a vaunted tech genius who can’t even code. If there’s one thing space watchers expect, it’s more surprises.

Meanwhile, as of this writing, with bitcoin in the doldrums, Bankman-Fried is set to be released on $250 million bail pending trial on fraud charges related to the exchange’s collapse. 2023 will be a big year for him and all crypto investors.

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