Ranging from seemingly smug but supposedly visionary CEOs to superstar traders who never seem to sleep, the cryptocurrency world, like any other high-flying industry, is full of capable people.
But when millions or billions of real money are at stake, a star can fall as quickly as it soars.
The following are the five major fall events that will shake the currency circle in 2022.
Sam Bankman-Fried (SBF)
The former FTX CEO, once known as the “white knight” in the currency circle, is now under house arrest at his parents’ home in Palo Alto, California, after he was extradited from the Bahamas and paid a sky-high $250 million bail to be released .
After a stint at Wall Street trading firm Jane Street, Sam Bankman-Fried (SBF) and other co-founders co-founded cryptocurrency trading firm Alameda Research. SBF then founded the cryptocurrency exchange FTX, which later became one of the largest cryptocurrency exchanges in the world.
SBF is one of the best-known advocates of “effective altruism,” the idea of maximizing the good of as many people as possible, but he seems less benevolent than he appears. In December, SBF was indicted on eight counts, including securities fraud, wire fraud, and several conspiracy counts involving money laundering and campaign finance violations.
Talkative CEOs are not uncommon in the tech world. But most of them are not responsible for the $40 billion crash.
Kwon Dao-hyung, the South Korean founder of Terraform Labs, is now wanted by Interpol and South Korean authorities. Quan created the algorithmic stablecoin TerraUSD, which some have hailed as an important tool to sustain the growth of the crypto industry.
TerraUSD maintains a 1:1 peg to the U.S. dollar through a delicate balance with Luna, another cryptocurrency issued by Terraform Labs. Luna’s market capitalization briefly climbed to $40 billion before a market event that essentially amounted to a bank run sent both cryptocurrencies crashing.
Kwon was so confident, or so self-deluded, that he brushed aside any criticism of TerraUSD and Luna, saying, “I don’t argue with the poor.” Though still sporadically active on the Internet—his most recent appearance was at V Cobie’s live podcast UpOnly — but his real-life whereabouts are unknown. South Korean news agency Yonhap reported on Dec. 12 that he may be in Serbia.
Su Zhu and Kyle Davis
Three Arrows Capital founders Zhu Su and Kyle Davis were prodigy investors in the cryptocurrency space—until they fell from the altar.
The pair created one of the once most successful crypto hedge funds on the market by making a series of speculative investments with borrowed money. But after betting wrongly on the Grayscale Bitcoin Trust and investing an additional $200 million in Luna coins, their company went bust.
While the crypto hedge fund claims to have no “outside investors,” its financial implosion has led to billions of dollars in claims from creditors.
The pair, once the epitome of “new money” in the cryptocurrency industry, tried to prove it by spending $50 million on a superyacht named Much Wow, but failed to pay the last The yacht had to be put up for sale again.
While former Celsius CEO Alex Mashinski was at the helm of the cryptocurrency bank, ads promised savings account customers as much as 18% annualized returns. It seemed too good to be true. And it is true.
Celsius, which filed for bankruptcy in July, was one of the first major cryptocurrency firms to freeze customer withdrawals. According to Reuters, Mashinsky, who is in charge of the company’s investment strategy, made a string of bad choices, including over-leveraging and putting about $125 million into the Grayscale Bitcoin Trust, which has fallen nearly 100% this year. 80%.
Last year, the firm said it had 1 million clients and managed about $20 billion in assets. In bankruptcy filings, the company claimed it owed customers more than $4.7 billion.
It’s uncertain whether those customers will get back their investments, which for some have been their life savings. Months after the company filed for bankruptcy, Mashinski resigned as CEO, saying he had become “increasingly distracting.”
Stephen Ehrlich’s Voyager Digital, in its heyday, posted double-digit ad revenues, fueled by celebrities like Mark Cuban.
Ehrlich and company ran into trouble earlier this year when crypto hedge fund Three Arrows Capital failed to pay more than $665 million owed to the company.
Voyager Digital, which had 3.5 million subscribers at its peak, filed for bankruptcy in July.
The company came close to selling its assets to FTX for about $1.4 billion, but the latter also went bankrupt last month, and Voyager began looking for a new buyer. From what it looks like so far, it looks like Binance’s U.S. arm will buy Voyager’s assets for roughly $1 billion.
After Voyager went bankrupt, though, Erlich may end up better than most of his clients. According to reports, he made millions of dollars by selling shares at the peak of Voyager’s stock price in February and March 2021. (Fortune Chinese website)
Translated by Agatha
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 on the line, a shining star can burn out as quickly as it emerged.
Here are five prominent falls from grace that shook the crypto world in 2022.
Once hailed as the “white knight” of crypto, the former FTX CEO is now on house arrest at his parents house in Palo Alto, California after being released on a whopping $250 million bond following his extradition from The Bahamas.
After some time at the Wall Street trading firm Jane Street, Sam Bankman-Fried and his cofounders created the crypto trading firm Alameda Research. SBF then founded FTX, a cryptocurrency exchange that rose to become one of the world’s largest.
But SBF, known as one of the biggest advocates of effective alcoholism, which promotes doing the most good for the most people, perhaps was not as benevolent as he seemed. In December, Bankman-Fried was charged with eight counts including securities fraud, wire fraud, and several counts of conspiracy that involve money laundering and campaign finance violations.
Brash, trash-talking CEOs aren’t uncommon in tech. But most of them also aren’t responsible for $40 billion meltdowns.
The South Korean founder of Terraform Labs, Do Kwon, is now wanted by Interpol and South Korean authorities. Kwon created the algorithmic stablecoin TerraUSD, which was hailed by some as an essential tool for the growth of the crypto industry.
The stablecoin kept its 1-to-1 peg with the US dollar through a delicate balancing act with another Terraform Labs token, Luna. The value of Luna rose to $40 billion before what was effectively a bank run collapsed both cryptocurrencies.
Kwon was so confident—or so deluded—that he shook off any criticism of TerraUSD and Luna, saying, “I don’t debate the poor.” Although sometimes still active online—he recently appeared on crypto influencer Cobie’s livestreamed podcast UpOnly—his real-life whereabouts are unknown. South Korean news outlet Yonhap reported on Dec. 12 that he may be in Serbia.
Su Zhu and Kyle Davies
The founders of Three Arrows Capital, 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 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 later collapsed, the firm went belly up .
Although the crypto hedge fund claimed to have no “external investors,” its financial implosion led to billions of dollars in claims from creditors.
The crypto bigwigs were once the epitome of a wave of new money coming 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 put up for sale again after Zhu and Davies failed to make their final payment.
The former CEO of Celsius, Alex Mashinsky helmed the cryptocurrency bank while it advertised annual yields of up to 18% for customers who opened savings accounts. It appeared too good to be true. And it was.
Celsius filed for bankruptcy in July after becoming one of the first major crypto companies to freeze customer withdrawals. Mashinsky was reportedly in charge of the company’s investment strategy and made a series of bad bets, according to Reuters, including over-the-top leveraging putting about $125 million in the Grayscale Bitcoin Trust, which is down nearly 80% this year.
Last year, the company boasted 1 million customers and about $20 billion in assets under management. In bankruptcy filings, the company claimed that it owed customers more than $4.7 billion.
It’s unclear if Celsius customers will get back the money they invested, which for some was all of their savings. Months after the company filed for bankruptcy, Mashinsky stepped down as CEO, claiming he had “become an increasing distraction.”
At its peak, Stephen Ehrlich’s Voyager Digital advertised double-digit yields with the help of celebrity advocates like Mark Cuban.
Ehrlich and the company ran into trouble earlier this year as crypto hedge fund Three Arrows Capital failed to pay the more than $665 million it owed the company.
After building up a mass of 3.5 million customers at its peak, Voyager Digital filed for bankruptcy in July.
The company almost sold its assets to FTX for about $1.4 billion, but after the the latter imploded last month, Voyager went searching for a new buyer. It appears now that the US arm of Binance will be buying Voyager’s assets for about $1 billion.
Still, Ehrlich might end up better off than most of Voyager’s customers post bankruptcy. He reportedly made millions selling Voyager shares during their peak in February and March 2021.
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