Top crypto news headlines of 2022

On New Year’s Day, the market capitalization of crypto assets totaled $2.4 trillion. At press time, it has declined 64% to $845 billion.

Plenty of events dragged everything down this year. Here are the top crypto headlines of 2022.

Jack Dorsey activated Bitcoin Lightning Network payments in CashApp

In 2022, Jack Dorsey continued his support of Bitcoin and its most popular scaling solution, the Lightning Network, by adding support for Lightning Network payments to his popular peer-to-peer payments app, CashApp.

Simply due to the enormity of CashApp, this instantly became one of the most important adoption events in Bitcoin’s history. CashApp serves 50 million monthly active users.

To help promote the launch, CashApp promised free Lightning Network transactions. Professional basketball player Klay Thompson offered to give away $1 million in bitcoin over CashApp.

Read more: You can now send Bitcoin for free on Cash App, thanks to Lightning

TerraUSD (UST) de-pegged from the US dollar and crashed to $0

Investors lost $60 billion in mark-to-market capitalization when the algorithmic stablecoin terraUSD de-pegged from the US dollar and its ecosystem’s total value locked (TVL) plummeted in value in May.

At first, founder Do Kwon seemed optimistic that Terraform Labs and the Luna Foundation could stabilize the situation. That got backed up by a massive amount of buy orders using reserve funds, which initially seemed to catch UST as it was falling. The Luna Foundation also should have had more than $1 billion on hand to buy back tokens and boost the price.

However, investors were not so confident. Relentless selling triggered a chain of events that caused the entire terra ecosystem to implode. Its meltdown triggered a domino effect that rippled throughout the digital asset industry.

Read more: South Koreans are particularly angry at Do Kwon and Terra

Former SEC Director William Hinman made millions from a pro-Ethereum firm

Through a Freedom of Information Act (FOIA) request, Empower Oversight received emails that revealed that former SEC Director William Hinman might have had a conflict of interest outside of the SEC. Hinman famously said that then-current offers and sales of Ethereum were not securities transactions.

Behind the scenes, Hinman was making millions in personal profit from a pro-Ethereum entity. Email records revealed an exchange between Hinman and the SEC’s ethics office in which the it expressed concern about Hinman’s financial stake in a pro-Ethereum firm called Simpson Thacher & Bartlett. This law firm is listed as a member of the generously endowed Ethereum Foundation.

The SEC fought against releasing the emails, possibly because it would hurt its case against Ripple. The SEC alleges that Ripple and its co-founders raised $1.3 billion in an unregistered securities sale. Hinman’s opinion that Ethereum was not a security has been used by Ripple to argue that neither is its token.

The SEC did not establish whether Hinman had ever divested as he said he would. Hinman went back to work for Simpson Thacher after leaving the SEC.

Read more: Former SEC director Hinman made millions from a pro-Ethereum firm during tenure

The Bitcoin Mining Council published the industry’s first energy usage disclosure

In the first quarter of 2022, the Bitcoin Mining Council published the results of the largest survey in Bitcoin mining history. Industrial-level mining operators claimed to be sourcing 64.6% of their power from ecologically sustainable sources. Council respondents represented approximately half of Bitcoin’s hashrate at the time.

The report was a response to environmental concerns about proof-of-work (PoW) consensus. Politicians and environmental activists have often criticized Bitcoin’s energy usage. A recent White House report indicated that Bitcoin mining uses between 0.4% and 0.9% of the world’s energy.

Read more: Elon Musk missed the cut, won’t hold sway on Bitcoin Mining Council

Three Arrows Capital filed for bankruptcy

The hedge fund by Kyle Davies and Su Zhu, Three Arrows Capital (3AC), filed for Chapter 15 bankruptcy in early July, becoming one of the first big bankruptcies this year. Top creditors included Voyager Digital, Celsius Network, and Genesis Trading. Filings revealed that it owed creditors approximately $3.5 billion.

Its bankruptcy was initially blamed on Terra’s collapse. Its founders have remained relatively silent. Creditors and liquidators accused them of going into hiding after filing for bankruptcy.

Read more: Three Arrows Capital liquidated by multiple lenders after ghosting

Celsius filed for bankruptcy

In July, Celsius Network became one of the casualties of Terra’s collapse due to its large exposure to the Terra-based lending app Anchor Protocol. Celsius had managed to yank $500 million in assets out of Anchor Protocol before it collapsed.

In its bankruptcy filings, Celsius revealed $4.3 billion in assets and $5.5 billion in liabilities, mostly money owed to investors. A judge presiding over the bankruptcy case recently ordered the return of $50 million in funds owned by users of Celsius’s custody services.

Read more: Celsius manipulated CEL token to bolster balance sheet, filing says

Voyager Digital filed for bankruptcy

Crypto lender Voyager Digital filed for bankruptcy protection in July. At the time, its CEO Stephen Ehrlich promised that depositors on its platform would get their money back, one way or another. However, the digital asset community lost faith.

At the time that Voyager filed bankruptcy, it had 3.5 million customers. In a bankruptcy hearing, one customer said she had more than $1 million deposited with Voyager Digital. 

Voyager Digital has enumerated a staggering 100,000 creditors. Receivables included a $665 million loan to Three Arrows Capital (3AC) ⏤ which 3AC soon defaulted on.

Read more: Voyager Digital duped customers with FDIC insurance

BlockFi signed a doomed term sheet with FTX US, then filed for bankruptcy

On June 21, BlockFi announced a deal with FTX US. The exchange agreed to provide BlockFi with a $250 million revolving line of credit. FTX US also had an option to acquire BlockFi. The acquisition price would have been dependent on BlockFi hitting rigidly defined milestones.

In the end, FTX filed for bankruptcy protection, and so did BlockFi.

Read more: BlockFi blames FTX for bankruptcy

WNS sued GoDaddy over its sale of the Eth.link domain

The company behind Ethereum Name Service (ENS) sued GoDaddy over an allegedly improper sale of the Eth.link domain to Manifold Finance. ENS claims the domain’s registration should not have expired until July 2023.

ENS is responsible for the “.eth” domains occasionally seen on Twitter accounts. Vitalik Buterin and the individual behind the “Bored Elon” Twitter account have .eth domains. ENS provides a way to send ETH to addresses without having to copy-and-paste a string of letters and numbers.

Read more: What is ENS and why does it have beef with web giant GoDaddy?

Ethereum changed its consensus method to proof-of-stake, completing The Merge

On September 15, Ethereum activated a long-anticipated update of its consensus mechanism from labor-based PoW to wealth-based proof-of-stake (PoS). This update switched Ethereum to a purely PoS algorithm for validating new transactions. It claims the update reduced its energy usage by 99.95%.

The Merge integrated Beacon Chain, which initially ran parallel to Ethereum’s mainnet. Beacon Chain included the consensus logic and block logic protocol that the mainnet now uses.

Read more: SEC chair says PoS crypto may be securities hours after Ethereum Merge

Sam Bankman-Fried hilariously claimed that FTX has $1 billion for acquisitions

As part of Sam Bankman-Fried’s attempt to position himself as the JP Morgan of crypto or somebody who could bail out troubled crypto companies (he never was), he announced a $1 billion fund for acquisitions and bailouts in September.

Read more: Here’s why Sam Bankman-Fried is not the JP Morgan of crypto

FTX filed for bankruptcy

FTX filed for bankruptcy on November 11. Bankman-Fried stepped down as its CEO. Court documents revealed that it had $1.24 billion in cash and owed $3.1 billion to its top 50 creditors when it filed for bankruptcy. John J. Ray III, a restructuring expert best known for overseeing the Enron bankruptcy, took over as CEO.

A list of its biggest 50 creditors had most of their identifying information redacted. FTX customers complained of having their assets frozen on the platform. Firms like Genesis Trading and BlockFi paused withdrawals in the wake of FTX’s bankruptcy and freezing of withdrawals.

Read more: New FTX chief describes the firm’s collapse in bankruptcy testimony

Genesis Trading halted withdrawals

In the wake of FTX’s bankruptcy, Genesis Trading paused withdrawals. A Q3 2022 report indicates that it was owed $2.8 billion in active loans. It denied having made any loans to FTX or having any large exposure to FTX’s native FTT token, but did admit trading on it. It said it had $175 million locked on the FTX platform.

Read more: Genesis still consistently inconsistent amid bankruptcy claims

BlockFi filed for bankruptcy

With FTX’s bankruptcy, its deal with BlockFi evaporated. This forced BlockFi to file for Chapter 11 bankruptcy. The filing lists more than 100,000 creditors. In a press release issued by BlockFi, it said it had $256.9 million in cash on hand, which it said would be enough to pay the bills while it went through restructuring.

Read more: BlockFi files for bankruptcy and sues Sam Bankman-Fried on same day

Gemini Earn attempted to extract money from Genesis Trading

When Genesis Trading froze withdrawals, one of its big partners, Gemini Earn, was forced to do the same thing. Genesis Trading had been Gemini Earn’s lending partner.

Gemini announced that it was attempting to recover the $900 million that Genesis Trading owed. It formed a creditors’ group that will coordinate efforts to get the money owed by Genesis Trading back.

Read more: Chelsea FC owner first in line for $350M payout if Genesis goes under

Do Kwon became a fugitive after Terra LUNA collapses to $0

After Terra’s collapse, South Korea issued an arrest warrant for Do Kwon, revoked his passport, and asked Interpol for assistance. He had been in Singapore at the time. He fled to Dubai. Authorities now say he could be somewhere in Serbia. He recently taunted police, inviting them to have a meeting.

Read more: Elusive Do Kwon denies $60 million bitcoin cashout claims

The SEC and Justice Department filed charges against FTX

The SEC and Justice Department cited allegations that FTX mishandled user funds and violated securities regulations. According to the Wall Street Journal, the SEC’s investigation into alleged misconduct by FTX US may have predated FTX’s bankruptcy. However, it expanded its investigation in the wake of the bankruptcy.

Read more: SBF arrested in Bahamas, criminally indicted in New York, charged by SEC

NFT and metaverse trading volumes collapsed 99% after 2021 hype

The trading volume of NFTs and Metaverse properties cratered in 2022 after peaking in late 2021. The Sandbox’s LAND trading volume dropped by 99% from January to September. Metaverse properties’ native tokens dropped in value by an average of 75%.

Major NFT collections are similarly plummeting from all-time highs. NFTs that previously sold for millions of dollars in ETH may be worth only a few thousand dollars now. Even the enthusiasm for ENS domains has waned, though GoDaddy’s allegedly improper sale of the eth.link domain likely didn’t help.

Read more: These six-figure NFTs are down 99%

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Source: https://protos.com/top-crypto-news-headlines-of-2022/