Top Crypto Stories 2022

2022 was hectic for the crypto industry and the world in general. There were good and bad events but they all impacted the industry in the long term, and some of them defined further market development.

What are those stories that have changed the crypto world forever or at least are worth mentioning?

We have collected the most impressive of them.

2022 Brought Some Positive Developments

Even though 2022 was, probably, one of the most complex years in the history of crypto, there were major positive developments.

Crypto Seized from Lazarus Group for the First Time in the History

Over 30 mln stolen in the Ronin bridge hack by hackers from the North Korean Lazarus group were retrieved, Chainalysis claims. It is the first time that advanced technologies were used to track stolen funds and collaborate with law enforcement bodies and crypto services providers to freeze the stolen funds and recover them eventually.

Ukraine Legalized Crypto amidst Russia-Ukraine War

When Russia invaded Ukraine, the Ukrainian government’s official Twitter account posted a request for donations in Bitcoin and Ethereum, with two wallet addresses included. Even though Vitalik Buterin warned users that the account may be hacked, the officials quickly confirmed that the request was legitimate and made in an effort to fund the war relief efforts.

Within three days, the Ukrainian government managed to raise over $30 mln in crypto, and somebody even sent a CryptoPunk NFT.

Such a request was made for the first time in history, and its effect demonstrated the borderless power of crypto.

Ethereum Shifted from Proof-of-Work to Proof-of-Stake

Ethereum’s long-awaited shift to the proof-of-stake protocol has been long awaited but was delayed for one or another reason multiple times. On September 15th, the shift referred to as the Merge was finalized, and one of the biggest blockchains stopped mining activities.

As a result, Ethereum soared by 100% from its June bottom, reduced emissions by 99%, and it is hoped that it will help to speed up the market recovery.

For now, the Merge is considered a major crypto event since the time when Bitcoin was launched. With this shift, Ethereum eliminated all doubts about projects referred to as Ethereum killers due to the fact that they run on PoS. Now, the major cryptocurrency will most likely head the next crypto race.

2022 Was a Turbulent Year

2022 was not only a productive year but also a difficult one. Many events happened that sent the entire market to the bottom. Many specialists claim though that the majority of these events helped the market to get rid of unfair players and enter the new bull run with the strongest players only. So, what about a short summary of stories that shocked the crypto world?

Terra Collapse

One of the world’s biggest cryptocurrencies based on market capitalization collapsed within some hours. The project was successful mostly thanks to its stablecoin UST. UST was an algorithmic stablecoin which means it was not collateralized by any other asset.

At its peak, the entire ecosystem was worth over $40 bln and UST seemed to be unbeatable.

But UST depegged from USDT on May 7 but it recovered rapidly. The next depeg happened two days later and that time, the coin has never recovered.

Terra’s collapse caused a market meltdown but this was not the major damage. The collapse of one of the biggest ecosystems caused a huge impact on other projects that in one or another way were involved with Terra:

• Celsius froze withdrawals and filed for bankruptcy
• Three Arrow Capital became insolvent
• Genesis Trading went down

Many other companies had to suspend their activities. But even at that moment, nobody could imagine how far the waves would reach.

FTX Collapse

The empire of Sam Bankman-Fried managed to endure amidst the major liquidity crisis caused by Terra for some months more. In autumn 2022, the market showed signs of recovery after the disaster, and users started regaining their confidence in crypto.

But the major catastrophe was yet to come.

FTX was a major player in the market, the exchange was clearly targeting the U.S. clients, money spent on creating a specific image of the exchange were immense, and it was one of few platforms supported by the U.S. government. When other major players started struggling, FTX was offering emergency credits.

That’s why its collapse was not expected. This is the main reason why its crash was even more shocking than the Terra collapse.

In early November 2022, the rumors about the illiquidity of FTX’s sister Alameda started spreading. Sam insisted that those rumors were spread by “competitors” in an effort to damage the exchange.

But those rumors were later confirmed by auditors and it caused a bank run from FTX. Major FTX holders started moving their funds from the platform, and users followed them immediately.

In the end, it was revealed that FTX lent funds to Alameda Research, and Alameda lost over $10 bln in poorly-managed positions. $10 bln of users’ funds were just gone.

As more details started coming to light, it was revealed that FTX was not the company it was believed to be.

FTX filed for bankruptcy and Sam resigned from the company’s CEO position. John J. Ray who has made his career by overseeing the dissolution of failing companies testified in court the following.

At the moment, Sam and other top management of both FTX and Alameda are facing over 100 years in prison. The company started repaying debts to its users but it looks like it will take years to return all the funds to people who have lost them in FTX.

Tornado Cash Case

Tornado Cash was one of the biggest cryptocurrency mixers. It helped users to hide the cons’ origins by mixing coins and sending them randomly to wallets.

On August 8, the U.S. Treasury’s Office of Foreign Assets Control announced that it had placed Tornado Cash on its sanctions list.

The protocol was claimed to be used for money laundering by crypto criminals among which was also the Lazarus group, a government-sponsored group of cyber criminals from North Korea.

Some protocols immediately blocked wallets that were involved in operations with Tornado Cash, others were waiting until the last moment in disbelief, and some tried to fight back. But the sanctions against Tornado Cash outraged the crypto industry. It was the first intrusion of such a kind of regulators in the crypto business and for now, it is unclear how far it can go.

Bottom Line

Even though 2022 was difficult in all regards, the industry shows some signs of recovery. We hope that 2023 will become the year of achievements rather than failures.

Stay tuned for further updates, crypto guides, and market insights from LetsExchange. You can also follow us on Twitter, Facebook, Reddit, Instagram, LinkedIn, Medium, Quora, Telegram, Steemit, and Bitcointalk for first-hand information from our team.