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Top 5 Bankruptcy Of The Crypto market In 2022

The hyped domain for 2022 and much talked about the crypto market, there seemed to be no shortage of high-profile bankruptcies and scandals that roiled the crypto sphere. Among all, we shall be highlighting the top 5 implosions of the crypto and give a snapshot as to whether the crypto market would be able to recover or not. They are-

  • TerraUSD/Luna

  • Celsius Network

  • Voyager Digital

  • FTX

  • BlockFi

TerraUSD/Luna  

Luna crash burst the bubble and made the first fall of the crypto market for 2022.TerraUSD was a famous “algorithmic stablecoin” that was pegged to the U.S. dollar and acted as an arbitrage mechanism to protect the peg. This meant, Luna will be absorbing any volatility that TerraUSD would experience. Earlier the happy-to-go coin suddenly started experiencing a downfall in May 2022. As a result, TerraUSD de-pegged itself from the American currency followed by mass withdrawals from Anchor, a yield-paying lending and borrowing procedure. Soon after, we could not believe our eyes to see the token plunging as low as 10 cents on the dollar while Luna incurred an eventual 99% loss in its total value.

 

Celsius Network  

Established in 2017, Celsius rode the cryptocurrency downfall in 2021 to become one of the most prominent crypto lenders. Its competitive yields attracted many investors and low-interest rates on crypto-backed loans. It all started in June 2022 when the company began suffering liquidity issues by eventually halting all withdrawals and the customer assets were frozen by June 13. A month later, it filed for its bankruptcy, having just $167 million in cash compared with $4.7 billion owed to its creditors.

Voyager Digital  

The publicly traded Voyager Digital toppled on July 1 when the platform suddenly halted customers trading. Investors fears materialized on July 5, and filing for Chapter 11 bankruptcy was made. Shares experienced a mountain fall from 31 cents per share to 10 cents in Sept 2022 and are being traded at just $0.035 per share as of 13th  Dec 2022, which once had a 52-week high of $15.87. As per the news, Binance the most renowned exchange is re-launching Voyager Digital with its turnkey solutions to trade crypto assets.

FTX  

Founded by Sam Bankman-Fried in 2018 FTX, one of the prominent crypto brokerage platforms globally, is being called the “Lehman Brothers of Crypto” due to its recent crash.

Read: Most Trending Crypto Wallet Of 2023 – Phantom

In its earlier days of the 2022 crypto bear scenario, FTX emerged as a “lender of last resort” in the crypto domain, engaging in talks with and extending credit to belay troubled companies like Celsius, Voyager, and BlockFi alike. It was no less than a shock for everyone when FTX paused its withdrawals from Nov. 9 and filed for Chapter 11 bankruptcy. So, what could be the reason for the catastrophe?