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List of crypto bankruptcies – The crypto companies that went bankrupt [so far]

We had to make a list to follow along with the thread. Full list inside.
| Cryptopress
Last updated: January 20, 2023

CryptoPress

These are all the bankruptcies so far in the crypto world. We had to make a list to follow along with the thread.

The crypto winter with inflation and the crash of Terra brought the least desired effects in the crypto world: a domino of companies exposed to unpayable debts, liquidations, and bankruptcies.

It started with Celsius, followed by 3AC and then others followed.

Some of the reasons that produced this are already known:

  • The market fell after the adjustment of rates due to high inflation, which produced stress in the crypto market.
  • New regulations that hinder the operation of companies.
  • The collapse of Terra and its currency $UST evaporated billions of value in a week.
  • The fall of many companies that operated with cryptos, such as 3AC and Celsius. –
  • The decline in the prices of cryptocurrencies as a whole (especially Bitcoin).

All this generated the exposure of some companies to toxic assets and leveraged debt, which began to be unable to cover their debts. First to drop was Celsius, then 3 Arrows Capital, and the list goes on.

How far can this go?

We do not know, but we can give you the list of all the crypto falls of this year for these reasons.

Here is the list: 

Company Name Business Date of Pause 
Celsius Network Ltd. trading, lending 12-Jun-22
Babel Finance lending 17-Jun-22
CoinFlex futures, exchange 23-Jun-22
Voyager Digital trading, lending 1-Jul-22
Vauld trading, lending 4-Jul-22
Zipmex exchange 20-Jul-22
Hodlnaut exchange 8-Aug-22
FTX exchange 11-Nov-22
BlockFi trading, lending 28-Nov-22
Genesis lending 19-Jan-23

Total deficits and recovered amounts

Name – Date Bankruptcy Type Total Deficit Amount Recovery Is the platform still operating?

Genesis, January 2023

Chapter 11 $3.6 billion Underway Yes

Core Scientific, December 2022

Chapter 11 $1.3 billion Underway Yes

BlockFi, November 2022

 

Chapter 11 $1.3 billion+ Underway No

FTX, November 2022

 

Chapter 11 $9 billion Underway No

Celsius, June 2022

 

Chapter 11 $1.2 billion None so far Paused

Babel Finance, June 2022

 

Restructuring (to avoid bankruptcy) $280 million None Yes

Three Arrows Capital, July 2022

 

Chapter 15 $3.5 billion $40 million so far No

Voyager Digital, July 2022

 

Chapter 11 $1.3 billion $270 million approved so far Paused

Zipmex, July 2022

 

Moratorium $53 million None so far Yes

Hodlnaut, August 2022

 

Judicial management $193 million None so far Paused

Blockchain Global, November 2021

 

Voluntary administration $15 million None No

ACX, February 2020

 

Voluntary administration $15 million None No

FCoin, February 2020

 

Chapter 11 $130 million None No

Cryptopia, May 2019

 

Chapter 15 $16 million $7 million+ No

Quadriga, 2019

 

Canadian Bankruptcy and Insolvency Act (BIA) $190 million $190 million $40 million+ No

Mt. Gox, 2014

 

Chapter 15 850,000 BTC 200,000 BTC No

The complete chronology of the crypto implosion

Investors are often deterred by reports of crypto firms declaring bankruptcy. In the last few years, cryptocurrency prices reached all-time highs, but they have now plummeted sharply. Recent Chapter 11 filings by cryptocurrency firms have sparked fearful markets again.

  • 1. Do Kwon dissolved Terraform Labs 

    Despite Terra’s unprecedented expansion, fissures started to appear. These indicators failed to indicate a market move in bitcoin.

    In 2022, Do Kwon shut down Terraform Labs. This happened barely a few days before UST and LUNA fell. Terraform Labs Korea suspended operations in Seoul and Busan on April 30. Do Kwon served as the liquidator in the crypto bankruptcy case. Then, the marketplace experienced issues with the platform.

  • 2. UST loses its peg

    On May 8, 2022, the UST stablecoin temporarily dropped to $0.987. Certain investors formerly saw UST as the linchpin of the bitcoin industry. Following the accumulation of Avalanche and Bitcoin, UST has lost value. When investors depart the Anchor Protocol loan market, which offers high interest rates to U.S. Treasury depositors, the U.S. Treasury is said to have been depegged. Significant amounts of UST were withdrawn from liquidity markets by Terraform Lab developers.

  • 3. Fearful investors drop LUNA and UST, plunging prices

    After such occurrences, the value of LUNA and UST fell by 70 to 99 percent. In spite of Terra’s attempts to enhance its reputation as a reliable currency, its value plunged after the UST abandoned its dollar peg. The price of UST was determined by an algorithm, distinguishing it from all other stablecoins. The word LUNA was invented to help UST. Investors and traders panicked and sold US dollars in exchange for foreign currencies, devaluing the US dollar and the luna.

  • 4. Extreme market conditions halt crypto withdrawals

    The LUNA/UST disaster induced market anxiety. In extreme market conditions, withdrawals may be prohibited. In order to avert market harm, the business halted all withdrawals after learning about LUNA and UST. Celsius has around $12 billion in total assets and $8 billion in loans. When its assets plummeted by half in less than six months, concerns were raised about its financial stability. The value of Celsius’s CEL holdings has fallen by 97%. There was widespread anxiety that Celsius might be unable to pay its debts.

  • 5. Terra Ecosystem leaks startle huge companies

    Numerous big cryptocurrency platforms were taken off guard by the collapse of the Terra ecosystem, causing many to fear the emergence of other Chapter 11 filings in the cryptocurrency sector. UST was the leading stablecoin for a few months. As a consequence of LUNA and UST, the market for cryptocurrencies collapsed. Numerous firms, including Celsius, attempted to ease market turmoil in the cryptocurrency space. Although these steps may have stopped a catastrophic market meltdown in the near term, they have raised market volatility and stoked worries of a second cryptocurrency market crisis.

  • 6. Hedge funds, brokers, and lending platforms risk insolvency

    Numerous big cryptocurrency platforms were taken off guard by the collapse of the Terra ecosystem, causing many to fear the emergence of other Chapter 11 filings in the cryptocurrency sector. UST was the leading stablecoin for a few months. As a consequence of LUNA and UST, the market for cryptocurrencies collapsed. Numerous firms, including Celsius, attempted to ease market turmoil in the cryptocurrency space. Although these steps may have stopped a catastrophic market meltdown in the near term, they have raised market volatility and stoked worries of a second cryptocurrency market crisis.

  • 7. The Aftershock: FTX files for chapter 11

    FTX (together with its worldwide platform, independent exchange FTX.us, and Alameda Research), once the world’s third-largest cryptocurrency exchange by volume, was unable to satisfy client withdrawal requests in 2022, making the year even worse for crypto. Now, the firm has filed for Chapter 11 bankruptcy in the United States and announced the resignation of its founder and CEO, Sam Bankman-Fried. The bankruptcy petition itself is now accessible (pdf) and cites 134 company entities as being involved.

  • 8. FTX collapse contagion spreads

    After the fall of FTX, the contagion of illiquidity begins to spread throughout the crypto industry. Many companies in the market are directly affected. Genesis, an institutional trading firm owned by Digital Currency Group (DCG), has $175 million in assets locked up in FTX. Restructuring experts are helping the company’s creditors escape bankruptcy.

  • 9. BlockFi files for chapter 11

    BlockFi, a cryptocurrency lender, filed for Chapter 11 bankruptcy on 11/28/2022 in the U.S., about two weeks after the collapse of FTX. Investor protections for cryptocurrencies vary from those for more conventional assets such as stocks and bonds. BlockFi Inc. becomes the second digital asset company to fail following the rapid collapse of the FTX exchange and fueling fears of further business disasters. Is BlockFi closing its doors? It is very hard to tell, for now BlockFi has stated in a statement that it is “no longer able to operate as usual.”

  • 10. Genesis files for chapter 11

    Genesis, a cryptocurrency lender, filed for Chapter 11 on 01/19/2023 in the U.S., affected by the collapse of FTX and other previous defaults like 3AC. The company, which is owned by Digital Currency Group and lends out cryptocurrency, filed for bankruptcy in the US, saying it has money problems and owes more than $3 billion to creditors. Gemini has the biggest claim, for almost $900 million, and is the biggest creditor. The Securities and Exchange Commission has also stated that the company used the Earn program to offer and sell securities that were not registered. Genesis had frozen customer redemptions in November 2020 due to concerns about the impact of the FTX bankruptcy on other companies in the sector.”

Image: Skull Vectors by Vecteezy

© 2022 Cryptopress. For informational purposes only, not offered as advice of any kind.

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