Cryptocurrencies and blockchain projects spent most of 2022 in a downward spiral, driven down by financial losses, scandals, and negative publicity. When we wrote about the crypto winter previously, we hadn’t even felt the full impact of the FTX story. From the lofty $3 trillion market cap peak value in 2021, we have endured a steady stream of scandals and disappointments in the blockchain space. With an improvement to prices in January, the blockchain market seems to be stabilizing in 2023. Don’t call it a comeback though – this a cryptocurrency reset…

What Happened in 2022

2022 gave us a range of problems, including scandals, market forces, scams, and more scandals.

2022 Scandals, Part 1

Terra’s Downfall

In early May, over $300 billion was wiped off the crypto market cap when terraUSD, a U.S. dollar-pegged stablecoins, imploded. Singapore-based Terra derived its supposed stability from algorithms that linked its value to Luna (a sister coin).

Three Arrows Capital Goes Down

In late June, Singapore-based crypto hedge fund “3AC” was brought down by the collapse of cryptocurrencies terraUSD and Luna. 3AC estimated its assets to be $1 billion in July, a paltry sum next to its liabilities, which stood at over $3 billion.

Voyager Goes Down Too

In the wake of 3AC’s demise, Voyager filed for bankruptcy when 3AC defaulted on their crypto loan worth over $650 million.

Tornado Cash

After the U.S. Department of Treasury accused Tornado Cash of laundering over $7 billion of virtual currency since 2019, the Office of Foreign Assets Control (OFAC) sanctioned the virtual currency mixer.


Celsius Network announced its Chapter 11 bankruptcy in July after writing over $8 billion in loans, offering high yields of up to 17% APY. The downfall of Celsius is attributed to the overall market decline of this crypto winter…

2022 Crypto Winter

Crypto winters occur when prices contract and remain low over an extended period of time. After a market high in November 2021, cryptocurrency prices declined for months, making sharper drops after the scandals from the first half of the year. Often seen as a barometer of the market, Bitcoin topped $48,000 in March, falling to about $18,000 in May. For the rest of the year, it traded in the range of $16,000 to $25,000, ending around $18,000. In addition to the early year scandals, other factors contributed to the market retreat, including high inflation and aggressive interest rate hikes by the Federal Reserve.

2022 Scams

Research shows that unwitting victims lost over $4 billion to cryptocurrency scams in 2022. Some of the biggest hauls resulted from theft & hacking — especially with DeFi protocols. Some of the scams have colorful names, like rugpulls or pig butchering. A rugpull occurs when a blockchain project draws in money and then suddenly vanishes. In pig butchering, thieves romance a victim using online dating, getting them to invest in crypto, later absconding with the funds and ghosting. Reports show that scams grew by over 20% in 2022.

2022 Scandals, Part 2


The most noteworthy 2022 scandal in the cryptocurrency market was the FTX implosion. The crypto exchange, once worth an estimated $32 billion, filed for bankruptcy protection in November. In the collapse, over $1 billion in customer funds went missing. Shock waves from this scandal are far-reaching, from impacts on sponsorships (Miami Heat’s arena) to politics (major donations) to blockchain projects…


The parent company of three key crypto players, DCG, is feeling the impact of the market turmoil. Genesis is a crypto lender and broker, Grayscale Investments is an asset manager with a multi-billion-dollar bitcoin fund, and CoinDesk is a popular cryptocurrency news source (full disclosure, we subscribe). The damage is still being evaluated.


A prominent crypto exchange, BlockFi, had over $1 billion of its assets tied up with FTX and Alameda Research. BlockFi filed for bankruptcy protection in late November.

Don’t Call It a Comeback (Yet): The 2023 Rebound

The crypto market cap fell to a low of about $755 billion in late November 2922. Only a year earlier, the market topped $3 trillion. Now the markets have kicked off 2023 with a healthy boost, with many crypto projects posting notable gains in just a few weeks. It has the feel of crypto spring so far, although it’s far too early to celebrate. Many hope that the industry has learned from mistakes. Solutions in discussion include greater project transparency, increased regulation, and more decentralization. With the retail side feeling fatigue and frustration, the projects must evolve or perish. The strong will survive, while the projects that fail to address the changing landscape will not. Confidence is down, so trust must be rebuilt. Don’t call it a comeback yet. This rebound has a long way to go…


2022’s peak inflation — from the Consumer Price Index — was 9.1%, the worst year-over-year inflation increase in over 40 years.

Crypto startups raised $18.3 billion in venture capital during the first three quarters of 2022. That amount is lower than the $23 billion raised in the same span of 2021, and continued investment defies retail market sentiment.