Unraveling the Crypto Crisis: Timeline of Major Incidents

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Fredrik Vold

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Fredrik Vold

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June 26, 2023 06:55 EDT

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The regulatory crackdown on crypto in the US has certainly intensified with the Securities and Exchange Commission’s (SEC) lawsuit against Binance and Coinbase, but our timeline shows that the crisis has already been ongoing for a long time.

These are the major incidents that shaped crypto in 2022 and so far in 2023:

2022

• May 9: USD-pegged stablecoin TerraUSD fell below its $1 peg price, triggering a sell-off and losing $40 billion in value.
• June 12: Crypto lender Celsius halted all withdrawals after a run on deposits and what it called “extreme market conditions.”
• June 17: Babel Finance, a crypto lender based in Hong Kong, suspended withdrawals, citing “unusual liquidity pressures.”
• June 27: Crypto hedge fund Three Arrows Capital (3AC), which was heavily invested in TerraUSD, defaulted on loan payments to crypto lender Voyager Digital.
• June 29: A British Virgin Islands court ordered 3AC to liquidate after creditors sued the hedge fund for alleged failure to repay debts.
• July 5: Voyager Digital filed for bankruptcy protection under Chapter 11, saying it wants to “maximize value for all stakeholders” after facing a bank run.
• November 8: Major Bahamas-based crypto exchange FTX agreed to a takeover offer from Binance after experiencing a liquidity crunch.
• November 9: Binance walked away from its offer to rescue FTX, saying the issues are “beyond our ability to help.”
• November 11: FTX filed for Chapter 11 bankruptcy protection.
• November 28: US-based crypto lender BlockFi filed for bankruptcy.
• December 12: FTX CEO Sam Bankman-Fried arrested in the Bahamas following formal notification by the US. He is later extradited to the US.
• December 22: Sam Bankman-Fried is released on $250 million bond, but ordered to remain in house arrest with his parents in California.

2023

• January 12: The SEC sued crypto firms Genesis and Gemini, saying both firms sold “unregistered securities.”
• January 18: Crypto news site CoinDesk put itself up for sale as its owner Digital Currency Group (DCG) faces liquidity issues.
• January 19: Crypto lender Genesis filed for chapter 11 bankruptcy protection.
• February 16: The SEC charged Terra founder Do Kwon with misleading US investors who purchased his cryptocurrencies. Kwon’s whereabouts remained unknown at the time, despite him being wanted by multiple countries.
• February 23: US prosecutors issued a new indictment against FTX co-founder Sam Bankman-Fried that included additional criminal charges.
• February 28: FTX co-founder Nishad Singh pleaded guilty to fraud charges, and reportedly cooperates with prosecutors to build a case against Sam Bankman-Fried.
• March 1: The US-based and crypto-friendly bank Silvergate Capital said it is evaluating its ability to stay in business.
• March 22: The SEC notified Coinbase of impending enforcement action as the regulatory crackdown on crypto continued.
• March 23: Terra founder Do Kwon was arrested in Montenegro while trying to leave the country using a forged passport, and was charged with fraud by the US.
• March 27: The Commodity Futures Trading Commission (CFTC) sued Binance for offering unregistered crypto derivatives to US traders.
• March 28: Prosecutors accuse Sam Bankman-Fried of bribing Chinese officials to gain access to frozen funds.
• May 8: Sam Bankman-Fried asked a judge to dismiss most of the criminal charges in the case against him, arguing they were “dramatic” and turned “civil and regulatory issues into federal crimes.”
• May 12: Do Kwon is granted bail in Montenegro, allowing him to leave prison and remain under house arrest while awaiting trial.
• June 5: The SEC sued Binance and its CEO Changpeng Zhao for operating an unlicensed securities exchange in the US and “blatant disregard” of its rules.
• June 6: The SEC sued Coinbase just a day after Binance was sued, with the regulator saying Coinbase operated illegally without registering as an exchange and offering unregistered securities.