Key Events in the Crypto Industry: News Retrospective of 2022
The past year proved to be challenging in many aspects. The general situation in the world also affected the cryptocurrency market, with 2022 being a year of shocks and challenges.
CP Media prepared a review material with the key events that made 2022 memorable by the whole crypto and investment community. We invite you to recall the highest-profile crypto news in chronological order, from January to December.
In early January, the Estonian Ministry of Finance tightened requirements for companies interested in registering a cryptocurrency business in the country. The new requirements raised the minimum authorized capital for crypto businesses tenfold, from €12,000 to €120,000. In some cases, the minimum threshold may go up to €350,000 upon the regulator’s decision.
The New Year holidays didn’t come to an end, as mass riots erupted in Kazakhstan, resulting in a large-scale political crisis. The authorities virtually shut off the country from the Internet. At that time, mining companies based in Kazakhstan accounted for 18% of the global Bitcoin hash rate. Needless to say, these events were reflected in the price of the first cryptocurrency. It dropped by more than 20% by the end of the month.
In February, China launched its digital yuan pilot project. Chinese CBDC began circulating during the Winter Olympics. By early October, the volume of transactions involving the digital yuan had already reached nearly $14 billion. China’s digital currency pilot project expanded to 15 provinces. Over 5.6 million merchants accept the digital yuan as a means of payment, and the total number of transactions exceeded 360 million by early October. The year-end figures are sure to be even more impressive, and the PRC firmly took the lead in CBDC development and adoption.
On February 24, Russia began a military operation against Ukraine. It had a considerable impact on the whole world. The economy fell under its sway because the military actions were followed by extensive economic sanctions against Russia. The situation boosted the role of cryptocurrencies as a means of cross-border financial transfers and a way to circumvent sanctions restrictions on the part of ordinary citizens and small and medium businesses.
In March, when the initial shock after the military conflict between Russia and Ukraine had passed, the crypto community expressed unequivocal support for Ukraine. Many companies, payment service providers, and cryptocurrency exchanges supported international sanctions against Russia. However, the situation triggered discussions regarding the politicization of the modern crypto market and the degree of governmental influence on it.
Nevertheless, March saw some positive news. Yoon Suk-yeol, a supporter of cryptocurrencies, won the presidential election in South Korea. This greatly determined the country’s course to strengthen the development of crypto market regulation, ambitions for global leadership in the field of Metaverse technologies, and the development of state blockchain initiatives.
In March, it became known that Yuga Labs, creators of the most popular NFT collection Bored Ape Yacht Club, bought the rights to CryptoPunks and Meebits collections from Larva Labs. This put the two largest and most popular NFT collections under Yuga Labs’ management. Later new management changed the rules of using CryptoPunks tokens, giving their owners more freedom for commercial purposes.
At the end of March, hackers broke into the Ronin sidechain, which powers the popular blockchain game Axie Infinity. The attack totaled about $625 million in losses. The incident became the biggest hack of all time in the DeFi segment.
The TON Foundation was involved in launching state crypto projects in three African countries: Congo, Cameroon, and the Democratic Republic of the Congo.
The acquisition of Twitter by Elon Musk kicked off in April. On April 14, the businessman’s first offer to buy 100% of the social network was made public. Eventually, Musk bought Twitter for $44 billion on October 27. Since Twitter is one of the places of active communication of the crypto community, this deal was symbolic for the market — even more so because it was immediately followed by rumors of Twitter coin development and other crypto initiatives by Elon Musk. Next year is sure to be full of news on this topic.
A pivotal event in May was the collapse of the Terraform Labs projects. CoinsPaid Media covered these events in detail. We covered these events in detail on CoinsPaid Media.com. In a nutshell, the stablecoin UST lost its peg to the dollar, causing LUNA, the token providing its value, to fall in price. This put more pressure on UST’s value, provoking an even greater drop in LUNA’s price. A “death spiral” emerged, with both assets losing nearly 100% of their value. Amid these events, BTC dipped below $30,000.
In May, payment giant SWIFT announced its first experiments with CBDC for cross-border payments.
June was marred by liquidity problems faced by cryptocurrency platforms Celsius and Three Arrows Capital. Both suffered from the Terra collapse. The two platforms were forced to undergo restructuring and partial bankruptcy. Their collapse caused the most tangible damage to crypto investors throughout 2022. Realized user losses reached $33 billion per week at the peak of the crisis. During that period, Bitcoin plunged below $20,000 for the first time since 2020.
On July 1, the EU approved regulatory requirements for the cryptocurrency market as part of the MiCA directive. The bill is still awaiting several more stages of approval and is tentatively set to take effect before 2024. According to the document’s text, cryptocurrencies without issuers, such as Bitcoin, are exempt from regulatory oversight. NFTs are also excluded from regulatory scrutiny. But stablecoin issuers will have to open representative offices in the EU, get registered with the European Banking Authority, and prove the liquidity of reserves to the regulators.
Solvency problems with Three Arrows Capital provoked the bankruptcy of crypto broker Voyager Digital. The company valued its assets at $1 billion and its liabilities at $10 billion. The number of creditors of the broker exceeded 100,000. Access to their funds was limited until the restructuring process was completed.
However, Voyager Digital turned out to be owned by Sam Bankman-Fried, FTX CEO. He claimed to have “a few billion” to support the industry and tried to save his brainchild with funds from other companies.
Word has gotten out that investor funds locked after the Mt.Gox exchange was hacked in 2014 may be unblocked. As a result, the collection of applications for repayment was extended until March 10, 2023. A timeline for repayment will be September 30. Yet, it’s 142,000 BTC we’re talking about, and many analysts are terrified of the PUMP effect caused by this amount of Bitcoin appearing in the market.
In August, Iran went from theory to practice in circumventing economic sanctions with cryptocurrencies and conducted its first import transaction paid in crypto. The transaction amounted to $10 million. Iranian officials said they intended to use smart contracts and cryptocurrencies in foreign trade with “target countries” by the end of September.
Cryptocurrency mixer Tornado Cash came under sanctions from the U.S. Treasury Department. The U.S. regulator discovered that the service and similar platforms were used in money laundering. Along with that, the Dutch authorities detained the alleged developer of Tornado Cash. All this sparked violent protests in the cryptocurrency community and a lively discussion on the practical decentralization of cryptocurrencies and the extent of government influence over them.
September saw Ethereum’s successful transition from the Proof-of-Work consensus algorithm to Proof-of-Stake. This is a huge step, which the largest altcoin has been moving toward deliberately over the past two years. Ethereum’s carbon footprint has been reduced to a minimum, and the project is moving steadily along the roadmap to greater throughput, lower fees, and better decentralization.
In October, officials from the Russian Ministry of Finance acknowledged that local companies had already started using cryptocurrencies to circumvent sanctions in cross-border transactions. Given this background, the country’s authorities plan to introduce legislative regulation of international payments in crypto. However, there are no prospects of legalizing cryptocurrencies in Russia.
Around the same time, representatives of the U.S. Treasury Department warned that cryptocurrencies could threaten the stability of the country’s financial system if they are closely related to the economy. The agency urged lawmakers to increase market supervision for this reason.
Reddit overtook OpenSea in the number of NFT users. Reddit has more than 3 million registered Vault crypto wallets. Yet, about 2.5 million of them were created to store purchased NFT avatars. Nevertheless, Reddit is now the largest NFT platform.
Meanwhile, the crypto winter has been strongly felt in all areas of the blockchain industry. Layoffs at cryptocurrency companies began in the summer, escalated to tangible sizes in October, and continued in November. Dismissals affected Coinbase, BitME, Bybit, Gemini, Crypto.com, WazirX, Digital Currency Group, Galaxy Digital, Dapper Labs, Stripe, NYDIG, STEPN, and many other companies. Major mining firms Bitfarms, Core Scientific, Argo Blockchain, and others began to face problems.
The last major event of 2022, the collapse of FTX Group, occurred amid this background. It’s not comparable to the bankruptcies of Terra, Celsius, and Three Arrows Capital in terms of economic damage to investors. Realized losses for crypto investors reached $9 billion in the first week after FTX’s bankruptcy and have been dwindling ever since. The implications for the industry, however, are sure to be much more substantial. It’s already clear that this case is being used as an excuse to tighten control over the cryptocurrency market by U.S. authorities. Other governments may follow suit. So, 2023 will most likely go under this trend for the cryptocurrency market.
The last big event of 2022 is the collapse of FTX Group. In terms of economic damage to investors, it isn’t comparable to the bankruptcies of Terra, Celsius, and Three Arrows Capital. Realized losses for crypto investors reached $9 billion in the first week after FTX’s bankruptcy and have been dwindling ever since. However, the consequences for the industry are sure to be much more significant. It’s already clear that this situation is being used as an excuse to tighten control over the crypto market by U.S. authorities, and other governments may follow suit. So, the crypto market is likely to follow this trend in 2023.
In December, everyone kept monitoring developments around FTX, but the most interesting news of the month was Telegram’s move to adopt Web3 elements. Firstly, representatives of the messenger announced plans to create their own cryptocurrency wallet and decentralized exchange. Then they offered an opportunity to register anonymous accounts based on the TON blockchain network without tying them to a phone number. Telegram has been running a bot for some time that allows cryptocurrencies to be traded directly in the messenger. The Open Network isn’t technically related to Telegram and is considered one of the most innovative blockchain networks. Telegram actively uses the TON token in its blockchain initiatives. In 2023, we may see another bright star rise in the cryptocurrency market.
Sure, there was plenty more news of different importance in 2022, so this article presents the most significant ones according to CP Media. In 2023, we’ll keep you updated on the hottest crypto news.