It’s been nearly 1 year since the implosion of Terra Luna and its stablecoin, UST lost over $45 billion dollars in value in just a few days. The ripple effects of this event have been catastrophic to the entire crypto ecosystem. Lending protocols like Celsius, BlockFi and Voyager Digital were actively lending crypto or making loans to Three Arrows Capital, who in turn was heavily invested in Terra Luna & UST. All of these companies and several others were forced into bankruptcy due to massive financial losses. This led to the exposure of the shady business practices of the FTX exchange and Sam Bankman Fried. These collective events cast a dark shadow over the rapidly growing crypto industry and plunged it into what many are calling the crypto “Ice Age”. These events have spawned a slew of political leaders using these events as a political platform to gain airtime and publicity. Case in point is Rep. Elizabeth Warren’s recent declaration that she is building an “Anti-Crypto Army”. To make matters worse, regulatory agencies like the CFTC and SEC are handing out Wells notices and lawsuits faster than Elon Musk issues tweets! Since 2021 when Gary Gensler took over as chair of the SEC, there have been 55 enforcement actions against digital asset and crypto firms. The Securities and Exchange Commission has been aggressive in their attacks on the industry, stating that they are willing to help crypto firms, yet when these firms reach out for assistance, the SEC issues a lawsuit. Industry leaders like Coinbase CEO Brian Armstrong and Ripple CEO Brad Garlinghouse have both stood up and claimed foul play on the part of the SEC. After all, how can you approve Coinbase to be a publicly traded company on US exchanges and then claim that their business activities are illegal?
All of this would lead one to believe that crypto is done. That the hype and excitement have evaporated and it’s time to move on. Yet as the proverb goes, It’s always darkest before the dawn.
