Home » Crypto Scandals Wipe Out $650 Billion

Crypto Scandals Wipe Out $650 Billion

by Natalie Christie

The Bank of International Settlements (BIS) recently released a report titled “Crypto Shocks and Retail Losses” which revealed that the crypto industry lost over $650 billion after two major scandals that rocked the market last year. The first scandal was the $40 billion Terra-Luna ecosystem collapse in May, which resulted in $450 billion being wiped from the market. The second scandal was the collapse of the world’s third-largest crypto exchange FTX, which removed over $200 billion from the market.

The BIS found that daily user activity grew on crypto trading platforms last year as investors tried to adjust their portfolios. While whales and larger investors sold off their holdings, medium-sized holders and retail investors increased their bitcoin positions by buying the dip. The BIS also found that the steep decline in the size of the crypto sector has not had repercussions for the wider financial system so far due to the current level of crypto adoption. However, if crypto were more intertwined with the real economy and the traditional financial system, the aggregate impact of a shock in the crypto world could have been much larger.

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