The year 2023 has been a witness to significant developments in the crypto world, marked by company bankruptcies and subsequent regulatory changes. These events have been pivotal, ranging from Sam Bankman-Fried’s FTX to BlackRock, CZ, and Binance’s involvement. Circle’s stablecoin project USDC faced a crisis when it revealed a $3.3 billion reserve in the insolvent Silicon Valley Bank, leading to a sharp decline in its value and market cap. Major exchanges like Coinbase and Binance halted USDC transactions amidst the turmoil.
Euler Finance suffered the year’s biggest hack, losing $197 million in assets, including Ethereum, USDC, Bitcoin, and DAI. The vulnerability exploited by the hacker was inadvertently introduced during a security patch. Despite the loss, most funds were recovered after the attacker accepted a bounty offered by the project. FTX’s celebrity endorsements drew attention, particularly Taylor Swift’s cautious approach, contrasting with other celebrities who promoted the exchange without due diligence. However, Swift’s deal was later canceled by the disgraced former CEO Sam Bankman-Fried himself.
BlackRock filed for a spot Bitcoin ETF, aiming to make Bitcoin investments more accessible. The SEC’s hesitation to approve spot Bitcoin ETF applications continued, despite numerous firms seeking approval. The SEC also took legal action against Binance and Coinbase for securities law violations, naming various crypto assets as securities. Ripple Labs won a significant legal battle against the SEC, with a federal judge ruling that XRP is not a security on the secondary market.
Three Arrows Capital’s co-founder was arrested for non-compliance with liquidation investigations. Sam Bankman-Fried was found guilty of defrauding FTX customers, lenders, and investors, facing up to 115 years in prison. The U.S. Department of Justice reached a historic settlement with Binance, imposing a $4.3 billion fine and criminal charges against CEO Changpeng Zhao. Zhao agreed to step down as CEO, with Richard Teng taking over.
Do Kwon’s extradition process continues, with the final decision pending. Investors ended 2023 on a high note, with Bitcoin and Ethereum experiencing significant price increases. Solana emerged as the top gainer among the top ten crypto assets by market value. With a potential spot Bitcoin ETF approval, the upcoming Bitcoin halving event, and expectations of a new crypto bull cycle, 2024 looks promising for both retail and institutional investors.