We’ve all been feeling the effects of the bear market, but some more than others. As crypto slumped, it dragged lots of big name firms with it.
Here’s a rundown of the biggest casualties so far.
This didn’t go quite to plan.
The one that started it all. Terra LUNA’s collapse put the markets into free fall. After UST lost its peg with the dollar, LUNA subsequently fell by 99.99%, dropping to nearly $0 in a matter of days. Investors lost millions. People were literally rekt and the markets still haven’t recovered. Terra’s emblematic talisman Do Kwon is now MIA (he’s not on the run, honestly) and wanted by South Korean police.
#2 Three Arrows Capital
Hedge Fund 3AC didn’t last long in the nuclear winter following LUNA’s collapse. It admitted to having $200 million invested in Terra but other reports suggest total exposure was around $560 million. As crypto plummeted, customers began withdrawing funds. 3AC simply couldn’t cover them all or deliver on promised annual returns of 20%. Bankruptcy papers subsequently revealed that the firm borrowed billions to fund its trading activity.
On June 13th, Celsius made the chilling announcement that it was “pausing all withdrawals.” The investment company has since filed for bankruptcy, leaving $4.7 billion in user funds in deep peril. Celsius blamed “extreme market conditions” as devalued assets and a sudden run on withdrawals meant that it couldn’t fulfil its obligations. Terms and conditions state that customer funds “may not be recoverable."
Brokerage firm Voyager suspended withdrawals in early July and filed for bankruptcy soon afterwards, citing “volatility and contagion.” Its assets were heavily devalued and it was also owed $350 million by 3AC. The company had at least 100,000 creditors and up to $10 billion in assets. Much like Celsius it also promised returns that now look unrealistic.
Vauld couldn’t cope with the volume of customer withdrawals in the bear market. A popular lending firm, Vauld held $46.5 million in assets before announcing on July 4th that it would “suspend all withdrawals, trading and deposits.” A thread blamed the “collapse of Terraform Lab’s UST stablecoin, Celsius Network pausing withdrawals, and 3AC defaulting on loans.” It's currently mulling a buyout from Nexo.