Scariest Stories Of 2022

Ethereum’s Merge

Not sure how much has to be said about this one. Was it scary? Sort of. Was it exciting? Not really. The reaction from the cryptocurrency community was sort of like what happened at Blizzcon 2018 when Diablo Immortal was announced (dead room at 9:25). 

Hacks Galore

2022 has yielded some of the biggest cryptocurrency hacks in history – with scary amounts of money lost. 

The biggest hack of 2022, the biggest so far in cryptocurrency history, and the biggest hack in US history is the $625 million attack of the Axie Infinity ($AXS.X) bridge, Ronin. Blame North Korea’s Lazarus Group for that hack. Only $5 million or so has been recovered so far. 

Earlier this month, Binance was hacked for $570 million via the BSC Token Hub bridge. Reports are most of that has been recovered – or is in the process of recovering. 

Going back to February of 2022, the crypto market experienced the hack of a Solana ($SOL.X) bridge, Wormhole, to the tune of $325 million. 

The Nomad bridge attack in August resulted in a $190 million loss in value. 

The algorithmic crypto market maker, Wintermute, has so far been hacked twice in 2022, most recently for roughly $160 million in late September. 

See a pattern? Bridges suck. Nearly $2 billion in losses from hacks so far in 2022. Let’s hope we’ve seen the end of it – but not likely. 🦹

SEC vs. Ripple

Is XRP ($XRP.X) a security?  

The uncertainty in the SEC vs. Ripple case continues. Despite some positive sentiment and ‘wins’ with the case, it remains up in the air what the verdict will be. Ripple and the SEC have both filed for Motions of Summary Judgement – which means the facts are not in dispute, and only the question of law remains. In other words, both sides want the judge to decide who wins. 

The ramifications of this case will likely determine the definition of which cryptocurrencies are considered securities and which are not. A win by Ripple is what the industry wants. 

Luna, Three Arrows Capital, Voyager

There are dumpster fires, and then there’s 2022’s crypto winter brought to you by Do ‘Con’ Kwon’s stable(lol)coin, TerraUSD ($UST.X), which led to an avalanche of firms failing like Celsius ($CEL.X), Voyager ($VGX.X), Three Arrows Capital, and a myriad of other entities tied to any or all of the big players. 

Someone will probably make a movie out of that disaster. 

NFTs

All aboard the U.S.S. Stupid Monkey Boat. 2022’s NFT insanity is essentially this year’s version of 2018’s ICO fiasco. But instead of Bitconeeeeeect we got people shilling hundreds of thousands of dollars at digital art – a boom and bust that puts Tulip Mania to shame. 

Remember Logan Paul’s $623,000 Azuki purchase? It’s worth $10. 

The guy who paid $2.9 million for Jack Dorsey’s first tweet? The highest bid for it when he wanted to sell it was $200. The buyer, Sina Estavi, called it the Mona Lisa of the digital world. Maybe he’s never seen the Mona Lisa?

OpenSea user, ‘cchain’, bought a Bored Ape NFT for $350,000 in August 2021 and sold it for $115 in March. 

Or this poor sap who accidentally sold a CryptoPunk for $19,000 when it was worth $850,000. He put it up for 4.444 ETH, not 4,444 ETH – he used a decimal instead of a comma. 

But like ICO’s, NFTs don’t appear to be going away anytime soon. The market is getting rid of the crap and keeping the good stuff. It’s maturing and going through its own growing pains. Even today, we can see examples of NFTs having a use case outside of stoned primates wearing dumb hats. 🦧

Tornado Cash

Tornado Cash is a crypto tumbler – which is essentially a service that mixes cryptocurrencies that are not private with a bunch of other funds to obfuscate the source. It’s not impossible to track or trace the transactions, but it does make it more difficult – like putting up a bunch of roadblocks and switching road sign directions. 

So why not use a privacy coin? Good question! Because the things that people want to use Tornado Cash for are solved with privacy-based cryptos. Anyway. 

In August, the U.S.Department of the Treasury’s Office of Foreign Assets Control (OFAC) blacklisted Tornado Cash and Blender.io – making it illegal for any US citizen or company to use the service(s). The reason for the blacklist? North Korea’s Lazarus Group laundering stolen crypto through Tornado Cash. 

What makes this story scary is that two days after OFAC’s announcement, the dude who wrote the code (Alexey Pertsev), was arrested by Dutch authorities – because he wrote the code for Tornado Cash. Pertsev was held for 14 days pending an investigation. 

When the 14 days were up, the judge denied bail and ordered him to stay in jail another 90-days while waiting for charges– even though he has not been charged with a crime. The Dutch police don’t even know why Pertsev was arrested. 

Kraken’s founder Jesse Powell, Ethereum’s ($ETH.X) Vitalik Buterin, Cardano’s ($ADA.X) Charles Hoskinson, and Uniswap’s ($UNI.X) Hayden Adams were just some of the big names in crypto who criticized the move by OFAC and the Dutch. 

In a nutshell, the furor in the crypto community is related to Pertsev’s arrest for writing code. Code that was then used for an illegal purpose. 

To make matters worse, anyone who used Circle’s USDC ($USD.X) on Tornado Cash lost all of their USDC. Circle blocked all USDC addresses on Tornado Cash – whether you were innocent or not. 🌪️