Everyone knows the 7 Wonders of the World. This was the impetus for this article as I don’t think there are articles out there that consolidate some of the crypto scandals that plagued the industry. As you read this, it is hoped that you thread the crypto space with caution. The truth is, even if we DYOR, we cannot never have complete information of the intentions of the developers and designers. So to what extent do we entrust our previous portfolio in their hands? I hope you will gain some clarity after this.

1. Bankruptcy of Mt Gox - If Mt Gox somehow reminds you of Mt Fuji, your instinct is right as Mt Gox operated out of Tokyo, Japan. Founded in 2010, it rose in prominence. During its heyday in 2013-2014, it even oversaw more than 70% of all Bitcoin transactions. This put a luminous target on itself that it could not avert. In all, unscrupulous hackers succeeded in siphoning off 740,000 bitcoin from Mt Gox customers and 100,000 from the company. By the time Mt Gox discovered this, the damage was already incurred, and it had to file for bankruptcy on February 2014. Many investors took a huge hit, with the tiny saving grace that they were subsequently designated as awardees of a Rehabilitation Plan that aimed to return lost funds (137,000 BTC) in the form of USD, BTC or BCH. (https://cryptoslate.com/will-release-of-3b-bitcoin-from-mt-gox-cause-market-bottom-in-august/?amp=1)
2. BitConnect the Ponzi Scam - Founded in 2016, BitConnect introduced a lending program, that claimed to utilise proprietary technology called "BitConnect Trading Bot" and "Volatility Software”. Founder Satish Kumbhani persuaded investors to invest in this lending program. A year later, he discontinued this lending program but manipulated the price of its token, BitConnect Coin (BCC), such that it appeared to be on solid financial ground. Its All-Time High was a jaw-dropping $463.31. Investors who were none the wiser were caught off guard when BitConnect terminated its operations in 2018, after which BCC crashed spectacularly as a result of Kumbhani absconding with the users’ funds. It turned out that the earliest investors were paid with money provided from people who joined after them, hence the reason for the Lending Program to last for about a year. Incidentally, Kumbhani is still not taken into justice yet. (https://www.zdnet.com/finance/blockchain/bitconnect-founder-indicted-in-2-4-billion-cryptocurrency-ponzi-scheme/)
3. Squid Rug Pull - “Squid Game” was a South Korean show that depicted a group of down-and-out people playing traditional childhood games in hopes of getting out of the poverty cycle. The game came with a macabre twist - when they lost a game, they paid for it with their life. Suffice it to say that this TV show was a tsunami that swept all other shows from the global consciousness and planted itself firmly in the minds of Netflix viewers. Riding on the success of the game, the token “Squid” was launched to great fanfare. Naturally, people, mistakenly thinking that the token was affiliated with the TV show, snapped it up. It was a trend exacerbated by traditional media outlets and social media platforms alike who reported on its meteoric rise. At one point, Squid surged to an All-Time High of just over $2860. Subsequently, the developers of Squid made their move. They siphoned off investors’ funds that amounted to a total of $3.3 million as the holders watched Squid plunge to zero in helplessness and horror. It was a rug pull executed mercilessly before our eyes. (https://www.washingtonpost.com/world/2021/11/02/squid-game-crypto-rug-pull/)
4. Collapse of Iron Finance - IRON was an algorithmic stablecoin whose value was pegged to TITAN and USDC. On the fateful day of June 16, 2021, the price of TITAN rose exponentially, thus triggering whales to sell their TITAN bags and deriving profits. This, however, led to a wave of panic selling, which exerted downward pressure on TITAN’s price. TITAN fell to zero, which caused IRON to lose its peg and depreciate in value as well. Hapless investors watched as their life savings vapourised to zero overnight. (https://cryptopotato.com/iron-finances-titan-token-crashes-to-0-in-a-sudden-defi-bank-run/)
5. Collapse of the Terra blockchain - This historic event happened on May 7, 2022 when more than $2 billion worth of UST was unstaked and withdrawn from the Anchor Protocol. Hundreds of millions of UST were immediately sold, thus causing UST to be depegged. This depegging raised alarm bells for investors who flocked to sell their UST bag, thus aggravating the selling pressure and devaluing UST further. Since UST was designed to be an algorithmic stablecoin, its fate was inextricably linked to that of LUNA. As UST spiralled downwards, LUNA also depreciated in value. Both Top 10 coins fell out of prominence and into oblivion, in a crash that could only described as the equivalent of watching Titanic sink. Over $17 billion was wiped out from the crypto market. (https://www.cnet.com/google-amp/news/luna-crypto-crash-how-ust-broke-and-whats-next-for-terra/)
6. Bankruptcy of Three Arrows Capital - Three Arrows Capital, a Singapore-based crypto hedge fund, was doing remarkably well. After all, one of the co-founders, co-founder Su Zhu, just bought a Good Class Bungalow (GBC) in 2021. However, cracks in its practices began to poke their way into the open, particularly when it failed to repay a loan of 15,250 BTC and $350m of USDC to Voyager Digital in June 2022. Things swiftly unravelled apart - so drastic that it filed for bankruptcy in the United States in early July. Aggravating matters was a liquidation initiated by a British Islands court. The plot currently thickens, with both founders, Su Zhu and Kyle Davies, said to have fled Singapore and remaining uncontactable by their liquidators. One wonders what will become of Su Zhu’s GBC. (https://cryptoslate.com/3ac-founders-in-hiding-offices-abandoned-as-court-filing-cites-fear-that-assets-may-be-disposed-of/)
7. Bankruptcy of Celsius - Celsius was one of the major players in the crypto lending space. Most people took for granted that it would prevail through the bear market. However, Celsius dropped a bombshell when it announced on June 13, 2022 its immediate move to pause all withdrawals, Swap, and transfers between accounts. The tide had subsided and Celsius was caught swimming naked, having exposed its clients’ funds in various risky and illiquid ventures and not being able to prevent potential bank runs. Subsequently in July, it filed for Chapter 11 Bankruptcy, which enabled it to continue its operations and fulfil its debt obligations. The problem? It now has a shortage of $1.2 billion in its balance sheet, which is a cause of grace concept for investors who wonder exactly when they will be able to receive a portion of their assets back, if at all. ( https://www.cnbc.com/2022/07/13/embattled-crypto-lender-celsius-informs-state-regulators-that-its-filing-for-bankruptcy-imminently-source-says-.html?__source=androidappshare)