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Inventory of the six thunderstorm events in the history of encryption: Mt.Gox, Bitfinex, QuadrigaCX, etc.

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There is no myth in the encrypted world, breaking the obsession with giant whales, and disenchanting institutions may be the dark thread hidden in the period.

Original title: "FTX is not the first and will not be the last, an inventory of 6 major thunderstorms in the history of encryption"

Original author: Terry, vernacular blockchain

November 12 , Autism Capital tweeted that FTX insiders are likely to be trying to abscond with money, and the transferred amount is about 380 million US dollars. It looks like a hacker attack, but it may also be an insider.

Graph Source Network

And yesterday this address will hold All of the over 48.45 million DAI points have been exchanged for about 37,500 ETHs. As of now, the address holds 217,235 ETHs, worth about 276 million US dollars.

01 Dramatic collapse of FTX

No one expected In addition to "312" and "519", the sudden collapse of FTX will lead to another "119" anniversary in the encryption industry.

The FTX incident is also regarded as the Lehman crisis in the encrypted world. Looking back now, although this avalanche caught many people off guard, it was another step The step node is compact:

First, a financial document disclosed by CoinDesk on November 3 pointed out the assets and debts of SBF's Alameda Research, the key lies in its On November 30, it held a total of US$14.6 billion in assets, nearly half of which were related to FTT and Solana;

Then FUD sentiment continued to ferment, and on the evening of November 6, Changpeng Zhao The collapse was accelerated by the announcement that Binance would sell all the FTT on its books in the coming months;

Although Alameda's balance sheet Worrying, but Alameda and SBF themselves and Zhao Changpeng expressed their opinions back and forth, which stabilized the market’s doubts to a certain extent. Everyone was more focused on eating melons, and did not anticipate the seriousness and impact of this incident.

Until the early morning of November 9th, SBF first tweeted, "A strategic transaction agreement has been reached on FTX.com and Binance, and the team is working hard to deal with the backlog. Afterwards, Changpeng Zhao retweeted the confirmation, saying that he had signed a non-binding letter of intent. After the market experienced a short-term optimistic upside, the seriousness of the FTX crisis began to emerge.

The impact of the "119" incident on the entire market is not only in terms of assets and prices, but more importantly, it has a profound impact on industry confidence and regulatory expectations: a global front The three major trading platforms, a leading company in the limelight, privately misappropriated user assets and even caused a deficit of billions of dollars, so that it collapsed overnight.

The entire FTX has been developed to the present, and then go to review, few people can think that the beginning of all this will be so dramatic, let alone a The collapse of the $32 billion giant will be so fast, and the secondary disaster it caused may have just begun.

This has also led to recent rumors about other CEXs one after another, especially the market's doubts about its reserve funds, which has led to a sudden increase in the pressure on many trading platforms So much so that the collapsed trading platforms began to disclose their own reserves (as for the actual effect, there are still different opinions).

02 CEX's "FTX Moment"

In addition to FTX, if you look at the encryption industry and the entire history of CEX development, you will find that various accidents in CEX (hackers, burglars, etc.) are almost impossible to stop.

Mt.Gox: Once "The World's Largest Bitcoin Trading Platform"

Mt.Gox is the well-known "Mentougou" in the industry. When it was the most prosperous year, its trading market share reached more than 80% of the world. Therefore, it is conceivable that after it broke out hackers stealing coins that year, it would have a big impact on the entire Bitcoin trading market. An unprecedented impact.

Although the official announcement of the loss of 750,000 bitcoins from customers and 100,000 bitcoins from the company, the whole process seems rather confusing and paradoxical , according to media reports, among the "stolen" bitcoins, the hacker actually stole only 7,000, and the rest were planted by insiders to hackers, and were actually taken away by "insiders". This insider is likely to be the CEO himself...

When the Mentougou incident occurred, the "stolen" bitcoins were worth a total of 487 million US dollars. And if calculated according to today's prices, the price of this bitcoin is more than 30 billion US dollars.

In October last year, the Tokyo District Court officially approved the settlement plan proposed by the Bitcoin trading platform Mt.Gox for creditors. The number of coins held" is used as the basis to compensate victims.

In October this year, the Mt. Gox Restoration Plan claim system released a new feature that allows creditors to choose a repayment method and register on the online claim declaration system Payee Information, Deadline January 10, 2023.

Bitfinex: Self-rescue by issuing bonds, the first trading platform "debt-to-equity swap"

In August 2016, 120,000 bitcoins were stolen from Bitfinex, worth 70 million US dollars according to the market price at the time. Just when the market was suspicious and worried about the second "Mentougou", Bitfinex came up with a way to force users to tide over the difficulties with it:

It forcibly reduced 36% of digital assets in almost all user accounts, and issued BFXCoin equivalent to 36% of its account deposits to each user Token, whose initial value is set at US$1, can be traded or bought the shares of iFinex, the parent company of Bitfinex—analogous to the stock market, that is, issuing convertible bonds to survive the crisis.

Dong Zhao, the founder of DFund, who was once very active on Weibo, frequently spoke out for Bitfinex, and was called the "Bitfinex spokesperson in China", was at this time Choose "debt-to-equity swap" and become a shareholder of Bitfinex.

QuadrigaCX, whose founder died bizarrely

Of course, there is also the most bizarre and most capable monster QuadrigaCX, the largest cryptocurrency trading platform in Canada, is probably the most bizarre:

The founder Cotten died unexpectedly. It is quite paradoxical that QuadrigaCX’s cold The private key of the wallet was in the hands of Cotten alone, which resulted in the inability to withdraw encrypted assets worth about 145 million U.S. dollars. In the end, investors and other relevant stakeholders demanded an autopsy (Netflix also really filmed a documentary " Trust Nobody: The Virtual Currency Cold Case").

Picture: Cover of the Netflix documentary "Trust Nobody: The Cold Case of Virtual Currency"

So to some extent In other words, whether you are an old player or a new user, it is also a topic that must be considered to gradually understand DEX and tilt your usage habits and asset allocation towards DEX.

03 The collapse of Do Kwon and 3AC

Looking back now, this year’s encryption The industry is full of disasters. In addition to the recent FTX collapse, there are also Do Kwon and 3AC incidents that have had a profound impact on the industry. They can be called the most catastrophic events in the encryption industry since Mt.Gox.

The collapsed Terra empire

Revisiting the de-anchor crisis of the entire UST in May and the entire Terra In the ecological death stampede process, you will find that the self-balancing mechanism of the LUNA-UST bidirectionally minted algorithmic stable currency is the culprit.

First of all, on May 8, 2022, Some giant whales began to sell UST one after another, causing UST to break down slightly, and the liquidity of the UST-3Crv pool also began to tilt.

On May 9, a large amount of funds began to Fleeing from Anchor has caused tremendous pressure on UST anchoring. In this regard, Luna Foundation Guard (LFG) proposed rescue measures, which will loan 750 million US dollars of Bitcoin to OTC trading companies to protect UST pegs, and loan 750 million UST to accumulate Bits

The last straw that broke the camel's back was that Do Kwon did not take effective measures to intervene in the self-balancing mechanism of LUNA-UST:

After UST dropped below 1 USD, UST first hovered between 0.9-1 USD, and the perception of the market itself and the confidence of major UST investors have not yet reached At the bottom of the collapse, although the act of buying UST and casting LUNA for arbitrage has begun to increase, compared with the vast majority of users who still trust Terra's ecology, such arbitrage scale has not had a great impact on Terra's exchange rate peg .

Picture: Do Kwon himself

Until Do Kwon continued to disappear, he did not propose effective measures in time to stabilize market expectations, and let the UST exchange rate Being at a discount for a long time, market confidence finally collapsed under the passing of time and the ever-increasing temptation of arbitrage. In the next few days, the original LUNA and UST completely collapsed.

After that, a series of old historical materials of Do Kwon have been picked up one after another (including Rick Sanchez, an anonymous member of the algorithmic stable currency project Basis Cash), and his whereabouts are still unknown. In September, Interpol reported to the founder of Terra Do Kwon issued a red notice, completing the identity change from an industry figure to a crypto wanted criminal.

Three Arrows Capital’s sudden thunderstorm

Three Arrows Capital suddenly thundered in a series of crises triggered by the collapse of Terra. As an encrypted hedge fund founded by Su Zhu and Kyle Davies, it was established in 2012 by 3AC Near A few years can be said to be prosperous.

Especially with the huge bets on GBTC, Avalanche, Terra, and Su Zhu's social platform about The high-profile debate between Ethereum and the new public chain once attracted the attention of the entire industry.

But after the collapse of the Terra empire in May, the cryptocurrency brokerage at the end of June Voyager Digital suddenly announced that 3AC has issued a notice of default through its operating subsidiary Voyager Digital LLC because it failed to repay 15,250 bitcoins and 350 million USDC loans on time.

This incident completely lifted the lid on the 3AC incident. In early July, 3AC representatives applied to the New York court for bankruptcy protection under Chapter 15 of the US Bankruptcy Code.

04 Summary

There is nothing new under the sun. The former genius trader and DeFi whale became an industry villain overnight. The once too big public chain ecology and stable empire quickly collapsed within a week.

Although these crises have triggered a liquidity trap in the industry to a certain extent, and may even lead to stricter and more negative regulatory responses, the risks exposed may not be Good thing, at least it will slowly increase the robustness of the system.

There is no myth in the encrypted world, breaking the obsession with giant whales, disenchanting institutions, may be the dark thread hidden during the period.