2022 has been a bumpy year for the crypto industry. For many people, it has been one of the most difficult they have experienced since investing in crypto. Following the meteoric success of 2021, some of the sector's most prominent players fell in 2022.
Let’s look at some of the most significant events of the past 12 months and what they could mean for the industry and job market moving forward.
Luna collapse, May 2022
The collapse of Luna Terra’s stablecoin, UST, caused shockwaves across the industry. Luna’s attempt to re-peg the stablecoin to UST to its one-dollar peg subsequently caused LUNA's price to collapse.
3AC Celsius collapse, June 2022
The LUNA collapse led to a liquidity crisis for many institutional players. Many entities, including 3AC and Celsius, had been overleveraged. And following the LUNA collapse, they became illiquid and unable to pay their debts. This led many funds and investors to file for bankruptcy.
Tornado Cash sanctions, August 2022
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) unexpectedly sanctioned the cryptocurrency mixer Tornado Cash. The mixer was often used as a privacy tool for both cyber criminals and average users. However, the sanctions were implemented due to concerns from OFAC that North Korea was utilising the tool to launder money earned from cybercrime
Ethereum Merge, September 2022
Perhaps the year's most anticipated event, the Ethereum “Merge” event, was successfully implemented. However, not everyone was as joyful as the cryptocurrency community. The SEC stated that staking-based cryptocurrencies are like securities. So far, no action has been taken by the SEC, but legal action against the world's second-biggest blockchain is not yet out of the question.
FTX collapse, November 2022
Following the collapse of other major institutional players, FTX and its sister company Almeda also fell, possibly in the most dramatic fashion. The details behind the collapse are still being released, but the cause may be down to some very irresponsible decision-making from the company's leaders.
Announcement for a vote on adopting the MiCA regulations at “EU level” , December 2022
The MiCA bill has continued to progress over the past 12 months, and now it is said that the EU parliament will vote on whether to implement it at the EU level. The bill is expected to drive a lot of new investment and talent into the industry because cryptocurrency regulation will finally have some certainty.
SEC Vs Ripple case nears the end
Ripple filed their final motion document to end the two-yearlong lawsuit. The verdict is likely to be decided by March 2023.
Although the case is going in Ripple's favour, the SEC is not slowing down and already has its eye on other cryptocurrency projects.
What this means for 2023
2022 has been a year where both the general public and authorities have lost faith in the cryptocurrency industry.
Governments and regulatory bodies have begun claiming that more regulation is needed to control the industry.
Also, many of the leaders of collapsed projects, such as Do Kwon, Sam Bankman-Fried and Zhu Su, are currently under a lot of scrutinies. Or, in Do Kwon's case, on the Interpol wanted list!
We can expect more regulatory frameworks in the US, Asia and Africa. And in Europe, the MiCA bill may be pushed forward to prevent further damage to the industry.
So far, the blockchain industry is still in its infancy, with little regulation or demand for legal expertise. But with its explosion in popularity over the past two years and more recently increased interest from regulators, a new sub-industry may be about to experience a bull market: The crypto legal sector.