Sinking Crypto Institutions Shut Down Again

Crypto organizations that caused many crypto crises and went bankrupt in the past are trying to enter the sector with new projects in this period.

The cyclical progress of the cryptocurrency market brings with it many consequences. In the so-called bear market, bankruptcies and major crypto crises occur. But during the bull market cycle, cryptocurrencies appear to be in high demand and growing financially.

Crypto organizations, which could not hold on between all these cycles and became history, have been working hard to re-enter the sector recently. Companies like Three Arrows Capital and FTX continue to work with thought again and again.

Sinking Crypto Organizations: Crypto Again!

The bear cycle of the cryptocurrency market has often come with the havoc created by the actors within the industry. As external factors, the USA, China or interest rate decisions can also be effective. However, crypto actors appear to be the most important factor influencing the bear market with billions of dollars of damage. So, how are these actors in the industry now?

1- FTX: Again

Cryptocurrency exchange FTX was on the agenda with its bankruptcy, which caused tens of billions of dollars of assets to evaporate. The chain of events, in which founder Sam Bankman-Fried faced heavy accusations, still continues on the legal side. FTX’s bankruptcy started with a tweet from Binance CEO CZ. However, it had been secretly on the brink of bankruptcy before. The beginning of all these processes was FTX’s use of client assets.

Sam Bankman Fried, who loves leveraged trading, and Caroline Ellison, CEO of Alameda Research, traded with clients’ multimillion-dollar assets. However, the market, which collapsed with the Terra crisis, also failed FTX’s plans. The organization, which lost its assets, came to the brink of bankruptcy.

Users who wanted to withdraw their assets in FTX in panic after CZ’s tweet revealed a liquidity problem in the stock market. The stock market, which melted its customer assets, could not respond to the withdrawal transactions and entered the bankruptcy process. In the ensuing process, lawsuits came one after another for Sam Bankman-Fried and Caroline Ellison.

After all these processes, a new CEO was appointed to head FTX. The new CEO stated that FTX will handle the bankruptcy process and restructure with exchange-owned assets. According to media reports recently, FTX is planning to re-enter the crypto industry.

FTX, which caused a major collapse in the crypto money market before, is reviving after nearly a year and entering the crypto sector. It is not known whether investors will use the stock market with the same confidence again.

2- Founders of Three Arrows Capital Launched a New Project

Crypto startup Three Arrows Capital went into liquidation as it hurt many investors and left a $3.5 billion debt to its creditors. Three Arrows Capital’s creditors included BlockchainCom and Voyager Digital. Voyager fell into bankruptcy immediately after these processes.

The founders of Three Arrows Capital, Zhu and Davies, became the heroes of this great collapse. The collapse of the crypto transactions made by these two and the emergence of problems in credit regulations accelerated the collapse. The market, which entered an unrecoverable downtrend, exacerbated the company’s free-collapse.

Zhu said that the last event that ended Three Arrows Capital was the fall of Bitcoin from $30,000 to $20,000. Zhu stated that they did everything they could during the collapse, but they could not prevent the fall. Finally, Zhu brought up that he lost all his money during this period.

After all these processes, Three Arrows Capital was unplugged and its founders remained on the agenda. While the court process of the company, which filed for bankruptcy, continues, a new crypto move came from its founders.

Zhu and Davies, who inflamed the collapse of Three Arrows Capital with their leveraged transactions, are in the sector with a different crypto project this time.

Zhu and Davies set aside their previous failures to open a new cryptocurrency exchange. The name of this crypto exchange that was opened was OPNX. In addition, the local token of the exchange, FLEX, was also announced. The new company stated that FLEX will strengthen OPNX as an ecosystem token.

It is a matter of curiosity how much trust this duo can gain with the new company, which has previously suffered a major collapse and victimized thousands of crypto investors.

3- Celsius Returns to the Fields with Asset Sale

Influenced by the downward movement of the crypto money market, Celsius filed for bankruptcy after experiencing a payment crisis for about a month. Celsius, which filed for Chapter 11 bankruptcy, said it had millions of dollars in assets to support its operations.

However, Celsius creditors claimed that the organization failed to meet its payment obligation. The situation, which grew and led to the crisis, turned into a legal struggle.

The crypto company stated that its payment liability after its bankruptcy is between $1 billion and $10 billion. With the effect of the bankruptcy at that time, there were more than 100,000 users affected by Celsius.

Celsius Co-Founder and CEO Alex Mashinsky said filing bankruptcy is a necessary move for the company and the community. Celsius also accompanied Voyager and Three Arrows Csapital in a series of bankruptcies that followed one after the other.

With Celsius going bankrupt, hundreds of thousands of people have suffered directly and indirectly in the crypto industry. But after a long hiatus, Celsius found the strength to come out of bankruptcy with approval in the sale transaction.

The Fahrenheit consortium, formed by venture capital firm Arrington Capital and US Bitcoin Corp, purchased $2 billion in assets from the bankrupt lender.

Celsius described Fahrenheit’s acquisition as a recovery from bankruptcy. According to the court ruling, Fahrenheit will buy the bankrupt company’s portfolio of corporate loans, stock cryptocurrencies, mining unit and other alternative investments.

If this purchase, pending regulatory approval, crosses the final straight, Celsius could begin preparations to complete the bankruptcy process and re-enter the crypto industry. The crisis of an era may appear as the fresh blood of a new era.

4- Voyager Tries to Resurrect

Voyager Digital, which filed for bankruptcy in July 2022, did not survive the Terra crisis. The crypto lender Voyager, which filed a Chapter 11 application, requested debt restructuring.

Going into bankruptcy, the company reported that it has $110 million in assets to support its operations. The Terra crisis and Three Arrows Capital’s default on its debt to Voyager were factors affecting the process.

At the end of this bankruptcy, thousands of Voyager customers were in a difficult situation, and the cryptocurrency market again suffered a huge decline. The fact that the effects of the Terra crisis did not pass can be attributed to the chain of bankruptcies that followed.

The company, which was in a difficult situation and worked hard to get out of the bankruptcy process, was hopeful when FTX sat on the table. FTX has made a $1 billion offer to buy assets owned by Voyager Digital. It was noteworthy that FTX also opened the bankruptcy flag until this proposal, which went to the bankruptcy court, went through the approval process.

Voyager, which was wasted by the bankruptcy of FTX, took its breath in Binance. Binance has stated that it wants to buy assets owned by Voyager with an offer of over $1 billion.

This proposal, which came to the last level and was approved by the court, entered a turbulent period with the opposition of the US authorities. Binance announced that it was withdrawing from the Voyager deal after many problems.

Voyager, which would recover after the possible sale, would pay off its debts to its customers and re-enter the crypto industry. However, the company has yet to find a buyer.

Nevertheless, the crypto credit institution continues its preparations to enter the crypto industry again. In addition, VGX, the official token of Voyager, still continues to attract customers by being listed on many exchanges. Although the ethical situation is discussed, the company’s bond in the crypto sector is not broken.

5- Bitcoin Miner Core Scientific Could Come Out of Bankruptcy

The collapse of the cryptocurrency market also affected Bitcoin mining companies. Many companies filed for bankruptcy, citing that they were going through difficult processes.

Core Scientific, one of the powerful Bitcoin mining companies, has filed for bankruptcy in the US. Core Scientific, which is publicly traded on the popular US stock exchange Nasdaq, created a bombshell effect with its bankruptcy.

The cryptocurrency market has had a tough time with the Terra crisis, the bankruptcy of FTX, and the subsequent collapse of mining companies. Core Scientific, which is among the 15 largest crypto mining companies in the world, could not survive and declared bankruptcy.

The bankruptcy filing cited the sharp declines in the crypto market and the rise in energy costs. The market value of the mining company had reached 3 billion dollars at one time. The crypto crashes have reduced the value of the mining company to $ 100 million.

Core Scientific was also affected by Celsius’ bankruptcy. The deals and services between Core and Celsius have been rough. The two still continue their legal fight.

This bankruptcy, which also hit the mining industry, fueled the troubled days for Bitcoin. Thousands of crypto investors were victims of this situation and suffered a lot of damage.

Currently, Core Scientific states that it wants to exit the bankruptcy process and liquidity conditions have improved. The mining company continues its preparations to exit the bankruptcy process and return to the industry.

It is thought that the company will generate millions of dollars in revenues due to the positive crypto market. Therefore, the mining company is making plans to get back on its feet, relying on its accumulated and future revenues.

Even though Core returns to the industry, it leaves a question mark on whether it can attract customers as before.