Chainalysis data reveals FTX collapse caused $9B in realized losses Chainalysis data reveals FTX collapse caused $9B in realized losses
Chainalysis said the market suffered bigger losses when Terra UST depegged and Celsius collapsed.
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Updated: Dec. 15, 2022 at 1:02 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
FTX’s collapse resulted in around $9 billion in realized losses for crypto investors, according to a Chainalysis report.
Chainalysis noted that this loss paled compared to Terra’s UST depeg, which caused a loss of $20.5 billion. The implosion of crypto firms like Celsius and Three Arrows Capitals led to $33 billion in realized losses.
According to Chainalysis, weekly realized loss and gain are calculated based on the value of assets in a wallet at the time they were acquired minus the value of the portion of the assets transferred from the wallet at the time of recording the data.
While the transfer of assets from a wallet does not necessarily imply a sale, it gives an insight into how those events affected investors. The data shows that many investors had already lost significantly more value before the FTX crash.
However, the data does not account for those who lost their deposits on the FTX exchange.
CryptoSlate reported that realized Bitcoin (BTC) losses reached a yearly high of $4.3 billion following FTX’s collapse.
Reports revealed that over one million creditors were affected by the FTX collapse, with at least $8 billion in missing funds. The crypto exchange founder Sam Bankman-Fried was arrested in the Bahamas and faced criminal charges in the United States.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Terra Classic
$0.00010
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems.
Chainalysis
Chainalysis builds trust in blockchains between people, businesses and governments.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Celsius Network
Celsius Network is a bankrupt cryptocurrency lending company that was founded in 2017 and headquartered in Hoboken, New Jersey.
Three Arrows Capital
Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, collapsed due to poor risk management, recklessness in dealing with business partners and a significant portion of greed.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
