You Think FTX Was Bad? Investors Suffered Far Greater Losses From Terra: Report
By Benzinga
The collapse of cryptocurrency exchange FTX (CRYPTO: FTT) has not been the biggest concern for investors this year.
Recall the de-pegging of Terra’s (CRYPTO: USTC) token and the collapse a few weeks later of Celsius and Three Arrows Capital (3AC) — investors suffered much bigger losses in those two scenarios.
Investors lost $20.5 billion in the case of UST and a whopping $33 billion in the case of Celsius and 3AC, versus just $9 billion for FTX, according to a Chainalysis report.
Also read: Analysis – Will Binance Succumb To Crypto Market Fears?
In May, Terra's UST lost its peg and eventually collapsed. The implosion of Three Arrows Capital in July and the bankruptcy petition by Celsius were both caused by a chain reaction that started with UST’s collapse.
After allegedly misusing consumer funds, FTX later faced a liquidity crisis and filed for Chapter 11 bankruptcy protection in November.
Sam Bankman-Fried, the former CEO, was later arrested in The Bahamas for alleged fraud.
FTX Fraud Affected People On A Personal Level
FTX was the event that affected people the most on a personal level since they are "likely to lose any funds they kept on the exchange, and the likelihood of recovering them is unknown," Chainalysis reported.
From a market-wide perspective, "the heaviest-hitting crypto events of 2022 were already behind investors by the time the FTX debacle took place."
Chainalysis measurement of realized gains and losses for a set of personal wallets over a specific time period gives investors a directional sense of when they lock in gains and losses.
