2022 saw a chain of failures among crypto companies. None of them was a failure of Bitcoin's protocol; all of them were failures of trust in middlemen.
Celsius
The lender marketed itself as the "safest place for your crypto". It halted withdrawals on 12 June 2022, leaving customers with $4.7 billion in inaccessible assets, and filed for bankruptcy on 13 July 2022. Founder Alex Mashinsky was sentenced to 12 years in prison on 8 May 2025 for fraud and market manipulation, according to the US Department of Justice.
FTX
FTX founder Sam Bankman-Fried told customers their deposits were held safely and separately. In fact, prosecutors showed, billions were channelled to his trading firm Alameda Research. He was convicted on seven counts and on 28 March 2024 sentenced to 25 years in prison.
The pattern
- Customers held IOUs, not bitcoin.
- Firms promised yield or safety they could not deliver.
- Nobody could check the books until it was too late.
Bitcoin's answer
A Bitcoin full node lets anyone verify every coin; a self-custody wallet means nobody can lend out your coins. proof of reserves helps, but holding your own keys removes the need to trust at all.