Santas and Grinches: The crypto heroes and villains of 2022

Here is a list of the 12 people who had the most impact on the crypto industry this year, for better or worse.

From the outside, 2022 has been a wild ride for cryptocurrency. During the 2021 bull market, the market reached a total valuation of $3 trillion, only to fall back to its current level of around $810 billion. While the sector’s poor performance can be attributed to a variety of factors, including the pervasive macroeconomic environment, rising inflation rates, and the ongoing Ukraine-Russia conflict, one cannot deny the role that the recent spate of insolvencies has played.

That being said, here is a list of some of the most notable heroes and villains who have had an undeniable impact on this rapidly evolving industry in the last year.

At a time when some of the most powerful players in cryptocurrency were collapsing, Changpeng Zhao, also known as “CZ,” ensured that his Binance crypto exchange held its own, even playing a role in the demise of its closest rival, FTX.

CZ has refused to bind the crypto exchange to a single or multiple regulatory frameworks. As a result, governments around the world are skeptical of Binance’s approach and have repeatedly pressed the exchange with regulatory requests. Nonetheless, despite the ongoing pressure, Binance has grown in influence and stature. Despite a harsh crypto winter in which layoffs were common, CZ claims to have made no major layoffs, and the exchange even plans to hire more people in the near future.

Finally, CZ’s digital presence has grown in the last year, with a global Twitter following of over 8 million. Furthermore, the Canadian entrepreneur recently announced a $500 million investment in Twitter.

Coinbase CEO Brian Armstrong has had an up and down year, with the company laying off several employees and experiencing a significant drop in its stock price. Despite the setbacks, he has maintained a positive attitude. Armstrong has been a vocal critic of the United States Securities and Exchange Commission and its chairman, Gary Gensler, throughout the year, claiming that the SEC has stifled innovation by requiring crypto entities to adhere to stringent reporting requirements. He was also critical of the US Department of Treasury’s sanctions against Tornado Cash’s smart contract addresses, pledging to fund a lawsuit to overturn the government’s actions.

Armstrong’s dedication to decentralization and transparency was on full display earlier this year, when he announced that Coinbase would rather stop offering Ether staking services than censor sanctioned Ethereum transactions.

While some lawmakers remain unconcerned about the crypto market, Senators Cynthia Lummis and Kirsten Gillibrand have spent time learning about the true financial and social potential of this rapidly maturing technology.

Earlier this year, the pro-crypto duo introduced the Lummis-Gillibrand Responsible Financial Innovation Act, which proposed a comprehensive framework for digital currency governance. In response to the SEC’s lack of clarity in the space, the bill divides cryptocurrencies into three categories: commodities, securities, and ancillary assets.

The bill specifies that cryptocurrencies classified as commodities should be regulated by the Commodity Futures Trading Commission, with the Securities and Exchange Commission in charge of securities and ancillary assets.

Representative Tom Emmer is another legislator who has expressed strong support for the crypto industry over the last year. The politician recently criticized SEC Chair Gary Gensler’s crypto oversight strategy as “indiscriminate and inconsistent.” Furthermore, he revealed that he has been approached since January by the heads of several prominent crypto entities who have complained to him that Gensler’s reporting requirements are onerous and unfair, calling them unnecessary and biased against the crypto market.

It’s probably time to reintroduce my bipartisan Blockchain Regulatory Certainty Act.

The bill declares that blockchain entities that never hold consumer funds are not money transmitters, thereby providing the legal certainty required to ensure that the future of cryptocurrency reflects American values.

Emmer recently tweeted that Gensler should testify before Congress and explain his criticized regulatory approach. “He [Gensler] refused to provide Congress with the information requested in the letter, which would’ve informed Congress of the apparent inconsistencies in Gensler’s approach that caused him to miss Terra/Luna, Celsius, Voyager, and FTX,” he added.

After years of delays, Ethereum’s long-awaited transition to a proof-of-stake consensus layer was completed earlier this year. The Merge was the first time a project the size of Ethereum successfully completed a technical maneuver of this magnitude.

Over 100 developers worked together to make the network’s transition from the energy-intensive proof-of-work consensus layer to proof-of-stake a smooth one.

This name should come as no surprise. Former FTX CEO Sam Bankman-Fried was recently at the helm of one of the largest crypto collapses in recent memory. The MIT graduate is said to have been unaware of the inner workings of FTX’s relationship with Alameda Research, a sister company run by his close associate Caroline Ellison.

Bankman-future Friend’s has been uncertain since his arrest by Bahamian authorities on December 12. Many people want him and close associates like Sam Trabucco, Gary Wang, Constance Wang, and Nishad Singh to be held accountable for their alleged crimes. On December 22, Bankman-Fried was extradited to the United States and released on a $250 million bail bond. Many pundits have speculated on his future and whether SBF will now spend the rest of his days in prison, possibly alongside many of his close associates.

Do Kwon, co-founder of Terra, a blockchain platform designed to improve payment efficiency, is also on the list. TerraUSD (UST), Terra’s algorithmic stablecoin, attracted 40 million users upon its launch, with the project raising $32 million from investors including Arrington XRP Capital and Polychain Capital. It also received backing from well-known companies such as Korean ticketing firm Ticket Monster and travel operator Yanolja.

Following Terra’s demise, the crypto market lost $45 billion in capital in just seven days. The crash is estimated to have affected over 200,000 South Korean investors, prompting several groups to file a class-action lawsuit against Kwon. The South Korean government recently revealed that criminal charges are being pursued against Kwon, and similar lawsuits have been filed against him in the United States and Singapore.

1/ Terra governance prop #1623 is now live, renaming the existing network Terra Classic, LUNA Classic ($LUNC), and rebirthing a new Terra blockchain & LUNA ($LUNA).

The Seoul Southern District Prosecutors’ Office announced in September that it had begun proceedings to revoke Kwon’s passport and place his name on Interpol’s red notice list. Despite the gravity of the situation, the Terra co-founder appears to be making little to no attempt to avoid detection.

Su Zhu and Kyle Davies founded Three Arrows Capital (3AC) in 2012. It reportedly had $18 billion in assets prior to its demise. Nansen, a blockchain analytics firm, estimated that 3AC managed about $10 billion in cryptocurrency alone in March. However, speculation about uncollateralized borrowing began as early as the first quarter of 2022.