FED Reveals: How Millions of Crypto Investors Lost $46 Billion in 5 Months

Research conducted by the US Federal Reserve (FED), Last year, the negative effects of bankruptcy in cryptocurrency companies were included.

The Chicago branch of the Fed shared a report as a result of the bankruptcy investigation of cryptocurrency companies. The report will be published in 2022. within 5 months in general 4.3 million cryptocurrency user a loss of 46 billion dollars He showed that he did. In that report, like he is chained it happened somehow The traveler, Celsius, FTX, land (MOON), Three Arrows Capital (3AC), BlockFi And of Genesis bankruptcy was explained in detail.

In the first act of bankruptcy of the chain The traveler And Celsius TerraUSD (TUSD) It is said that he was defeated by the collapse of the bank and the bankruptcy of the hedge fund 3AC. The Chicago Fed said that these institutions lend money to 3AC but do not interfere with their loans. In the report, BlockFi and Genesis FTX for he was drowned shown.

In addition, the FED announced that many of these institutions offer a profit to their users, but this business model is not long-term.

Typically, interest yields of 7.4% to 9%, sometimes up to 17% were offered. All this was not true in the low interest rate environment.

On the other hand, most of these companies two stage bankruptcy While it is stated that they met face to face, most of them successfully passed the first step It was emphasized that they could not stand the second stage:

Both Celsius and Voyager survived the first run, but were defeated by the second wave. Both Celsius and Voyager have double bank runs. The second sinkholes were smaller, but by then their balance was so weak that they went bankrupt.

Small investors suffered the most

Chicago Fed, rapid withdrawal of large institutional investors’ money from sinking stock markets Small actors He insisted that he was in a difficult situation. Especially institutions and 500 thousand dollars The report said that investors with assets were the first to leave the ship, and that this situation burned the small investors.

Exactly Celsius assets released during bankruptcy 35%’get off more than 1 million dollars It was emphasized that it was done with accounts with investments.

While the platforms had a large number of retail clients, large owners, some of whom were high-profile institutional clients, led the activities. Larger account holders with more than $500,000 in investments were the fastest to withdraw, drawing their money proportionately. According to our estimates, 35% of all withdrawals, especially in Celsius, were made by account holders with investments of more than $1 million during this period.