Top Crypto L's of 2022
159: Arbitrage Andy's Top 10 Crypto L Holders
Top Crypto L Takers of 2022
We wanted to introduce a little bit of humor to Arb Letter amid all of the dark macro developments and lizard people attempts to control humanity.
2022 was a wild year for bull markets in general but particularly for crypto as markets came crashing down and Fed Policy squeezed most of the leverage from the system, ruining retail and institutional traders and investors alike.
Estimates from Forbes show that the bear market and bankruptcy wave in the crypto sector resulted in a $116 billion loss for founders and investors over the past nine months. Former titans of industry and crypto billionaires were reduced to virtually nothing overnight.
The following is a collection of some of the individuals and companies who took the absolute biggest L’s (losses) in 2022. Some represent the dredges of society and others are likely entrepreneurs who got a little too comfortable and pulled an Icarus.
We have ten members of the 2022 Worst Crypto L competition in no particular order for you to today detailing their losses, ironic quotes of the past, and a quick synopsis of ho down bad they all became in 2022. We look forward to seeing how things progress in 2023 so that we can have another fresh list to tote come 2024.
We compiled 10 of the top L takers in 2022 within the crypto space.
We will recap some of the glorious fireballs and implosions we witnessed towards the end of the great bull run we all saw coincide with a massive run in all assets during Covid.
*We’ve taken steps to proofread our work so you all don’t think monkeys are writing this but we wrote today’s piece on a moving train. So please understand we may have missed or fat fingered some words.
1. Sam Bankman Fried - “The New Madoff”
TOTAL CUSTOMER LOSSES - $8,000,000,000
BEST QUOTE - “I think I got a little cocky — I mean, more than a little bit”
This goblin needs no introduction and is now a household name alongside Bernie Madoff and other historical ponzi figures. Though this elusive salamander takes the cake for one of the most insidious and peculiar crypto villains of all time.
He essentially EVAPORATED over $8 Billion in customer funds in under 48 hours. Just absolutely Manhattan Project-ed it into the depths of hell and eviscerated it into a fiery pit of doom.
It was unfortunate to say the least given FTX was one of the largest cryptocurrency exchanges in the world and its founder Sam Bankman-Fried was considered the savior of the crypto industry.
In retrospect this all could have been avoided had people used cold storage, but once again the glamour and hype of a bull market will always cloud people’s judgement. This man fooled countless institutional investors and veteran money managers with a charade of vague idealism, laid back culture, and seemingly endless fraud.
A 10-person “cabal of roommates” lived in a luxurious Bahamas Penthouse where tens of thousands were spent on delivery items, orgies were had, and drugs taken.
After being apprehended by officials in the Bahamas justice has accelerated quickly.
SBF has since pleaded not guilty to several charges listed in a federal indictment. According to the New York Post and recent legal updates, if convicted, Sam Bankman-Fried, who was freed on $250 million bond, faces up to 115 years in prison. Going to be hard pressed to find that elusive altruism in prison man.
SBF is the god of crypto fraud.
2. Caroline Ellison - “The Glizzy Grippy Goblin”
TOTAL CUSTOMER LOSSES - $8,000,000,000
BEST QUOTE - “We tend to not have things like… stop losses”
Another goblin creature of sorts, Caroline Ellison was one of the matriarchs of the office in the Bahamas. Her and Sam both worked at Jane Street.
She was said to have performed aggressive fellatio on employees to boost morale. Tom Brady on the evening of signing the FTX endorsement deal was seen getting close with Ellison on a small Bahamas beachside bar. Just playing LOL, but she did do some weird ass stuff.
Before joining Alameda as a trader in March 2018, Ellison spent 19 months as a junior trader at Jane Street after graduating from Stanford University (efinancialcareers).
Known for her pill-popping, love of BDSM, weird sexual preferences for things called polycules and harams, and her obsession with Harry Potter, this swamp donkey was the CEO of Alameda Research, the hedge fund founded within FTX itself. She had a romantic relationship with colleague and king goblin Sam Bankman-Fried.
Of course it was being funded by money that customers had deposited in FTX for their own trading purposes. Absolute ponzi stuff lol.
The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) charged her saying Ellison manipulated the price of FTT, an exchange token issued by FTX, at exchange founder Sam Bankman-Fried's direction.
Ellison pleaded recently pled guilty in the Southern District of New York to a number of charges including:
conspiracy to commit wire fraud on customers of FTX
conspiracy to commit wire fraud on lenders of Alameda Research
wire fraud on lenders of Alameda Research, conspiracy to commit commodities fraud, conspiracy to commit securities fraud
conspiracy to commit money laundering
3 - Do Kwon - “Daddy DoDo”
TOTAL CUSTOMER LOSSES - $40,000,000,000
BEST QUOTE - “Yeah but your size is not size"
One of the first major victims o'f the crypto bear market correction was a crypto space big figure for some time.
Kwon Do-Hyung also known by his nickname Do Kwon was is the South Korean co-founder and CEO of Singapore-based Terraform Labs. The 31-year-old studied computer science at Stanford University.
Unfortunately crypto bear markets show absolutely no mercy and Do Kwon’s undoing was long and drawn out but then all at once. The crypto pioneer showed us all that he was a bit too cocky for his own good, evidenced by his taunting opponents, trolling people on Twitter, and just generally be a smug little weasel.
Do Kwon claimed he lost nearly all his wealth in Terra-Luna crash. The crypto ecosystem collapsed in a $40 billion wipeout in May, and he told the Wall Street Journal that he lost almost all his net worth in the crash.
The rapid fall of Terra-Luna in a matter of days starting from May 7, 2022 led to the value of the Luna token plummeting from around $120 to zero in a very short amount of time.
This caused losses to over a quarter million investors just in South Korea, with many reporting that their life savings were gone. People killed themselves. Additionally, thousands of individuals worldwide had invested in the project on a large level.
According to Forkast, Kwon, who is known for his commentary on Twitter, has not shown any activity on the social media platform since Dec. 11. The dude has basically pulled a Jason Bourne and disappeared amid threats to his life and some visitors to his home in Korea. Kwon has stated that South Korea’s charges against him were “baseless” and “highly political” in nature
At the moment Do Kwon is reportedly living in some city in Serbia. That’s with an Interpol “Red Notice” out right now for his arrest in addition to prosecutors in Seoul charging him with fraud.