Major Event Analysis: Security Incidents and Crises

Crisis events in blockchain development

Frequently Asked Questions

What happened to Mt. Gox?

Mt. Gox, once handling over 70% of all Bitcoin transactions, filed for bankruptcy in February 2014 after revealing that approximately 850,000 BTC (worth ~$450 million at the time) had been stolen through a prolonged hack. CEO Mark Karpeles was later arrested, and creditor repayments began a decade later in 2024.

How did Terra/Luna collapse?

In May 2022, the algorithmic stablecoin UST lost its dollar peg, triggering a death spiral with its paired token LUNA. Within days, approximately $40 billion in market value was wiped out. The collapse cascaded across the industry, taking down Three Arrows Capital, Celsius, and Voyager.

What caused the FTX bankruptcy?

FTX collapsed in November 2022 after a CoinDesk report revealed that Alameda Research (FTX's sister trading firm) held billions in illiquid FTT tokens as collateral. A Binance-triggered bank run exposed that FTX had secretly used customer deposits, leading to its Chapter 11 bankruptcy filing.

What were the cascading effects of the 2022 crypto credit crisis?

The 2022 crisis began with Terra/Luna's collapse in May, which exposed over-leveraged firms like Three Arrows Capital. Its insolvency cascaded to lenders Celsius, Voyager, and BlockFi, culminating in FTX's bankruptcy in November. Over $2 trillion in total crypto market value was lost during 2022.

What lessons did the industry learn from these crises?

Major crypto crises accelerated calls for proof-of-reserves, regulatory oversight, and separation of exchange and custody functions. They demonstrated the dangers of opaque centralized platforms and ultimately strengthened the case for transparent, decentralized protocols.