The 2022 Crypto Winter was undoubtedly the darkest time in cryptography history. billions of dollars of market value evaporated while the industry-wide future lies in threads.
Many players who contributed to the severe recession today remain in jail, awaiting sentences or continuing to pay off their debts.
Winter strolling your teeth
The infamous Crypto Winter began to unfold in early 2022 and collapsed due to many factors that were strengthened throughout the year.
Still shaking from the Covid-19 pandemic, the global economy faced key challenges, including rising inflation, rising interest rates and the fear of a widespread recession. These economic headwinds have created a challenging environment for the cryptocurrency market and contributed to its slump.
Beyond these broader economic pressures, certain events within the crypto market have intensified the slump and led to a widespread crisis across the industry. Among the most notable events were the collapse of FTX and Terra-Luna, the default for Three Arrows Capital, and bankruptcy of major crypto lending platforms.
These notable failures and suspicious scams have permanently linked multiple individuals, including Sambank Manfried, Caroline Ellison, Dokwon, and Alex Masski.
Three years later, the crypto industry has achieved a major recovery and perhaps a firm look at that challenging era in the past. However, the person in charge is still dealing with the impact. Where are they now?
Sambankmanfried (FTX Exchange)
Sam Bankman-Fried (SBF), founder and former CEO of FTX Exchange, has sentenced him to 25 years in a federal prison in California. A recent report shows that SBF could be sentenced to prison for more than four years for good conduct credits and potential participation in prison programs. If that happens, he will be released by 2044.
In late 2023, SBF was convicted of fraud and conspiracy to organize a scheme that misused billions of dollars in FTX customer funds.
FTX, which filed for Chapter 11 bankruptcy in 2022, is approaching its conclusion. The process was incredibly successful, recovering more than $14.5 billion in assets. In May, FTX announced it expects it will be able to pay 100% of its bankruptcy claims and interest to non-government creditors.
Caroline Ellison (Alameda Research)
Caroline Ellison is the CEO of Alameda Research, a quantitative crypto trading company founded by SBF, and is closely linked to FTX. She is currently sentenced to two years in prison for her role in fraud.
Ellison began his sentence in early November 2024 at Connecticut’s low-security federal prison. She was sentenced to a significantly reduced sentence for extensive cooperation with authorities, including testimony against Sam Bankman Fried at his trial. Like Bankman-Fried, her sentences have recently been shortened for several months for good behavior.
The Alameda study was the main destination for misused FTX customer funds. FTX reportedly led billions of dollars to trading companies to cover their debts and fund their activities. Like FTX, Alameda Research filed for bankruptcy in 2022 and is no longer an active trading company.
The remaining assets are currently part of a larger FTX bankruptcy proceeding.
do kwon (Terraform Labs)
Do Kwon, co-founder of Terraform Labs, is awaiting trial in May 2022 for the devastating collapse of the companies Stablecoin Terrausd and Sister Token Luna.
Authorities arrested him in Montenegro in March 2023 using forged travel documents. After numerous legal battles, Do Kwon was extradited to the United States in December 2024 to face federal criminal charges.
Upon entering the United States, the Federal Jury charged him with multiple felony counts including securities, goods, wire fraud, conspiracy and money laundering. Do Kwon pleaded not guilty to all charges. His criminal trial in New York District Court is scheduled to begin in January 2026.
Last year, the US Securities and Exchange Commission (SEC) discovered that Do Kwon and Terraform Labs were liable for civil fraud. They have tentatively agreed to a settlement with the SEC, including substantial financial penalties. The settlement effectively banned Kwon and Terraform in the securities industry.
Meanwhile, Terraform Labs filed for bankruptcy in January 2024 and is currently under liquidation. This process involves selling remaining assets to fulfill your financial obligations and settling any outstanding claims.
Alex Maski (Celsius)
Alex Mashinsky, former CEO of Celsius Network, is serving a 12-year federal prison sentence after pleading guilty to merchandise and securities fraud. Following the ruling last May, he also faces three years of supervised release, a $50,000 fine and a confiscation of illegal revenue of $48.4 million.
The Celsius Network has promised high interest rates on crypto deposits, but the machine ski security guarantees have turned out to be false. The platform engaged in risky, private investments, including private loans. Machine Ski was also accused of inflated the price of Celsius tokens (CELs) and personally profiting from the sale.
As the crypto market declined in mid-2022, Celsius frozen the withdrawal of all customers on June 12th, locking in billions. A month later, he filed for Chapter 11 bankruptcy, deepening the impact of code winter.
Celsius has since emerged from bankruptcy and is restructuring its operations. Ionic Digital, Inc. is now a new Bitcoin mining company. has begun distribution of more than $3 billion to creditors who co-own. It also pursues a $4 billion lawsuit against Tether over allegations of inappropriate liquidation of Bitcoin collateral during the collapse.
Su Zhu and Kyle Davies (Three Arrows Capital)
Su Zhu and Kyle Davies, co-founders of the once-famous Crypto Hedge Fund Three Arrows Capital (3AC), are still caught up in legal disputes.
Zhu was arrested in Singapore in September 2023 for a courtroom light empty and sentenced to four months in prison before being released, but the appeal against the court’s summon continues. Davis mostly avoided liquidators. Both founders face a nine-year ban from Singapore’s financial regulators.
3AC’s aggressive and highly utilized trading strategies and significant exposure to the Terra ecosystem proved disastrous. When Terrausd lost hair and Luna crashed in May 2022, 3AC suffered massive losses and failed margin calls from numerous lenders.
This bankruptcy and subsequent liquidation in June 2022 produced significant contagion effects, causing great distress to the crypto lending platform that was heavily loaned to 3AC, and solidified its role as a major catalyst for the 2022 crypto winter.
3AC remains liquidation and is administered by a court-appointed liquidator. They aim to recover the assets of creditors that have collected more than $3.5 billion in claims.
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