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Crypto Review 2023: What Happened to Crypto and Bitcoin in 2023
There is much more to the world of cryptocurrencies than just the price of Bitcoin that day. 2023 marked seismic shifts in the blockchain space, as US regulators put tech billionaires to work while India became a major adopter of cryptocurrencies, setting the stage for what could be a drama-filled 2024 legal and conflicts.
Here are just five compelling sagas that have unfolded in the blockchain industry this year:
The FTX saga comes to an end (almost)
Cryptocurrency exchange FTX run by eccentric, long-haired billionaire Sam Bankman-Fried, known for his luxurious lifestyle and multimillion-dollar political donations, collapsed in November 2022. Nearly a year later, the former CEO was convicted of seven criminal charges related to fraud and money launderingas it was learned that FTX client funds were misused to support a sister company called Alameda Research.
During legal proceedings that have stretched into this year, Bankman-Fried’s former colleagues, including a former romantic partner, testified that she knowingly broke laws and issued orders that harmed her clients. Bankman-Fried’s court appearances during the trial were chaotic, he was jailed for witness tampering and he presented himself as a businessman disillusioned with his officials rather than a malicious crypto criminal.
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His sentencing is set for March 2024 and could see him spend decades in prison. Meanwhile, FTX debtors and liquidators in December agreed to a global settlement to help customers recover some of their assets.
Binance’s billionaire CEO resigns
Chinese-born Canadian tycoon and billionaire Changpeng Zhao was known as the head of Binance, the world’s largest cryptocurrency exchange. Binance has halted operations in several countries in the past due to regulatory crackdowns, but this year the exchange agreed to pay a massive compensation of around $4 billion to the US government in late November for its illegal activities . On top of that, Zhao pleaded guilty to a crime related to his failure to prevent money laundering on Binance and resigned as CEO.
US Treasury Secretary Janet Yellen said Binance allowed more than 100,000 transactions violating US sanctions, including those linked to Hamas’ al-Qassam Brigades, al-Qaeda and even perpetrators of sexual abuse. The cryptocurrency exchange will be monitored as it is forced to formally exit the US market.
Zhao’s influence in the industry is undeniable; his tweets critical of FTX’s trading practices in 2022 are credited with sparking mass panic where all users tried to withdraw their funds from FTX, hastening the collapse of the exchange. Zhao’s sentencing is expected to take place in the United States next February.
Formal launch of Worldcoin
OpenAI CEO Sam Altman was a controversial figure in the crypto community long before he became a major player in generative AI this year. His blockchain project, Worldcoin, aims to create a biometric database of the human population in exchange for access to cryptocurrencies and a digital ID that has been compared to India’s Aadhaar number. The initiative has been severely criticized by privacy advocatesincluding Edward Snowden, during his trial in 2021. Altman this May raised $115 million for the project, whose crypto tokens are not available to users based in the United States.
As OpenAI’s ChatGPT sparked an AI boom and Altman flew around the world to discuss AI regulation with state leaders and top technologists, he formally launched Worldcoin. “Operators” around the world have started collecting millions of iris scans by offering people the Worldcoin cryptocurrency in exchange. Worldcoin has also penetrated India, with “orbit operators” in cities like Delhi and Bangalore encouraging people to get scanned. Activists in countries like Indonesia have accused Worldcoin volunteers of forcing poor people to hand over their biometric data, without obtaining their informed consent.
Worldcoin token prices fluctuated wildly in November this year when Altman was fired as CEO of OpenAI, before being hired by Microsoft and then reinstated at OpenAI.
India leads in grassroots adoption
2023 was another year where India’s popular adoption of cryptocurrencies far outpaced legislation intended to regulate them, as a blockchain analytics platform Chainalysis ranked the country first in its 2023 Global Crypto Adoption Index released in October. Additionally, India ranked second in terms of estimated raw value of cryptocurrencies received between July 2022 and June 2023, recording around $250 billion in cryptocurrencies over the past year. For comparison, the United States saw around $1 trillion in cryptocurrency value over the same period.
However, as grassroots adoption of cryptocurrencies grows, so too does the number of scammers targeting victims who may not be familiar with blockchain technology. In the second half of 2023, Indian authorities have been investigating the Solar Techno Alliance (STA) Ponzi scheme.. The STA crypto scam could be one of India’s biggest so far, as it involved an amount of around ₹1,000 crore and 2 lakh people, according to Odisha Police.
Rise of Bitcoin
From prices below $17,000, Bitcoin [BTC] has seen a slow but significant recovery approaching the $45,000 mark, which it has not yet successfully touched this year. Geopolitical shocks such as Russia’s invasion of Ukraine in 2022 have shaken the sector hard, but 2023 has seen price consolidation and relative stability in what is a naturally volatile market. Bitcoin’s rise has a similar effect on other major crypto coins and tokens, so several popular assets are on an upward trajectory. Of the maximum supply of 21 million Bitcoin, more than 19 million BTC were in circulation at the end of December.
A screenshot showing Bitcoin’s price trajectory over the past year | Photo credit: CoinMarketCap
According to CoinMarketCap statistics, Bitcoin has risen 161.26% over the past year, but the cryptocurrency’s largest coin by market capitalization is far from its 2021 highs, when it surpassed $65,000 in price. The Ethereum ether [ETH]the second largest cryptocurrency by market capitalization, it has grown by 83.54% over the past year.
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