Yes, it’s been an incredible year for crypto. In fact, we’ve written about exactly how good it was here. But there’s no escaping that — where this industry is concerned — scandals and scoundrels thrive in bull markets.
So: pour yourself a stiff drink and settle in for a whistle-stop tour of the worst things that happened in digital assets this year.
El Salvador’s Bitcoin reserves1. El Salvador Ditching Bitcoin as Legal Tender
Bitcoin’s record-breaking surge has vindicated President Nayib Bukele, who caused a stir on the international stage when he announced El Salvador would adopt the cryptocurrency as legal tender.
But despite the country quietly accumulating 1 BTC a day — and accruing over $300 million of unrealized gains in the process — an uncomfortable truth remains: the economy is in dire straits.
Growth is lagging compared with other Central American countries. Extreme poverty is rife. Some Salvadorans live on less than $200 a month. Bukele’s Bitcoin dividend barely covers the country’s needs.
And so, in one of the most significant stories of 2024, the FT revealed that El Salvador is going to perform a U-turn on having BTC as legal tender, in exchange for much-needed loans from the International Monetary Fund.
It’s a huge setback for Bitcoiners who once dreamed this small nation would serve as a trailblazer for other countries considering ditching fiat currencies and switching to crypto.
But it could be worse. For one, very few consumers in El Salvador ever used BTC as a payment method — in fact, many businesses hated it. Bukele’s other pro-crypto policies may also emerge unscathed.
2. The FTX Compensation Debacle
In some ways, the recovery following FTX’s downfall was nothing short of a miracle. After billions of dollars in customer funds was stolen — with victims locked out of their accounts — a bankruptcy team managed to recoup vast sums, with prosecutors bringing its executives to justice.
Yet unfortunately, the repayment plan that’s set to kick off in the new year leaves a bitter taste in the mouths of many creditors.
On one hand, they’ll end up receiving 119% of their account balances — more than what they lost — which is practically unheard of for a bankruptcy of this size.
But on the other, these payouts have been denominated in U.S. dollars, and based on what Bitcoin was worth all the way back in November 2022. Creditors won’t experience the benefits of the bull run in any way.
To make matters worse, some victims ended up selling their claims in private markets for cents on the dollar, meaning they have no chance at all of being made whole (in fiat terms anyway.)
The German government’s Bitcoin balance. Image: Arkham Intelligence3. Aggressive Government Sell-Offs
Earlier this year, the Bitcoin markets were left reeling when Germany ended up offloading vast amounts of crypto seized from criminals — creating extensive selling pressure.
Almost 50,000 BTC seized from a privacy website called Movie2k.to was auctioned off, netting the authorities about $2.8 billion.
But this was at an average per-coin price of $53,000, meaning the country could have more than doubled its money had held on for a few months.
Former finance minister Christian Lindner recently reacted with exasperation — warning lawmakers that Europe’s economic powerhouse was missing out on the opportunities that crypto can bring.
There had been fears that the U.S. would follow with BTC auctions of its own, which have taken place for over 10 years, but this threat appears to be on ice now Donald Trump is making his way back to the White House.
The president-elect has pledged to transform the 200,000 BTC seized from criminals into a strategic Bitcoin reserve.
Image: WazirX4. A Devastating Hack
Indian crypto investors were thrown into turmoil when the local exchange WazirX was hacked for $230 million in July.
A Bengali man has been arrested in connection with the audacious heist, with the analytics firm Elliptic initially linking it to North Korean hackers.
The incident dealt a crushing blow to confidence in the crypto industry, but WazirX’s parent company says it is in a position to make customers whole. Like FTX though, this would be denominated in dollars.
5. The Hawk Tuah Disaster
Haliey Welch became a viral sensation after uttering “Hawk Tuah” into a microphone while on a night out in Tennessee.
And given the explosion in meme coins during 2024, it seemed only inevitable that she would launch her own token.
It was also entirely predictable that the project would end in tears.
HAWK’s market cap ballooned to $490 million after launch — only to crash by 91% within hours.
Welch and her team held a Spaces on X to try and limit the damage, but the recording ended up being deleted after a furious intervention from the on-chain sleuth Coffeezilla.
The stream came to an abrupt halt when Welch declared she was off to bed on December 4. Radio silence followed for weeks after.
6. The Never-Ending Craig Wright Debacle
For years, Craig Wright declared he was Satoshi Nakamoto — and sued anyone who had the temerity to question it.
But in March, a judge in London made it official: Wright isn’t the person who invented Bitcoin.
A group called the Crypto Open Patent Alliance, known as COPA for short, claimed the Australian entrepreneur’s actions stymied Bitcoin’s growth.
The alliance’s lawyer Jonathan Hough told a five-week trial: “On the basis of his dishonest claim to be Satoshi, he has pursued claims he puts at hundreds of billions of dollars, including against numerous private individuals.”
In July, a curt statement on Wright’s website said a court had found him “to have been dishonest in his claims.”
The legal saga hasn’t ended here. Wright later sued COPA for a jaw-dropping £911 billion (yes, $1.14 trillion) in damages — and because of this, he was ordered to attend a contempt of court hearing in London.
But Wright, believed to be in Asia, refused to attend… despite offers for the cost of his travel to be covered.
7. Bitcoin Landfill Guy Fights On
Imagine mining 8,000 BTC all the way back in 2013, when it was worth under $100, and then throwing the hard drive away.
That’s what happened to James Howells, who has never given up in his fight for permission to scour a landfill in Wales.
After repeated refusals from local authorities in Newport (despite offering to split the cash if the disk is found and operational) he’s now decided to file a lawsuit.
Lawyers representing Howells in court argued they have a “finely tuned plan” to track it down, with expert excavators assisting in the case.
Yet the legal team representing Newport Council fired back — and said that, even if he did get permission to go hunting, the hard drive is no longer his property.
Expect more headlines about this next year… and the year after… and the year after.
The post The 7 Worst Crypto Stories of 2024 appeared first on Cryptonews.
