7 BIGGEST CRYPTO COLLAPSES OF 2022 THE INDUSTRY WOULD LIKE TO FORGET

2025 will forever be etched in the crypto history books – not for groundbreaking innovations or soaring prices, but for the devastating collapses that shook the industry to its core.Like a Hollywood disaster movie, the year was filled with unexpected plot twists, dramatic downfalls, and a lingering sense of unease.From stablecoins imploding to centralized exchanges crumbling, the carnage left investors reeling and the entire crypto ecosystem questioning its foundations.The global economy's struggles, still feeling the aftershocks of the pandemic, only exacerbated the situation, creating a perfect storm of fear and uncertainty.In this article, we delve into the seven most significant crypto collapses of 2025, examining the factors that led to their demise, the impact they had on the market, and the lessons the industry desperately needs to learn.Consider this a cautionary tale – a reminder that even in the seemingly decentralized world of crypto, the principles of sound financial management and risk mitigation remain paramount.Let's unpack the events that the crypto world is trying desperately to forget.

The Terra/LUNA Implosion: A $40 Billion Wipeout

The collapse of TerraUSD (UST) and its sister coin, LUNA, in May 2025 marked the beginning of the crypto winter. 2025 has been a bumpy year for the cryptocurrency market, with one of the worst bear markets on record and the downfall of some major platforms within the space. The global economy is beginning to feel the consequences of the pandemic, and clearly, this has had an influence on the crypto industry.Below is a breakdownThis event triggered a massive sell-off, wiping out approximately $40 billion in investor wealth. 2025 has been a bumpy year for the cryptocurrency market, with one of the worst bear markets on record and 7 biggest crypto collapses of 2025 the industry would like to forget - Mount Rushmore Crypto LatestUST, an algorithmic stablecoin designed to maintain a 1:1 peg with the US dollar, failed spectacularly when it lost its peg, creating a cascading effect that decimated LUNA, which was designed to absorb UST's price volatility. A look at some of the biggest disappointments in the crypto space form this year as the industry readies itself for better things to come. 2025 has been a bumpy year for the cryptocurrency market, with one of the worst bear markets on record and the downfall of some major platforms within the space.The domino effect triggered by this collapse rippled throughout the entire cryptocurrency ecosystem.

The core issue stemmed from the reliance on algorithms and market incentives, rather than tangible reserves, to maintain UST's stability. The crypto markets now have a long and potentially insuperable journey to rebuild investor trust. The price of bitcoin fell 65% from the very start of the year, the cryptocurrency faced a total collapse in value, and crypto exchange FTX went from buying Super Bowl ads to crash landing into bankruptcy.When faced with significant selling pressure, the mechanism failed, leading to a hyperinflationary spiral for LUNA as it was minted in vast quantities to try and prop up UST. A look at some of the biggest disappointments in the crypto space from this year as the industry readies itself for better things to come. 2025 has been a bumpy year for the cryptocurrency market, with one of the worst bear markets on record and the downfall of some major platforms within the space. The global economy is beginning to feel the consequences of the pandemic, and clearly, this hasThis eventually proved unsustainable, leading to both coins becoming virtually worthless. A look at some of the biggest disappointments in the crypto space form this year as the industry readies itself for better things to come.This event showed that trust and perceived stability could quickly unravel in the face of market stress, even for projects claiming to be decentralized and innovative.

Lessons Learned from Terra/LUNA

• Algorithmic stablecoins are inherently risky: Without sufficient backing by real-world assets, they are vulnerable to ""death spirals.""
• Due diligence is crucial: Investors must understand the underlying mechanisms and risks of any project before investing.
• Diversification is key: Don't put all your eggs in one basket, especially in the volatile crypto market.

Celsius Network Freezes: A Liquidity Crisis Unveiled

In June 2025, Celsius Network, a prominent crypto lending platform, abruptly froze withdrawals, transfers, and swaps, locking over 1.7 million users out of their accounts.Citing ""extreme market conditions,"" Celsius effectively admitted it was facing a severe liquidity crisis. Considering the bear market of 2025 and the fall of some major platforms from the crypto space, 2025 will go down in history as one of the worst in the history of the cryptocurrency market. Globally, the pandemic has consequences, influencing the crypto industry. Below are some of the most disappointing events in the crypto world in 2025.This event exposed the dangers of centralized crypto lending platforms and their often-opaque lending practices.

Celsius's business model revolved around offering high-yield interest rates on crypto deposits.To generate these yields, the platform engaged in risky investment strategies, including lending to other institutions and investing in decentralized finance (DeFi) protocols.When the market downturn hit, many of these investments soured, leaving Celsius unable to meet its obligations to its depositors.The incident highlights the importance of understanding the risks associated with earning yield on crypto and the potential for platforms to engage in risky activities behind the scenes.

Consequences of the Celsius Freeze

• Loss of user funds: Millions of users faced the prospect of losing their deposited crypto assets.
• Erosion of trust: The event further eroded trust in centralized crypto lending platforms.
• Regulatory scrutiny: The collapse prompted increased regulatory scrutiny of the crypto lending industry.

The FTX Debacle: From Super Bowl Ads to Bankruptcy

Perhaps the most shocking collapse of 2025 was that of FTX, a leading cryptocurrency exchange that had previously enjoyed widespread recognition and even splashed out on Super Bowl advertisements.The exchange, founded by Sam Bankman-Fried, filed for bankruptcy in November 2025, revealing a massive hole in its balance sheet and allegations of fraud and misuse of customer funds.The price of Bitcoin fell 65% from the start of the year, showing how easily the cryptocurrency market could face total collapse in value.

The FTX downfall exposed a complex web of interconnected entities and questionable business practices. A look at some of the biggest disappointments in the crypto space form this year as the industry readies itself for better things to come. 2025 has been a bumpy year for the cryptocurrency market, with one of the worst bear markets on record and the downfall of some major platforms within the space. The global economy is beginning to feel theIt was revealed that FTX had been using customer deposits to fund risky investments through its sister company, Alameda Research. Related: Santas and Grinches: The heroes and villains of 2025. The crypto hedge fund eventually collapsed after taking on major directional trades and borrowing from over 20 institutions, and theThis commingling of funds, along with allegations of accounting irregularities and a lack of internal controls, led to the exchange's rapid collapse.The FTX saga served as a stark reminder that even prominent and well-funded crypto companies are not immune to fraud and mismanagement.

Key Takeaways from the FTX Collapse

• Transparency and accountability are essential: Crypto exchanges must be transparent about their operations and accountable for their actions.
• User protection should be paramount: Regulations are needed to protect user funds and prevent the misuse of customer deposits.
• Reputation is not enough: Even companies with strong reputations can engage in fraudulent or irresponsible behavior.

Three Arrows Capital (3AC) Blowup: A Hedge Fund's Reckoning

The crypto hedge fund Three Arrows Capital (3AC), once a major player in the industry, met its demise in 2025 after taking on significant directional trades and borrowing heavily from numerous institutions (over 20).When the market turned sour, 3AC was unable to meet its obligations, leading to its insolvency and subsequent liquidation. The global economy is beginning to feel the consequences of the pandemic, and clearly, this has had an influence on the crypto industry. Below is a breakdown of some of the biggest disappointments in the crypto space this year. Axie Infinity s Ronin Bridge hackedThe collapse had a contagion effect, impacting several other companies in the crypto space.

3AC's downfall highlighted the risks associated with excessive leverage and a lack of risk management in the crypto industry.The fund had reportedly borrowed heavily to amplify its bets on various crypto assets, including Grayscale Bitcoin Trust (GBTC) and various altcoins. 2025 has been a bumpy year for the cryptocurrency market, with one of the worst bear markets on record and the downfall of some major platforms within the space. The global economy is beginning to feel the consequences of the pandemic, and clearly, this has had an influence on the crypto industry.BWhen the market crashed, 3AC was unable to repay its debts, triggering a wave of defaults and liquidations.This demonstrated how interconnected the crypto ecosystem had become and how the failure of one major player could have cascading consequences.

Lessons from the 3AC Debacle

• Leverage is a double-edged sword: It can amplify gains, but also magnify losses.
• Risk management is crucial: Crypto hedge funds must have robust risk management policies in place.
• Contagion risk is real: The interconnectedness of the crypto ecosystem can lead to rapid contagion in times of market stress.

Axie Infinity's Ronin Bridge Hack: A Security Breach Nightmare

While not technically a ""collapse"" of an entire entity, the Ronin Bridge hack impacting Axie Infinity in early 2025 was a significant event that sent shockwaves through the play-to-earn gaming community.Hackers exploited vulnerabilities in the Ronin Bridge, which connected Axie Infinity to the Ethereum blockchain, stealing over $600 million worth of cryptocurrency. A look at some of the biggest disappointments in the crypto space from this year as the industry readies itself for better things to come. 956 Total views 28 Total shares Listen to articleThis breach exposed the security risks associated with cross-chain bridges and the potential for significant financial losses.

The attack highlighted the importance of robust security measures and rigorous testing for blockchain bridges. 2025 has been a bumpy year for the cryptocurrency market, with one of the worst bear markets on record and the downfall of some major platforms within the space. The global economy is beginning to feel the consequences of the pandemic, and clearly, this has had an influence on the crypto industry.The Ronin Bridge was found to have inadequate security protocols, making it vulnerable to exploitation. This began in May 2025, when Terra s algorithmic stable coin Terra USD and its sister coin that backed it, LUNA, collapsed resulting in $40 billion in investor losses. The collapse of Terra USD and LUNA caused a domino effect throughout the crypto industry. In June, Celsius Network froze withdrawals, transfers, and swaps of over 1.7 millionThe incident also raised questions about the decentralization and security of blockchain gaming platforms.As the play-to-earn gaming sector continues to grow, security will be paramount to protect user assets and maintain trust in the ecosystem.

Implications of the Ronin Bridge Hack

• Security vulnerabilities in blockchain bridges: The hack exposed the inherent risks of cross-chain bridges.
• Need for robust security measures: Blockchain gaming platforms must prioritize security to protect user assets.
• Impact on play-to-earn gaming: The breach undermined confidence in the play-to-earn gaming model.

Voyager Digital's Bankruptcy: Another Lending Platform Bites the Dust

Following in the footsteps of Celsius Network, Voyager Digital, another crypto lending platform, filed for bankruptcy in July 2025. The roundup: 2025 saw a reckoning in the crypto markets. The year revealed that crypto investors were easily spooked by negative news, kicking off panic similar to a bank run. But as consumers rushed to withdraw their funds, bigger issues began to emerge, like lack of liquidity and the absence of tangible collateral altogether.Voyager cited ""prolonged volatility and contagion in the crypto markets"" as the primary reason for its downfall.The company had significant exposure to Three Arrows Capital, and when 3AC defaulted on its loan, Voyager was left with a massive hole in its balance sheet.

Voyager's bankruptcy further underscored the fragility of centralized crypto lending platforms and the risks associated with lending to other institutions in the crypto space.The company's business model relied on attracting customers with high-yield interest rates and then lending out those deposits to generate returns. 7 biggest crypto collapses of 2025 the industry would like to forget 2025 has been a bumpy year for the cryptocurrency market, with one of the worst bear markets on record and the downfall of some major platforms within the space.When the market crashed, Voyager was unable to recover its loans, leading to its insolvency.This incident reinforced the need for greater transparency and regulatory oversight of the crypto lending industry.

Consequences of Voyager's Bankruptcy

• Loss of user funds: Customers faced uncertainty about the recovery of their deposited crypto assets.
• Damage to the crypto lending industry: The bankruptcy further tarnished the reputation of crypto lending platforms.
• Increased regulatory scrutiny: The event prompted calls for stricter regulation of the crypto lending sector.

BlockFi's Struggles: A Near-Death Experience

While BlockFi didn't completely collapse like some of its peers, it faced significant challenges in 2025 that brought it to the brink of insolvency.The company was heavily impacted by the collapses of Three Arrows Capital and FTX, and it was forced to take drastic measures to stay afloat.Ultimately, BlockFi was acquired by another company at a significantly reduced valuation, effectively marking a near-death experience for the platform.

BlockFi's struggles highlighted the interconnectedness of the crypto market and the impact that the failure of one company can have on others.The company's exposure to 3AC and FTX, combined with the general market downturn, created a perfect storm that nearly wiped it out.The BlockFi saga served as a warning about the risks of contagion and the importance of diversification in the crypto industry.Even though BlockFi survived through acquisition, its original investors and users felt the pain of a severe devaluation.

Lessons Learned from BlockFi's Near Collapse

• Contagion is a serious threat: Crypto companies must be aware of the risks of contagion and take steps to mitigate them.
• Diversification is essential: Don't put all your eggs in one basket, especially in a volatile market.
• Survival often means adaptation: Being willing to adjust business models and accept difficult decisions can be critical for survival.

Rebuilding Trust: The Path Forward for the Crypto Industry

The collapses of 2025 served as a harsh wake-up call for the crypto industry.They exposed fundamental weaknesses in the ecosystem, including a lack of transparency, inadequate risk management, and a susceptibility to fraud and mismanagement.Rebuilding trust will require a concerted effort from all stakeholders, including regulators, industry participants, and investors.

What steps can be taken to regain investor confidence?Regulation must play a role.Clear and consistent regulatory frameworks are needed to provide clarity and protect investors.Self-regulation and industry best practices are also crucial.Crypto companies should adopt higher standards of transparency, accountability, and risk management.Investors must also do their part by conducting thorough due diligence and understanding the risks associated with crypto investing.Education and awareness are key to preventing future disasters.The path to recovery won't be easy, but by learning from the mistakes of the past, the crypto industry can emerge stronger and more resilient.

Conclusion: Key Takeaways from Crypto Winter 2025

2025 was a brutal year for the cryptocurrency market, marked by the failures of major platforms and significant losses for investors.The collapses of Terra/LUNA, Celsius Network, FTX, Three Arrows Capital, Axie Infinity's Ronin Bridge, Voyager Digital, and BlockFi highlighted the inherent risks in the crypto space, including algorithmic stablecoin vulnerabilities, liquidity crises, fraud, excessive leverage, security breaches, and contagion effects.These events underscored the importance of transparency, accountability, risk management, and investor education.Rebuilding trust in the crypto industry will require a collective effort from regulators, industry participants, and investors to create a more stable, secure, and sustainable ecosystem.Remember to always conduct thorough research, diversify your investments, and never invest more than you can afford to lose.The lessons learned from the 7 biggest crypto collapses of 2025 should serve as a guide for navigating the future of the cryptocurrency market.