Crypto: A Bernie Madoff-Style Scheme May Have Crushed Prominent Lenders

An unprecedented crisis of confidence has affected the crypto industry for several months. 

To measure it, just consider the prices of cryptocurrencies, which are often attached to a platform or a project. The cryptocurrency market has lost $2 trillion in value since hitting an all-time high of $3 trillion in early November, according to data firm CoinGecko. Prices for bitcoin, the king of cryptocurrencies, are down more than two-thirds since hitting an all-time high of $69,044.77 on November 10.

The severity of the crisis intensified earlier this spring with a seemingly contained event. Early in May, sister coins Luna and UST or TerraUSD collapsed. The fall of the two digital currencies was caused by the fact that many investors wanted to liquidate their positions at the same time. At least $55 billion was wiped out in this disaster.