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Major Crypto Fails: What Do They Teach Us?

At the beginning of the third decade of the 21st century, cryptocurrencies took a prominent place in the global and national financial system in general and in the personal finances of investors in particular. Despite this, the use of crypto coins is often accompanied by various risks and therefore can lead to fails. It is recommended to carefully study this issue in order to be able to swap SOL to BUSD safely.

Major Risks Associated with the Use of Cryptocurrency

The risks associated with the use of cryptocurrency can be conventionally divided into three categories:

  1. The first group includes security vulnerabilities of the blockchain system itself and the service infrastructure built on it. These are the services of intermediaries, such as cryptocurrency exchanges and trading platforms, electronic wallet services, etc.;
  2. The second group of risks associated with the use of cryptocurrency is of a financial nature. First of all, we are talking about their high volatility;
  3. The third group of risks includes the use of cryptocurrency in opposition to legitimate goals. These include money laundering, terrorist financing, etc. 

Top 4 Fails in the History of Cryptocurrency

Due to the risks described above, there are occasional fails in the crypto market. The most significant are described below.

Mt.Gox Hack (2011)

The first and largest crisis in the history of the crypto industry happened more than ten years ago. At that time, the market was a completely different structure. The Mt.Gox exchange quickly gained popularity. In the first half of 2011, the BTC price rose from $2 to $32. But then the Mt.Gox hack happened. In one day, the value of BTC fell to a few cents.

Financial experts argued that BTC would stop developing. But soon the price continued to grow further.

BTC Collapse Due to Chinese Government Decree (2013)

On December 3rd, BTC reached a phenomenal price of $1,151 per token. A few days earlier, the cost was $200. Enthusiasts began to buy the coin. But the Chinese government issued a decree banning Chinese banks from dealing with cryptocurrencies. This led to a sharp drop in the value of the digital asset. 

Squid Game (SQUID) Rug Pull (2021)

At the end of October 2021, SQUID began to be sold on cryptocurrency exchanges. Its creators were inspired by the popular series The Squid Game. But this crypto turned out to be a fraudulent scheme. The scam was understandable from the start as investors could buy coins but could not sell them. The coins were intended only for the Squid Game. After the launch of the game, buyers hoped to exchange digital assets for fiat money. But it didn’t happen.

According to CoinMarketCap, the price of Squid exceeded $2.8 per coin on November 1, 2021. Then it collapsed to almost zero. 

The Terra LUNA / Terra USD Crash (2022)

The collapse of the algorithmic stablecoin USD and the highly capitalized LUNA token in 2022 became a real shock for the crypto industry. In a matter of days, the savings of many users and the multimillion-dollar assets of large companies have depreciated. The collapse began on May 8, when the algorithmic stablecoin Terra USD temporarily lost its peg to the US dollar. This happened after one of the users sold USD worth almost $300 million.

Practice shows that one of the most popular projects today is Solana (SOL). It is a highly functional open-source project that relies on the free nature of blockchain technology to create DeFi solutions. Many people exchange MATIC to SOL since the project has not experienced any major failures during its existence and often turns out to be a promising investment.


The operation of the cryptocurrency market is accompanied by a significant number of risks. Therefore, investing in cryptocurrencies requires significant theoretical and practical knowledge and skills, incredible patience, and faith in the future of digital coins.

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