Any active participants in the crypto ecosystem will know all too well that this industry can surprise you, sometimes pleasantly, and other times not so much.
Just like every year, numerous points throughout 2024 spooked many investors to their core as they began wondering what would come of these developments and how they would impact them.
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Now that most of these events are over, and we can look back at them without fear and anxiety overriding our minds, let’s reflect on some of the scariest moments that impacted the crypto industry in 2024.
Spookiest Crypto Moments This Year
Though 2024 has seen some genuinely impressive developments that have helped boost crypto’s recognition and acceptance, more than a few sudden scares showed up along for the ride, too.
From worrying arrests to fraudulent hacks to a stock market crisis, 2024 was a year full of treats, but it also had its fair share of tricks.
1. DMM Bitcoin Hack
DMM Bitcoin is one of the largest centralized exchanges in Japan, but in May 2024, it was the victim of the third-biggest crypto hack in history.
After a large-scale transfer of 4502.9 BTC ($308 million) was detected on the network, it was soon revealed that the perpetrator had stolen the funds. They then proceeded to place them in numerous different wallet addresses in smaller amounts of 500 BTC each to hide their identity.
The disastrous cyberattack forced the DMM Bitcoin team to raise the stolen funds over the next few weeks through the help of fellow ‘group companies’ to pay back those who were affected.
Though this primarily impacted Japanese investors, the hack sent a cautious reminder around the globe that centralized exchanges are always vulnerable to cyberattacks. There are definitely ways investors can protect themselves on an individual level, such as using 2-factor authentication and wallets outside of the exchange itself. However, it still sparked a lot of anxiety among those relying on centralized exchanges for trading and storage.
2. Pavel Durov Arrest
Pavel Durov, the head of messenger platform Telegram, was arrested on August 24 at Le Bourget airport in France.
Because Telegram uses encryption to protect user messages from third parties and unwanted onlookers, Durov was charged with facilitating illegal activities and scammers that he supposedly failed to report to authorities.
Though Durov isn’t directly related to crypto, the news sent off an alarm across the industry, primarily because the privacy offered by Telegram was very similar to that found in cryptocurrency through cryptography.
Vitalik Buterin, for example, the founder of Ethereum (ETH), shared many people’s concerns, saying, “This looks very bad and worrying for the future of software and comms freedom in Europe.” Similarly, the CEO of Tierion, Wayne Vaughan, tweeted that “Telegram CEO is being charged for using cryptography,” adding, “This should concern everyone in Bitcoin and crypto – no one should need government permission to do math.”
Following Durov’s arrest, Telegram’s own Toncoin token plummeted in value, and even Bitcoin (BTC) tumbled from its high of $64,000 a few days before, signaling a disruption in the crypto market.
By far, though, the biggest impact was people’s heightened fear of government intervention. This arrest set a dangerous precedent that they could find a backdoor into crypto by simply deploying an illegal activity investigation.
3. Stock Market Dive
The second week of August started on a pretty sour note for crypto investors when it was announced that the global stock market had taken a sudden downturn.
Numerous factors contributed to this, including a less-than-satisfactory U.S. job report, a hike in interest rates, Japan’s Nikkei 25 falling in value, and slow growth in the EU and China.
For a single day, the crypto community was thrown into a frenzy as prices began to plummet, accompanied by mass sell-offs.
As the U.S. dollar began to weaken against other fiat currencies, stablecoin holders started to worry about the value and reliability of their tokens.
Additionally, Bitcoin declined 8.5%, while Ethereum fell by a staggering 21.8% after the news broke. Popular crypto exchanges RobinHood and Coinbase also fell 10% and 5%, respectively.
Thankfully, there was a quick bounce back in the following days, but this was still one of the scariest days of the year, which could have gotten ugly if a recovery didn’t happen as quickly as it did.
4. WazirX Compromised
On July 18, 2024, WazirX, India’s largest cryptocurrency exchange, was hacked, supposedly by the prominent North Korean cyberhacking entity Lazarus Group.
This highly sophisticated breach involved breaking into a multi-sig wallet by modifying the required signatures needed to open it and gain access to the funds inside.
By design, multi-sig wallets require multiple signatures to execute transactions, so they are theoretically one of the most secure types of wallets. This time, though, their vulnerabilities have been exposed.
In response, WazirX froze all trading and withdrawals on the platform, but the damage had already been done, as the hackers had stolen nearly $230 million worth of funds.
Though most crypto investors have seen their fair share of high-scale hacks, this one stood out so much because it highlighted the vulnerabilities of multi-sig wallets. These forms of storage have become increasingly popular over the years for their heightened security, so this sudden development understandably became a horror story for many who relied on them.
5. Biden Vetoes Crypto Custody Bill
President Joe Biden took it upon himself to veto a crucial bill in May that would have allowed highly trusted financial institutions to custody Bitcoin and other cryptos.
Biden made it clear early on in his presidency that he would take an anti-crypto stance, but this was an especially surprising and quite worrying development, primarily because it granted a lot of power to the SEC (Securities Exchange Commission).
The SEC have long been critics of the crypto industry, and their growing influence could lead to heightened regulation, and maybe a crackdown on the industry altogether. A report relating to Biden’s decision even reflects this reliance on the SEC as it states the reasoning for the veto was to “Reflect considered technical SEC staff views regarding the accounting obligations of certain firms that safeguard crypto-assets”.
This, combined with Biden’s appointment of several key tech skeptics to the SEC, including the infamous Gary Gensler, caused many investors to worry that this may have opened the floodgates for intense regulation going forward.
6. Ripple vs. SEC Approaches the Deadline
Speaking of the SEC and regulations, 2024 was intended to be the conclusion of the long running Ripple (XRP) vs SEC case with a planned deadline of October.
While this has since been moved yet again to 2025, many investors were eagerly awaiting the results. Depending on who wins, the case itself will be instrumental in setting out the regulatory groundwork for crypto.
If the SEC succeeds, crypto could be reclassified as a security, resulting in more third party involvement, compliance costs, and a general restructure of the crypto landscape.
Despite Ripple seeing some convincing wins throughout the case, the weight of this confrontation and the importance of the year 2024 as a planned deadline was certainly anxiety-inducing, to say the least.
7. Bitcoin Halving
To ensure that Bitcoin doesn’t become inflated and lose its value, there is a Bitcoin halving every four years, which cuts the block rewards awarded to miners by half.
By miners, I mean the individuals whose job is to verify incoming transactions entering the blockchain through a process known as mining in exchange for a few extra tokens.
The halving aims to increase token prices and sustain Bitcoin’s value, but while it’s usually a joyous occasion, there’s always the worry of something going wrong, and this year was no different.
As Andrew O’Neill, the managing director of the digital asset research lab, argues, the fear is that reducing mining rewards further would mean that the miners themselves would earn barely any profit.
This could mean fewer people decide to become miners and even result in a centralized mining community with a small group of people running the whole show.
This would then impact investors, who would face sluggish transaction speeds and potentially a heightened degree of fraudulent actions on the network. Luckily, the halving of 2024 didn’t go down this road, but it was virtually impossible to discern what would happen in the days leading up to it.
8. Tether Investigation
Only a few days before people could enjoy the Halloween festivities, investors were given an early scare when the Wall Street Journal reported that Tether (USDT) was under investigation.
Tether is a stablecoin pegged to the USD currently held by over 300 million investors, making it the most popular of its kind.
However, reports that it was being used for illegal activities caused a mini-panic among holders. Despite the fact that the head of Tether stated that the investigation was actually untrue, the mere implication of a crackdown similar to Telegram became a major worry.
Following the announcement, Bitcoin fell from $69k to $66.5, and Ether from $2,505 to $2,461. Other popular cryptos, including Solana (SOL) and Ripple (XRP), also fell.
In the end, the investigation did seem to be nothing more than hearsay, but it shows how much of an immediate panic can arise when a stablecoin is under threat, given how many people rely on it.
What Does 2025 Hold for Cryptocurrency?
The year 2024 may have delivered its fair share of tricks, but thankfully, there are more than a few treats that those involved in the crypto world can look forward to in the coming year.
The SEC vs. XRP case is presumed to finally reach its conclusion in 2025, putting people’s anxieties and fears to rest.
Additionally, the rise of crypto ETFs is also predicted to grow, allowing crypto to become integrated and gradually accepted into other financial markets, bolstering its growth and adoption.
There’s also the hope that Bitcoin will finally reach its target of $100,000 next year if it follows a bullish run. However, as we all know, the crypto industry is more unpredictable than an Ouija board, so while these are all popular predictions, the only way to find out is by being a member of the crypto community yourself when the new year rolls around.
On the Flipside
- Despite the numerous scares that 2024 delivered, crypto has seen a lot of positive developments throughout the year too.
- This especially applies to wider adoption, which has been facilitated thanks to ETF introductions and BTC’s fairly bullish year.
Why This Matters
Though the saying goes, “History repeats itself,” with the volatility and unpredictability of the crypto industry, there’s never any telling what sorts of events can occur. However, reflecting on these incidents can help us as investors be better prepared for such unforeseen incidents that may occur in the future.
FAQs
The collapse of the crypto exchange FTX and Sam Bankman-Fried’s arrest are often regarded as the most infamous crypto scam in the industry.
Multi-Sig wallets require at least two private keys to sign off a transaction.
DeFi stands for decentralized finance. It is a peer-to-peer financial system that allows investors to interact with digital currencies and NFTs in different ways, such as borrowing and lending. DeFi is a major component of Web3, which is a fully decentralized internet.