Crypto winter / digital-asset bust cycles

What this driver is

Crypto winter / digital-asset bust cycles is one continuing leverage-and-custody mechanism: the 2021 peak-and-unwind, the May 2022 Terra/UST collapse, the June 2022 Three Arrows Capital failure, and the 11 November 2022 Chapter 11 filing of FTX Trading Ltd. in the District of Delaware (Case No. 22-11068). It is a bust-cycle file with dated court and market-structure instruments, not a unique market-cap integer and not a brochure that “crypto always comes back.”

The driver is not cryptoasset-adoption as a generic meter. Neighbouring mechanisms — financial-market-volatility, banking-system-stability — can move with this file (USDC’s March 2023 SVB-adjacent depeg is a neighbour). They do not replace it. A later 2024 spot-ETF listing is a new fact, not a rebate of FTX. It is not hung on territorial-revisionism (1918–45). It is not ukraine-war.

It applies from the late-2021 peak through Terra/UST in May 2022, Three Arrows in June 2022, FTX Trading Ltd.’s 11 November 2022 voluntary Chapter 11 petition, the John J. Ray III first-day declaration, and the later criminal-and-civil cluster against named founders who are not published person nodes and are not minted here. Customer-property allegations are allegations until a judgment; the Chapter 11 petition is a completed filing.

The legal core is FTX Trading Ltd., Case No. 22-11068 (Bankr. D. Del.), petition 11 November 2022 (https://www.courtlistener.com/docket/65748821/ftx-trading-ltd-and-the-financial-times-ltd/ (opens in a new tab)). Epiq’s case page records petitions on 11 and 14 November 2022 before Judge John T. Dorsey, later Chief Judge Karen B. Owens (https://dm.epiq11.com/case/ftx (opens in a new tab)). Wire headlines that print a unique remaining-customer-claim integer are the wires’. They are not stored here as Contribution.size.

Mechanism

The file moves welfare through named channels.

First, reflexive leverage. 2020–21 easy dollar liquidity and promotional yield products levered tokens on tokens. When prices fell, collateral calls cascaded. This page does not invent a unique peak-to-trough percentage as size.

Second, algorithmic stablecoin failure. In May 2022 TerraUSD (UST) lost its peg and LUNA hyper-inflated on the way to collapse. Terraform Labs and its founder are not minted here. The depeg is a completed market event; the unique “lost TVL” integer stays on named dashboards, not as Contribution.size.

Third, fund failure. Three Arrows Capital’s 2022 liquidation is a completed intermediary bust that transmitted Terra losses into the rest of the credit pool.

Fourth, exchange custody. On 11 November 2022 FTX Trading Ltd. and affiliates filed Chapter 11 in Delaware. The first-day papers and the Ray declaration described a collapse of controls. Customer deposits treated as house money, if proven, are a custody failure. The petition is the instrument.

Fifth, household incidence. Retail holders who bought leverage products, “yield,” or left coins on an exchange met a custody and price loss. This page stores the court file. It does not invent a unique retail-loss census.

Timing is hours for a depeg, days for a Chapter 11, and years for a confirmed plan (FTX plan confirmed 8 October 2024 on the docket). A later genuine spot-ETF listing is a new fact. It would not rename this winter as a technician success.

Evidence base

The best evidence is the docket.

FTX Trading Ltd., Bankr. D. Del. 22-11068, voluntary petition 11 November 2022 (CourtListener). Epiq claims-agent case page (https://dm.epiq11.com/case/ftx (opens in a new tab)). Ray first-day declaration as filed in that case. Reuters and other wires on 11–12 November 2022. Terra/UST contemporaneous market reports of May 2022. Three Arrows contemporaneous June 2022 reports.

Evidence is strongest for the 11 November 2022 petition and for the existence of the Terra depeg as a dated market break. It is weakest where a 2024 ETF listing is asked to prove that 2022 customers were made whole on the day of the petition.

This page does not invent a unique market-cap drawdown, a unique customer-claim total, or Contribution.size. Contested estate figures require the named docket exhibit.

Effect on welfare indicators

This driver, when it actually runs, is a first-order channel into household financial-loss and a legal-process channel into customer recovery, not into UCDP deaths as a family-template clone.

• Access to justice: direction mixed-to-negative at the moment of the petition (customers could not withdraw; they were pushed into a Chapter 11 queue) and later conditional on the estate. Horizon: days to years. Confidence: medium for the completed filing as a legal-process channel; low for a unique later recovery coefficient. No unique claim integer is invented here. The welfare direction stored for the collapse week is negative: a completed inability to retrieve deposited assets is not a civic dawn.

A CPI path does not follow from a token depeg without a sourced household-consumption study. Missing coefficients stay missing.

The welfare sign of the driver on exchange customers in November 2022 is negative: strengthening the bust increased custody loss. A later confirmed plan is a new fact. It does not rebate the petition week.

Interactions and contested points

It interacts with financial-market-volatility because risk-off and correlated token dumps sit in the same weeks. It interacts with banking-system-stability at the March 2023 USDC/SVB neighbour. Reinforcement is obvious when a depeg and a Chapter 11 sit in the same year. Offsetting is a later ETF listing.

The strongest competing view is that “not your keys, not your coins” means FTX customers chose the risk. The petition still records a completed platform failure. Self-custody advice does not convert a Chapter 11 into a unique later plus.

A second competing view is that this is only FTX. Terra and Three Arrows are prior 2022 instruments on the same leverage chain.

A third competing view is that later price recovery proves the winter was a buying opportunity. Prices are not this page’s unique size. Customers who could not withdraw in November 2022 did not capture a later print.

Established: Terra/UST May 2022 depeg as a dated market break; FTX Trading Ltd. Chapter 11 petition 11 November 2022, Case No. 22-11068; Three Arrows 2022 failure as a credit-pool transmitter. Not established: a unique market-cap or customer-claim integer as size, or minted pages for Sam Bankman-Fried, Changpeng Zhao, or Do Kwon. A later genuine confirmed-plan distribution would be a new fact. It would not rename this driver as a cycle-success brochure.