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It’s was a busy 2021 for the crypto industry to say the least. The year saw a tsunami of institutional investment wash into crypto, the NFT boom, and a country accept Bitcoin as legal tender.
But this year has also seen its share of scams, scandals and hijinks. That’s why Decrypt has chosen to recognize not just the famous people in crypto, but the infamous ones as well. Here’s our naughty list for 2021
Tesla CEO Elon Musk. Image: Shutterstock.
Musk made himself a crypto hero when Tesla bought $1.5 billion in Bitcoin in February, prompting a market surge. But just three months later, he backtracked on Bitcoin over its energy use. Environmentalists celebrated the move, but many of crypto’s most influential turned their back on the Tesla CEO, with one complaining of “shady shit.” Their mood didn’t improve when Bitcoin promptly fell from $57,000 to $44,000 in less than a week.
Others charged Musk with hypocrisy, citing his response to a Jack Dorsey tweet that said Bitcoin incentivized renewable energy. “True,” Musk said in April, just one month before Tesla’s U-turn. What really changed? It was also hard for many to take his Dogecoin shilling seriously.
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Beyond Musk’s Bitcoin 180, others have questioned the ethics of his tweets, which have demonstrably swayed the crypto markets several times this year. “If a single tweet can potentially lead to an increase of $111 billion in Bitcoin’s market capitalization, a different tweet could also wipeout to a similar value,” noted one researcher.
The broader crypto industry has spent 2021 attempting to make inroads with regulators this year—but CEO Changpeng "CZ" Zhao spent much of the year trying to avoid them.
This year alone, Binance ticked off regulators in the UK, the Cayman Islands, Italy, Holland, South Africa, Singapore and Japan to name a few. The UK's Financial Conduct Authority went so far as to describe the company as “incapable” of being regulated.
In July, FTX bought out Binance's shares in FTX, and it sure looked like the reason was tension over their different approaches to regulation: "I'm not involved in the conversations between them and regulators, and so all I can do is speculate, but something I'll say is that we try really hard to be as cooperative as we can with regulators," FTX CEO Sam Bankman-Fried told Decrypt at the time. "I think that when you don't do that, and when you sort of appear less flexible or responsive, I think that’s more likely to lead to cases where regulators might feel like they have no choice but to start bringing the hammer."
In recent months, CZ has finally changed his tune and attempted to play nice by hiring former regulators. It remains to be seen if those gestures will be too little, too late. It wasn’t enough to prevent him from making Decrypt’s naughty list.
El Salvador's President Nayib Bukele. Image: Wikimedia
El Salvador’s president instantly won over many of the world’s Bitcoin maximalists when he pushed to establish Bitcoin as legal tender in the country, but critics say the way he went about it has undermined everything Bitcoin is meant to stand for.
Despite protest after protest after protest, and multiple surveys indicating Salvadorans did not want to accept Bitcoin as legal tender, Bukele’s government pushed through its Bitcoin agenda anyway. Bukele’s well-documented authoritarian streak was further underscored by the arrest of well-known Bitcoin and government critic Mario Gomez without a warrant.
Meanwhile, Bukele has avoided explaining who controls the private keys to his country's Bitcoin stash. nor has he provided any criteria that governs when he uses public money to purchase Bitcoin. Not a good look so far for the cryptocurrency’s first test run as a legal tender.
Hackers have always been part of crypto, but in 2021, they took it to a new level. Following the Bitcoin-enabled Colonial Pipeline and JBS ransomware attacks, the U.S. Justice Department announced it would elevate ransomware attacks to a similar priority level as terrorism.
The low point among a number of examples came in August when hackers raided the PolyNetwork to the tune of $600 million—by far the largest hack in crypto history.
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Not only have these bad actors earned the crypto industry a spot on the Biden administration’s shit-list, but they helped place the U.S. on yet another collision course with Russia, where much of the crypto-driven cybercrime takes place. They also contributed to another round of headlines that make Bitcoin look to many people like a tool for cyber-criminals.
Like Elon Musk, Xi Jinping and his minions made a hardline turn on Bitcoin this year.
Even after having outlawed crypto trading back in 2017, the CCP banned crypto mining in 2021, after making a commitment to carbon neutrality at the UN in 2020.
Environmentalists might applaud any action aimed at Bitcoin mining, but China’s ban cost miners their jobs, drove out startups and entrepreneurs, and tanked the price of Bitcoin on several occasions. More importantly, China's overall approach to crypto has been famously contradictory: Even as it drove out miners and restricted Chinese tech companies from touching crypto, it launched its own government-promoted digital yuan.
As Galaxy Digital CEO Mike Novogratz tweeted in June, it's all about government control, and it goes against the whole point of Bitcoin.
SQUID token rug-pullers
Netflix’s hit South Korean series "Squid Game" took the world by storm earlier this year. And then so did a scammy Squid Game (SQUID) token.
SQUID, launched on Binance Smart Chain, debuted in November amid the height of the show's popularity. It reached an all-time high of $2,856 before its accompanying website, social media platforms, and money disappeared.
With the benefit of hindsight, the warning signs—including a litany of grammatical errors on the website and bogus Elon Musk endorsements—were obvious. Alas, many retail investors fell for it all the same, earning the SQUID rug-pullers $2 million. Naughty!
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