Discover Bybit’s flexible crypto loan options—borrow against your assets to trade, stake, or earn rewards without selling your crypto.

Borrowing funds for your crypto trading can be an excellent capital efficiency measure. In many cases, it pays to borrow the cryptocurrency of your choice against collateral instead of buying it outright. Crypto loans can also help you access unique yield-generation opportunities, such as leveraged staking. Savvy traders and investors in crypto have long known that borrowing is one of the key avenues for improving the efficiency, flexibility and profitability of your operations. 

Bybit offers you several ways to borrow cryptocurrency. These include flexible rate and fixed-rate overcollateralized crypto loans, Unified Trading Account (UTA) auto-borrowing, the Margin Staked SOL product and Launchpool Borrow & Stake. These options allow you to access crypto funds in highly efficient and flexible ways to support your trades, earn 

 rewards or receive early-stage tokens for free. 

In this article, we’ll look in detail at these four ways of borrowing funds with Bybit, and discuss their key features, use cases and benefits. 

1. Crypto Loans — Liquidity without selling

Bybit offers its users overcollateralized crypto loans, with both flexible and fixed-rate interest. Flexible crypto loans feature variable interest, updated hourly based on prevailing market conditions. Fixed-rate loans offer preset interest for borrowing tenures of 7, 14, 30, 60, 90 or 180 days, depending upon your preference. 

Flexible rate loans are supplied directly by the Bybit platform, while fixed-rate loans are procured through Bybit’s 

 (P2P) lending service. Crypto lenders post their offers on Bybit P2P and specify their preferred conditions, such as the loan duration and interest rate. Borrowers may choose from the existing offers, or create a separate loan order with the interest rate and other conditions they’d like to access. The system then evaluates orders from lenders and borrowers in order to find the optimal match and connect the two parties.

Since early May 2025, the two loan varieties have been integrated into a single user interface under a unified product umbrella called Crypto Loans. You can now use the same shared collateral to secure both flexible and fixed-rate loans. Your collateral can also be used across different markets and products on the platform, such as the Spot and Derivatives markets and Bybit staking products.

 (LTV) thresholds applicable for margin limits, margin calls and liquidation — 80%, 85% and 92%, respectively. 

Bybit offers a wide variety of crypto assets for borrowing and collateral, including 

 and the leading high-cap cryptocurrencies, such as 

Interest rates for all Crypto Loans are compounded hourly. Fixed loans have a set rate in a range specified by the supplier and/or borrower, and flexible-rate loans are subject to a floating rate based on market conditions.

Flexible Crypto Loans are particularly useful for traders who wish to borrow with maximum flexibility and efficiency, repaying the amount when they find it most suitable based on their trading activity. For example, if you borrow funds for just 15 hours to facilitate some short-term trades, you’ll only pay interest for those 15 hours and not a single hour more. 

On the other hand, Fixed-Rate Crypto Loans suit borrowers who would like to operate in complete certainty, regardless of market developments, by locking in a preset interest rate.

2. UTA auto-loans — active capital with full control

Borrowing funds is automatically enabled in certain scenarios under your Bybit 

 (UTA). Automatic borrowing in the UTA is triggered when the following situations arise:

UTA loans aren’t available for manual borrowing; they’re only automatically triggered under the above scenarios. However, repayments are possible both in manual and auto modes. Interest rates for these loans are updated on an hourly basis. 

One key benefit of UTA loans is their applicability to spot margin trading on Bybit. With spot margin trading, you can use assets in your spot account as collateral for 

 with leverage ratios of up to 10x. Supported collateral assets include over 200 cryptocurrencies, including all high-cap coins. 

UTA loans are ideal for leverage trading aficionados, and for active traders who place frequent orders and might find themselves short on funds during a particular trade. The auto-borrowing function of these loans ensures that your orders go through, even if there’s a shortfall of funds or specific assets in your wallet. 

3. Margin Staked SOL — yield boost through leverage

 allows you to use leverage to boost your Solana liquid staking yields. To use this product, you’ll need to commit your SOL funds to Solana staking, which Bybit will manage through the use of the 

. Sanctum is a leading provider of infrastructure and services for Solana staking. 

You can borrow additional funds to stake with up to 4x leverage available. Upon staking, you’ll be issued the 

 (LST) that accrues your staking rewards. 

The interest that you pay on the borrowed funds is updated hourly. All interest repayments are handled automatically, either when the user decides to stop staking or their losses reach 90% of their staked principal. You can redeem your SOL funds at any time.

4. Borrow & Stake on Launchpool — multiply your rewards with minimal funds

option through its Launchpool. By staking your crypto funds and borrowing up to 3x of your principal, you can earn rewards through free tokens of projects offered via the Launchpool. Reward tokens for potential future market stars are usually issued for free by early-stage web3 projects.

is extremely user-friendly, and it takes just a single click to borrow and stake. As with the other three methods of borrowing, the interest rate on your borrowed funds is subject to hourly updates.

Choosing the right tool for your strategy

The four Bybit loan options above each have unique benefits and use cases. Deciding which option best suits you will depend upon your trading strategy, goals, available capital, familiarity with spot margin trading, experience level and openness to leverage. 

The below table summarizes the four loan products by user profile, primary use case and capital efficiency model. 

Bybit’s Crypto Loan products are ideal — not just for borrowing, but also for utilizing your existing idle funds for margin trading and staking to amplify yields. Each product type applies to different potential scenarios:

With the above loan options, crypto borrowing is no longer just about meeting fund shortfalls: now it’s a valid strategy to get the most out of your crypto trading.

Intermediate

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Bybit Loan: Flexible paths to capital efficiency

Oil is the most volatile major commodity in global markets, significantly more so than gold. It’s not uncommon for oil prices to rise or fall by 5% or more in a single day. 

Introduction: Oil as the most volatile major commodity

Oil is the most volatile major commodity in global markets, significantly more so than gold. It’s not uncommon for oil prices to rise or fall by 5% or more in a single day. This makes oil one of the most attractive instruments for active traders, offering frequent price swings and rapid opportunities.

Unlike most commodities, oil prices are influenced not only by global demand and macroeconomic conditions, but also by direct supply decisions made by producers. These decisions can trigger major shifts — especially when they come from the OPEC cartel, which plays a unique and powerful role in managing global oil output.

Supply side: OPEC, Russia and market control

Oil supply isn’t fixed like that of gold or silver. It’s flexible and largely managed by OPEC and its allies — known collectively as OPEC Plus — including Saudi Arabia, Russia, the UAE, Qatar and other producers. Together, they control more than 35% of global oil supply.

Their decisions to increase or cut production can move the market instantly. For example, OPEC is now considering a third consecutive supply hike, possibly increasing output by 138,000 or even 411,000 barrels per day. Moves of this scale tend to push oil prices lower.

Traders monitor OPEC meetings closely, because supply decisions directly impact price direction. The next major meeting — scheduled for July 2025 — could set the tone for oil markets for the rest of the year.

Demand side: Tariff tensions and global growth

On the demand side, the biggest current factor is Trump’s trade policy. New tariffs slow global trade, and slower trade reduces global growth — and with it, the demand for oil.

This was clearly seen on April 2, when Trump announced a new round of tariffs. Oil prices quickly dropped from $70 to $54 in just a few days — a 22% decline. Later, when tariffs were delayed, oil prices recovered to above $60.

It’s a clear example of how traders respond to political headlines. If more tariffs are announced, oil could fall again. But if a US-China trade agreement is reached, oil prices might rebound sharply on improved demand expectations.

More catalysts ahead: OPEC, Iran and inflation pressure

Beyond trade policy, the following supply-side catalysts are coming into play.

Oil is traded through two main contracts:

Both contracts are highly correlated. Traders choose between them based on geographic preference, liquidity and contract structure.

Technical analysis: Key levels for WTI crude

Looking at the daily chart of WTI crude, the following important patterns are in play.

These levels offer traders clear entry and exit points, based on momentum, reversals and breakout setups.

Conclusion: Oil is set for a volatile summer

Oil remains one of the most dynamic assets to trade, driven by shifting supply, policy decisions and changing global demand. The combination of OPEC’s actions, geopolitical negotiations and tariff developments creates continuous opportunities.

In the coming weeks, make sure to focus on these key drivers:

From a technical perspective, $60 is the key level. A decisive move above or below it could define the next major trend.

For now, the blend of macro news, OPEC production plans and technical volatility makes oil one of the top markets for traders looking to catch fast and meaningful moves.

Advanced

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Bybit X FXStreet Commodity Report: Crude oil sees key support at $60 with upside at $68 if tariffs ease

Discover Tokyo Games Token (TGT), Japan’s first AAA web3 gaming token powering immersive play-to-earn experiences like the upcoming TOKYO BEAST.

Japan’s significant share of the global gaming market ranks third largest worldwide and generated $26 billion in revenue in 2024 alone. Now, as the gaming industry’s focus continues to shift toward 

 gaming, it’s not surprising that Japan has jumped on the bandwagon by launching the country’s first blockchain-based AAA gaming platform, Tokyo Games.

With a vision to enrich the current Web3 gaming scene, Tokyo Games will debut into this niche with its much-anticipated AAA game, 

The Tokyo Games Token (TGT), which will facilitate the platform’s growth and functionality, is at the heart of its operations.

The Tokyo Games Token is the token that will be used to drive the operation of all games exclusively built on the Tokyo Games platform. 

The gaming platform is built by Play3 Ltd and is backed by top mobile gaming developers in Japan, such as Cygames and gumi Inc.

The token, which has been dubbed “the first AAA token in Japan,” launched on May 21, 2025, and was issued on the Immutable zkEVM chain.

TGT has a maximum total supply of one billion tokens distributed across various stakeholders on the platform. TGT unlocks have varying vesting schedules designed to promote the project’s health and sustainability.

Notably, the team and the foundation have locked their tokens for one year after the token generation event (TGE) as a show of commitment to making the project successful.

 for the Tokyo Games ecosystem, TGT will have the following three uses:

 is the first web3 game developed by Tokyo Games. Developed through a collaboration with Web3 gaming giant Immutable, 

, a play-to-earn (P2E) game, has a team of over 80 full-time developers and AAA production to produce impressive gameplay.

Its strategic collaboration with Immutable opens up access to the blockchain’s infrastructure, including the Immutable Passport (non-custodial wallet) and the Immutable Global Orderbook for liquidity.

The game’s futuristic storyline takes place in Tokyo, Japan, and comprises three elements: humans, replicants (sentient androids) and BEASTs.

is divided into two systems: BASE and TRIALS.

BASE is for web3 players who leverage BEAST NFTs for a blockchain-based gaming experience. When on the BASE part of the game, you can stake TGT tokens to mint BEAST RAWDISK NFTs. Once minted, you can stake these NFTs to earn rewards. You can create stronger BEAST NFTs in two ways via the LAB feature: breed BEAST NFTs to create a new child BEAST or adjust BEAST parameters according to the battle environment.

 is designed for Web 2.0 players who can win PROXY BEAST, a copy of the BEAST NFT, from gacha and use it to participate in battles for a chance to win TGT tokens and BEAST RAWDISK NFTs.

TOKYO BEAST also lets players participate in prediction games to win TGT tokens. On the BASE system, you can join in prediction games using LUCKY CHIPS, where correct predictions help you earn TGT. LUCKY CHIPS are earned by buying and locking LUCKY TICKET NFTs for as short as a week to two years. The longer the lockup period, the more LUCKY CHIPS the player receives. Meanwhile, players on the TRIALS system can participate in prediction games using TRIALS CHIP, which is obtained by completing daily missions.

You can buy TGT on Bybit’s spot trading platform. To celebrate the listing, Bybit is holding 

 exclusive to the following selected regions in Asia: Japan, Korea, Macau, Taiwan, Brunei, Cambodia, Indonesia, Laos and Vietnam.

A prize pool of nine million TGT tokens is up for grabs for those who participate in the following two events:

Tokyo Games Token is pioneering a new era in Japan’s gaming industry by launching the country’s first AAA web3 gaming ecosystem. At the center of this ecosystem is 

, a P2E game that blends immersive gameplay with blockchain-powered ownership and rewards.

Japan continues to lead in gaming innovation, and TGT brings together the nation’s gaming legacy with decentralized technology’s future. With 

 setting the stage for what's possible in Web3 entertainment, TGT could play a major role in redefining how gamers play, earn and connect digitally.

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Tokyo Games Token (TGT): Japan’s first AAA web3 gaming ecosystem

Bybit has secured a MiCAR license from Austria’s Financial Market Authority, allowing it to operate across all 29 EEA countries.

The S&P 500 rose 0.4% Thursday, but futures dipped Friday as markets eyed the PCE report and renewed tariff uncertainty. Gold rose 0.9% to $3,318.69 on weak job data and a court ruling blocking most Trump tariffs, boosting rate cut hopes. The Coindesk Indices, which tracks the broader crypto market, fell 4.06%, with Bitcoin down 1.16% and Ether up 0.41%, in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today’s top performer is SAFE, up 26.8% following news that Safe is aiming to replace EOAs with modular smart account infrastructure.

Safe (SAFE), founded in 2016, is a modular smart account infrastructure aiming to replace EOAs with customizable smart contract accounts. It focuses on two key components: Safe{Core} for development and Safe{Wallet} for user interaction. 

, delivering a smoother and more transparent signing experience. Key upgrades include the removal of checkbox friction, a smarter combo button for streamlined actions, human-readable and raw transaction data for audits, a unified UI across transaction stages, redesigned sidebar notes for better context, and a complete backend refactor for improved performance and development. The update enhances clarity, speed, and control for all users.

Check out the latest prices, charts, and data of 

, allowing it to operate across all 29 EEA countries. The exchange has also established its European headquarters in Vienna and plans to hire over 100 staff. This move reinforces Bybit’s commitment to compliance and transparency while expanding localized crypto services and supporting blockchain innovation across Europe.

Yesterday, BTC spot ETFs saw a total outflow of $471.9 million, with $107.5 million from GBTC and $364.4 million from non-GBTC funds.

, with all previously earned points retroactively credited to users. Backed by $88.2M in funding, Nansen is a leading on-chain analytics platform offering users the opportunity to earn points—potentially eligible for a future airdrop—by staking tokens like HYPE, SUI, APT, SOL, TRX, ATOM, TIA, NEAR, and STRK. Users can stake through the Nansen platform or directly from their wallets by selecting Nansen as the validator. While sign-up is free, paid members may receive higher rewards due to lower participation.

Beginner

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Bybit sets up EU headquarters in Vienna after securing MiCAR license

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Investing

Curious about recent crypto-related Chapter 11 bankruptcy filings? Find out how it differs from traditional bankruptcies and the crypto implosion that ensued.

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What is a Chapter 11 bankruptcy, and how does it differ from others? Chapter 11 bankruptcy can protect a company, while leaving investors without repayment of debt owed. A crypto bankruptcy repayment plan can vary from other types, especially when debt is considered unsecured. In this article, we’ll define Chapter 11 bankruptcy and examine its effects on the average crypto investor.

Chapter 11 bankruptcy is commonly referred to as “reorganization” bankruptcy. Crypto investors need to know what a Chapter 11 bankruptcy is, and how it can affect them.

Chapter 11 and Chapter 7 bankruptcies might seem similar, but they’re very different. One bankruptcy involves liquidating assets, while the other one reorganizes debts. When a company is in dire financial straits, they can choose between several types of bankruptcies. Chapter 11 and Chapter 7 are the most common types. 

Chapter 7 is often referred to as a "liquidation" bankruptcy, as businesses move past the initial stage of reorganization and focus on selling off their assets. Usually, the bankruptcy court appoints a trustee to ensure all creditors receive payment in the correct order, which follows the rules of absolute property. For example, secured debt takes precedence over any unsecured debt. As a result, secured debts are the first to be paid. Once they’re paid off, the remaining cash and assets are pooled and distributed to creditors with unsecured debt.

On the other hand, Chapter 11 bankruptcy is intended to reorganize a business. It’s a complex form of bankruptcy. Not only are the filing fees expensive for Chapter 11, but the business must head to court several times during the reorganization process. Unlike Chapter 7, Chapter 11 bankruptcy allows the company to reorganize debts, emerging as a healthier business.

Companies that want to file for Chapter 11 bankruptcy must request a bankruptcy court hearing. During this process, the debtor remains in business while trying to stabilize their company. These stabilization efforts may include selling off assets, cutting expenses and attempting to negotiate with debtors. All of these actions remain under the supervision of the court.

Debt is not absolved in a Chapter 11 bankruptcy, meaning the restructuring only changes the debt terms. The debtor must pay back the creditors with future earnings. When a company successfully emerges from Chapter 11, it operates with a newly structured debt. Unfortunately, if Chapter 11 is unsuccessful, the business will file for a Chapter 7 bankruptcy, and the company may then liquidate its assets to pay off debts.

Let’s look at the differences between a Chapter 11 and Chapter 13 bankruptcy filing.

There are fundamental differences between Chapter 11 and Chapter 13 bankruptcies. Filing for Chapter 13 must implement a plan to repay the debts within three to five years. In most cases, the debtor may keep some assets. Chapter 13 bankruptcy filers often pay a monthly amount to a trustee, who then pays the creditors.

Chapter 13 bankruptcies require a trustee. However, Chapter 11 bankruptcies make this optional, and the trustee isn’t needed in most cases. The trustee reviews the bankruptcy proposal, makes recommendations to the court and distributes creditor payments. The Chapter 11 process can often be drawn out, taking several years to complete. Chapter 13 bankruptcy has a shorter approval process than Chapter 11. However, all disposable income must be made available to the trustee for distribution to the creditors during the repayment process.

What Happens During a Chapter 11 Bankruptcy Filing?

All Chapter 11 bankruptcies start with a petition filed in court. To qualify for Chapter 11, the debtor must not have any past bankruptcies deemed "non-compliant" by the courts. With the filing, the debtor must submit an income and expenditure schedule. The business must also list assets, liabilities, unexpired leases and executory (still to be fulfilled) contracts. Once the debtor files the petition, the company assumes the role of "debtor in possession," meaning that it retains control of operations and assets during the reorganization process.

The petition includes the debtor’s following information:

When the court receives the petition, it charges a $1,167 filing fee and an administrative fee of $500. The fee must be paid in whole or as installments to the court.

The company must also file a plan of reorganization and disclosure statement with the court. The reorganization plan will contain the classification of debt claims and the treatment of each one. If the creditor has an impaired claim, the creditors can vote to accept or reject the plan of reorganization through balloting. A creditor's claim is considered impaired when the original terms of the debt change in a negative way, such as lengthening the payout period or reducing the interest rate.

A disclosure statement contains details about the debtor's liabilities, assets and business affairs. This information often allows the court to make informed decisions about the plan of reorganization. After the court has reviewed the disclosure statement and tallied the creditors' votes, it conducts a hearing on confirming or denying the plan of reorganization.

Since the Chapter 11 bankruptcy puts the debtor "in possession," the debtor is responsible for handling several functions, such as accounting for assets, filing reports with the court and examining any objections to claims. With the court's approval, the debtor in possession may employ professionals to help with these duties. These can include auctioneers, accountants, attorneys and appraisers.

Sometimes, a trustee may be required to monitor the debtor's progress in these reporting requirements. If the debtor in possession fails to comply with specific reporting requirements, the trustee may file a motion to dismiss Chapter 11, or have the case assigned to another bankruptcy chapter.

Some businesses may ask, "What is Chapter 11 bankruptcy, and how can it help with current judgments?" During this time, an automatic stay order goes into effect, suspending all foreclosures, collection activities, judgments and repossessions that occurred before the petition. Once the petition is filed, the stay against the creditor(s) immediately goes into effect. As a result, the debtor will have a chance to hold negotiations to resolve any financial distress. In some cases, secured creditors may apply for relief from the automatic stay to foreclose on assets and receive sale proceeds to satisfy their debts.

Once the Chapter 11 bankruptcy is filed, the debtor must have a plan within 120 days. Occasionally, the court can grant another 180 days to receive a confirmation for the plan. The plan's creditor claims are designated into classes for treatment in the reorganization plan. Additionally, the plan lists creditors in order of priority for repayment, with secured debts at the top of the list.

In a Chapter 11 bankruptcy, an entire class of creditors must approve the reorganization plan. At least two-thirds of creditors, or one-half of the allowed claimants, must accept the reorganization plan. Also, it needs to be approved by one class of creditors who have impaired claims. After that, the reorganization plan is considered accepted by the majority of creditors.

Even if a class of creditors objects, the plan may move on, as long as specific requirements are met. The reorganization plan must be equitable and must not discriminate against a particular class of creditors. If there are no objections, the court will confirm the plan, which must comply with the rules outlined for Chapter 11 bankruptcy. After a ruling in court, the plan becomes binding and defines how the debts will be treated.

However, the court may decide not to accept the Chapter 11 bankruptcy reorganization plan. In this situation, the court can either convert the case to a Chapter 7 bankruptcy filing or dismiss it. A rejection of the plan will return the business to the same status as before the filing. With that, creditors may opt for a non-bankruptcy filing to protect their interests.

We’ve described what a Chapter 11 bankruptcy is — but what does it mean for crypto firms? Let’s find out, as some companies have filed for

 or crypto-related Chapter 11 bankruptcies to protect their assets.

What Happens to Existing Investors If a Crypto Firm Files for Bankruptcy?

When a crypto firm files for a crypto-related or Bitcoin Chapter 11 bankruptcy, their stocks and bonds continue to trade on the exchange, allowing them to proceed with normal business operations. Any firm facing a crypto bankruptcy must report its changes to the SEC. With the announcement of a Chapter 11 bankruptcy protection, there’s a risk that shares could lose their value. The announcement of a Chapter 11 bankruptcy may cause a company’s stocks and bonds to plummet, despite the reorganization plan put in place to satisfy creditors. 

Unfortunately, investors are the least protected entity in a crypto bankruptcy. Custodially held crypto assets are considered the property of the bankrupted firm. In a crypto bankruptcy, the asset may be subject to bankruptcy proceedings. In other words, customers could be treated as unsecured creditors. As such, these investors have little or no resources to recover their cryptocurrency or the equivalent cash balance in the event the firm goes bankrupt.

Chain of Events That Led to the Recent Crypto Implosion

News of any crypto bankruptcy often shakes investors. While cryptocurrencies have hit all-time highs over the past couple of years, there’s been a downturn of approximately 75% over the last few months. Crypto Chapter 11 filings have created fear in the market.

Terra Ecosystem Experiences Unparalleled Growth

At one time, Terra (LUNA) was the most successful blockchain platform. Its native token,

, benefited from the growth of the stablecoin known as

 ecosystem started to gain mainstream popularity with many investors. In 2021, LUNA traded at an all-time high of $199. Additionally, the entire Terra DeFi ecosystem was valued at $45 billion.

With Terra’s unprecedented gains, a crypto bankruptcy wasn’t even on the radar for most investors. Many believed Terra would never head toward a crypto bankruptcy with its unprecedented gains. However, there were other indicators that the crypto market was headed for turbulence.

While Terra experienced unparalleled growth, there were signs of cracks in the company. Few people knew that these signs would cause a shift in the entire crypto market.

 closed down the company on May 4, 2022. This action took place days before the collapse of UST and LUNA. After a general shareholder meeting on April 30, 2022, Terraform Labs Korea dissolved its branches in Seoul and Busan. Do Kwon was listed as the liquidator in the crypto bankruptcy filings. After that, the platform began to face more challenges in the market.

The TerraUSD stablecoin, UST, briefly lost its peg to the U.S. dollar, falling to $0.987 on May 8, 2022. UST was once known as the largest

, and some investors considered it the backbone of the crypto economy. Unfortunately, UST lost its peg after the team embarked on a bid to build its

 and Bitcoin reserves. Depegging often occurred when investors made significant withdrawals from

, a lending market that offers high yields to users who deposit UST. Large quantities of UST were also withdrawn from liquidity pools, including withdrawals made by Terraform Lab’s creators.

Panic Withdrawals Cause LUNA and UST to Plummet in Value

After these events, LUNA and UST prices rapidly lost between 70% to 99% of their value. Terra had focused on building its reputation and fame in the stablecoin space, but its price plummeted after the depegging. Unlike most other stablecoins, which are backed by

, UST was backed by an algorithm that maintained its price. To support UST, LUNA had to be minted. As panic set in, investors and traders quickly sold their UST for other currencies, creating a stunning price fall for both UST and LUNA.

Crypto Entities State ‘Extreme Market Conditions’ as Main Reason to Halt Withdrawals

The debacle with LUNA and UST caused panic in the market. In some cases, these extreme market conditions put a halt to withdrawals. When news of the LUNA and UST fiasco hit, the company paused all withdrawals to avoid causing more pain to the fragile market.

 has been one of the most prominent players in the crypto lending space, with over $12 billion in assets and $8 billion in assets lent to clients. However, the move raised concerns about its solvency as the value of its assets fell by half in less than six months. Celsius is the biggest holder of CEL, which has seen 97% of its value erased. Many wondered if Celsius was going to be the next firm to file a crypto bankruptcy, which they eventually did on July 13, 2022.

Major Firms Are Caught Off Guard With News Leaks of Exposure to Terra Ecosystem 

The implosion of the Terra ecosystem caught many of the major crypto platforms off guard, leaving them to wonder about the possibility of more Chapter 11 bankruptcy filings for crypto firms. Only months earlier, UST had been the leading stablecoin in the market. The situation with LUNA and UST sent the crypto market into a tailspin. Like Celsius, many significant firms sought ways to reduce the pain in the crypto market. While these stops may have helped stabilize the market in the short term, they’ve also led to uncertainty and the fear of another crypto bankruptcy announcement.

Hedge Funds, Brokerages and Lending Platforms Face Insolvency Risks

The Terra ecosystem’s weaknesses have highlighted other problems in the crypto marketplace, leading to fear of more Chapter 11 filings. While many crypto lending platforms, hedge funds and brokerages had looked like can't-miss investment opportunities, the past two months have shown that some of them are at risk of insolvency. When these entities file for crypto bankruptcy, there’s hardly any protection for investors, further compounding investors’ fears.

Major Crypto Firms That Have Filed for Chapter 11 Bankruptcy Protection

Along with the woes of the Terra ecosystem, other major firms have filed for their own crypto bankruptcies. Some of these firms include:

Three Arrows Capital (3AC) has backed many projects, including holding approximately $200 million in LUNA coins. With the broad decline in the market, LUNA's prices fell. As a result, 3AC failed to meet its margin call and 

 from Voyager Digital. While Three Arrows Capital didn’t officially file for a crypto bankruptcy, its liquidation was ordered by the court in the British Virgin Islands on June 27, 2022. 

The actions of Three Arrows Capital may have been the cause of

's own crypto bankruptcy. Voyager Digital needed to protect its assets after Three Arrows Capital 

. The service suspended all withdrawals and trades on the platform days before the crypto bankruptcy filing. At the time of its Chapter 11 bankruptcy filing on July 6, 2022, the company held between $1 billion and $10 billion in assets and liabilities.

On July 13, 2022, the Celsius network filed for Chapter 11 bankruptcy. Problems for the company have resulted from the crypto bankruptcy concerns of Three Arrows Capital. The value of CEL, the currency issued by Celsius Network, has significantly plummeted, leading to more problems for Celsius. The fintech platform had claimed it held $167 million in cash, but Chapter 11 bankruptcy court documents indicate a $1.2 billion shortfall.

On November 6, 2022, FTX, one of the largest crypto exchanges, was rumored to have artificially inflated its balance sheet due to overleveraging on its token,

 This created fear that FTX was facing liquidity issues, causing a bank run by its users. This eventually led to the exchange’s pausing of withdrawals on November 8, 2022. On November 11, FTX — together with its trading company, Alameda Research — filed for Chapter 11 bankruptcy, immediately facing almost $8.8 billion in total liabilities. The new FTX CEO, John J. Ray III, has taken command and will be overseeing the bankruptcy process. Ray previously oversaw the bankruptcy of 

Some other firms had exposure to Three Arrows Capital, while one firm had exposure to FTX and Alameda Research. This means they may face a crypto Chapter 11 filing and are at risk of insolvency. A few examples of these firms on the edge of crypto bankruptcy include the following.

Babel Finance, a crypto financial service provider, has temporarily suspended the redemption and withdrawals of crypto assets after the lender failed to pay its clients. Many investors wonder if the company can remain solvent, or must face a crypto bankruptcy.

BitMEX, a crypto trading platform, was on the verge of releasing its token, the BMEX. However, with unfavorable market conditions, the company has decided to postpone the release.

After a counterparty failed to meet a $47 million margin call, CoinFLEX, a crypto platform for earning and trading crypto, halted all withdrawals on June 23, 2022. The company has reopened, but is only allowing investors to withdraw 10% of funds; the remaining funds are listed as locked. Some experts in the crypto industry have wondered whether CoinFLEX is keeping these funds for a potential Chapter 11 bankruptcy filing.

With its exposure to Three Arrows Capital, Finblox, a crypto digital asset platform, imposed a $1,500 withdrawal limit on customers. However, the company plans to raise the limit to $50,000 in the coming weeks for verified users.

According to reports, Genesis Global Trading, a noncustodial crypto OTC market-maker, experienced hundreds of millions of dollars in losses due to its exposure to Three Arrows Capital. Fortunately, Digital Currency Group, its parent company, has helped shield Genesis from some of these losses, preventing a crypto bankruptcy.

, was exposed to counterparty risks and is potentially facing insolvency. It supposedly received financial assistance from FTX and has also paused customer withdrawals.

. It’s also in the process of seeking financial help from other organizations, such as Binance.

Crypto bankruptcy is not uncommon in these uncertain times. Platforms, hedge funds and firms teetering on the brink of insolvency can make any investor nervous. While most investors know what a Chapter 11 bankruptcy is, they may not understand what a crypto bankruptcy can do to their assets. Sometimes, investors may be deemed unsecured debtors, with no means to reclaim any of their digital assets. While understanding what a Chapter 11 bankruptcy is may not lead to recovery of everyone’s funds, it’s important for any investor seeking knowledge and empowerment to become better informed in the days ahead.

Crypto Chapter 11 Bankruptcies in 2022: What You Need to Know

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