Some of the largest FinTech insolvencies took place in 2022 with Crypto trading companies taking the top spots. Overall 2022 has been a challenging year for FinTech with funding and activity both dropping globally, major FinTech countries such as Germany saw a 24% drop in FinTech companies raising funds in 2022.
FTX, a crypto exchange, was the most well funded company to turn insolvent last year after raising a total of $1.8bn between 2018 and 2022 which included 39 investors. Their latest venture round from Naomi Osaka took place in March 2022. FTX’s collapse took place over a 10-day period in November 2022. The catalyst was a November 2nd scoop by crypto news site CoinDesk that revealed that Alameda Research, the quantitative trading firm also run by Bankman-Fried, held a position valued at $5 billion in FTT, the native token of FTX. The report disclosed that Alameda’s investment foundation was also in FTT, the token that its sister company had invented, not a fiat currency or other cryptocurrency. That prompted concern across the cryptocurrency industry regarding Bankman-Fried’s companies’ undisclosed leverage and solvency. Bankman-Fried is currently facing prosecution in the USA and has entered a not guilty plea with the trial being held in October 2023.
Across all industries, more companies suffered insolvency last year in England and Wales than any time since 2009, government figures showed on 31st January, reflecting the end of coronavirus pandemic support that helped many smaller businesses stay afloat. Total insolvencies rose to 22,109 in 2022, their highest since the global financial crisis and up by 57% from a year earlier, according to data released by the British government’s Insolvency Service agency.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2023 FinTech Global