The crypto winter of 2022 will be remembered as time when one event after another seemed intent on killing crypto for good, but in fact proved to be nothing more than a shake-up and removal of badly run companies and concepts leaving the crypto industry healthier and more ready than ever for the next cyclical upturn.

It is hard to pinpoint exactly when it all started to go wrong, but it is reasonable to say that the fall of Terra’s UST Stablecoin back in May last year was the first major step on the path to an industry wide contagion that led to collapse of major industry leaders such as Celsius and FTX.

Hindsight is a wonderful thing and there are many experts with smug smiles that say, ‘I told you so’. I am one of them. But really, we do not need hindsight to show us that the market acted recklessly without regard for even basic due diligence or corporate governance. Uncollateralized lending connected to a Stablecoin that was promising as much as 20% APY on a valuation of $40bn; $8bn a year just to pay the APY. But companies were desperate to pay higher APY to their millions of depositors. It was an offer too good to be true but many still took it. And then when things went wrong, the domino effect moved into gear. The number of companies that fell is in fact surprisingly small, and there are probably a few still holding on by their fingernails waiting for the next market upturn to fill some sizable holes.

And yet, the market held reasonably steady and since the start of this year, it is back to a level bigger than before Terra. But that does not mean everything is back to pre Terra days. We have to hope that lessons have been learnt and I believe in the main, that they have.

Firstly, the regulators have gotten in on the act. Slow out of the blocks but now full steam ahead. There is no consensus of approach, but it is clear that the US and Europe are on different paths. The former seems to want to put as many people off from crypto as it can, whilst the latter is trying to sensibly put in frameworks that ensure that crypto is a core component of future monetary policy. But it could be said that all regulation is a good sign as it shows that this is now something that is big and needs to be controlled. It is no longer ‘ignore it and it might go away’ approach. And with regulation comes confidence.

But regulation alone is not enough. Regulators are not auditors, they cannot see what is going on inside each and every company, therefore it needs companies to do their own jobs properly and to introduce tried and tested business processes, apply strong corporate governance, practice common sense due diligence.

At Choise.com we believe that we have applied all of these things since day one. We were one of the first companies to obtain full crypto registration in the UK. We have never leant money uncollateralized. We only work with instant access earing solutions so that funds are never tied up, and we never allocate more than 2.5% of our funds to any single institution (our OPEX banking partner being the one exception). If there are any signs of a market problem, we can therefore instantly respond to what is happening, and if the size of the problem is so big that even an instant response was not enough, the impact on our total at less than 2.5% is not a major headache.

The past 12 months or so has shown that the industry is here to stay. This is not the first crypto winter, nor will it be the last. But this one removed the market of ‘bad actors’ something every industry goes through during its formative years. And hopefully it has taught us all the old lesson that if something looks too good to be true, it probably is.

Looking to the future, the leading companies will be those that apply sound business practice and a good dose of common sense. I believe the next crypto summer is just around the corner, and this time, I believe the industry is better prepared to manage growth sensibly, and not go after unrealistic returns.

Choise.com is a leading crypto firm and earn marketplace.

Through extensive expertise and cutting-edge technological solutions in crypto trading, exchange and payment processing, Choise.com is developing the first-of-its-kind unified, integrated ecosystem which includes the App, DeFi platform Charism and other products. It combines the aspects of profitability and reliability from income-gaining solutions such as staking, yield farming, liquidity pools, interest accounts, etc., thereby blurring the line between DeFi and CeFi and improving their ease-of-use. Trusted by nearly 1,000,000 individuals and institutions around the worldwide, Choise.com has become one of the leaders in the industry, operating in more than 170 countries.