Support 110 years of independent journalism.

  1. The Staggers
30 December 2022

Was 2022 the year we reached peak scam?

From faulty bio-tech to collapsed crypto networks, the past few years have witnessed many business bubbles burst.

By James Snell

The past few years have proven a golden age of fraud. Part of that is due to Covid. Pandemic times have always led to fraudulence. Con artists used to sell snake oil as a miracle cure, after all. The Covid pandemic was no different – with essential oils and unlicensed medicines making the unscrupulous rich.  

But another consequence of the Covid times was purely financial: the sloshing around of immense amounts of capital – trillions in stimulus cash and cheap borrowing – which desperately sought increasingly outlandish returns. 

Much of that money was invested in what now seem unwise ways. Money piled into the housing market, inflating that bubble further. It was invested in the crypto world – driving a very temporary boom in ugly NFTs which, holders were assured, would keep their value until the heat death of the universe.  

And it tied many ordinary investors, and even the “smart money”, to crypto coins such as Terra/Luna (which both disintegrated this year), and now-insolvent firms such as VoyagerCelsius and more – all of which collapsed in value in 2022.  

All of this was overshadowed by the eventual insolvency of the crypto exchange FTX in November – advertised to millions as the “safe and easy way” to speculate on a wildly unsafe thing. FTX is now bankrupt – and an estimated $8bn of customer money is missing. The cryptocurrency exchange’s CEO, Sam Bankman-Fried, went from being the habitué of Washington meeting rooms to being charged with fraud in the US (charges which he denies). John Ray, the lawyer and insolvency expert who has been appointed to liquidate FTX, has said it is the worst case of corporate failure he has seen for 40 years – and he oversaw the liquidation of the energy company Enron. 

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.

For two decades central bank interest rates have been historically low. Now inflation has arrived and ruined everyone’s fun. Bank rates are rising, debt is becoming hard to service, and frauds are no longer able to pretend all is well.  

Insolvent companies used to be able to borrow their way out of trouble. Now they cannot. And their bad loans are coming due. This might seem good – almost karmic. But the money of ordinary customers has also been lost, and many may never recover their investments.  

This year has also brought the conviction and sentencing of other high profile business frauds. Elizabeth Holmes was once feted as the youngest self-made female billionaire. But her company, Theranos, never did what it said it could. Questions over the validity of Theranos’ technology first arose in 2015, and the company was eventually dissolved in 2018. Holmes was convicted of fraud in January, as was her former business partner Sunny Balwani. 

For so many years, money has piled into risky areas of the world economy in desperate hope of a return. And so frauds have prospered. Even now, with so much good capital still chasing unreasonable outcomes, so many frauds still survive. Many bubbles remain, for the moment, unburst. 

[See also: Two years on, our trade deal with the EU is a rotten turkey]

Content from our partners
What you need to know about private markets
Work isn't working: how to boost the nation's health and happiness
The dementia crisis: a call for action