Major Failures: A Reference Timeline

Entry last verified August 2026. Categories and causes rather than a complete list.

The categories

Category	Cause	Typical scale
Exchange insolvency	Commingled assets, unsecured lending, maturity mismatch	Largest
Bridge exploit	Contract flaw or key compromise in a large-balance system	Very large
Lending platform failure	Unsecured institutional lending, concentration	Large
Algorithmic stablecoin collapse	Design failure under stress	Very large
Protocol exploit	Contract logic, oracle manipulation, access control	Variable
Individual losses	Phishing, approval drains, key loss	Large in aggregate, invisible individually

The recurring causes in exchange failures

Every major exchange failure has involved some combination of: customer assets used for purposes customers did not know about, lending without adequate collateral, concentration with a small number of counterparties, and inadequate records.

None of those are novel technology failures. They are conventional financial failures with long histories in other markets.

What changed afterwards

Reserve attestations became standard. An improvement, with the limitation that assets without liabilities is half a balance sheet.

Unsecured institutional lending largely ended. The most substantive change.

Custody separated from trading for institutional participants.

Regulatory frameworks arrived in major markets, imposing capital requirements, segregation and supervision.

What did not change

Concentration among a few venues and custodians. The incentive structure pushing venues toward volume. And retail users leaving balances at platforms in amounts larger than a working balance justifies.

The individual-level lesson

The defence that would have prevented customer losses in every exchange failure is the same one: hold long-term positions yourself, and keep only a working balance at a venue.

That rule required no foresight about which platform would fail. It worked in every case and it continues to.

The practical criteria for a working balance venue

Authorised where you live, checkable in the public register. Client assets segregated per the terms of service. Withdrawals that process reliably. Account security beyond SMS. A published fee schedule.

Platforms meeting all five, such as a regulated European platform, are appropriate for the tier they are for, which is buying and rebalancing rather than storage.

The reading recommendation

The first-day declaration in any major bankruptcy filing. They are public, readable, and each describes in detail how an apparently solid firm was not.

One is more instructive about what to look for than any amount of commentary.