State-corporate crime in cryptocurrency markets: governance failure and insider abuse in Terra-Luna and FTX

Purpose This study aims to examine how governance design and regulatory fragmentation combined to enable the collapses of Terra-Luna and FTX and asks when state inaction in cryptocurrency markets can properly be analysed as state-facilitated corporate crime rather than ordinary regulatory lag. Design/methodology/approach A qualitative comparative case study of the two platforms, based on a documented inventory of criminal, civil, regulatory and bankruptcy records from 2022 to 2025, coded across three dimensions: governance architecture, insider abuse and state response. Findings Both platforms concentrated discretionary control in their founders and operated without independent oversight, reliable financial reporting or capital segregation, yet they failed through mechanisms specific to their designs: custody misuse in a centralised exchange at FTX and stability and reserve misrepresentation in an algorithmic stablecoin system at Terra-Luna. Applying four proposed criteria that distinguish regulatory lag from state facilitation, the state’s role in the FTX case approaches facilitation, while Terra-Luna sits closer to lag. Victims in both cases faced a structural remedy deficit that bankruptcy distributions have only partially and unevenly mitigated. Originality/value To the best of the authors’ knowledge, the article offers one of the first criminological analyses of the 2022 cryptocurrency collapses, grounded in state-corporate crime theory; specifies the boundary between regulatory lag and state facilitation; and conceptualises governance architecture as criminogenic infrastructure.