I can take a box containing 1001 conkers, sell one to you for $1000, then claim that I have $1m in my bucket.
What was lost was not money, but electronic conkers of which a small number people paid real money for.
The currency was USDC, which is a stablecoin pegged at $1 by Circle (www.circle.com) who are generally held to be reputable, so it very much was real money.