Three years after FTX’s shocking downfall, the cryptocurrency industry continues to rebuild its credibility through proof-of-reserves and transparency reforms. But for many of the exchange’s former customers, the wait for repayment remains long and frustrating.
The fallout that changed everything
When FTX filed for bankruptcy on November 11, 2022, the event became one of the most significant shocks in crypto history. Billions in market value evaporated overnight, leaving both retail and institutional investors questioning the reliability of centralized exchanges. The contagion that followed affected liquidity providers, venture funds, and even competitors, exposing the fragility of trust in crypto markets.
The collapse also sparked intense regulatory scrutiny and industry introspection. Exchanges began racing to prove solvency, while governments debated how best to prevent another systemic failure. Although sentiment has recovered since then, scars from the collapse remain visible in how crypto platforms now approach risk management and public accountability.
Exchanges forced to prove solvency
In the weeks after the bankruptcy, centralized exchanges saw users withdraw over $20 billion, according to CoinGecko data — a testament to the fear FTX had unleashed. To restore confidence, major exchanges, including Binance, OKX, Deribit, and Crypto.com, released proof-of-reserves reports to show that user deposits were fully backed.
However, these efforts weren’t without criticism. Many reports relied on snapshots rather than continuous audits, leading experts to question their reliability. Industry voices, including analysts like David Gokhshtein, pointed out that transparency meant little without full visibility into liabilities. Despite these flaws, proof-of-reserves became a new standard for CEX credibility and a key factor in user trust.
DeFi’s rise as a transparency model
The FTX implosion also strengthened the argument for decentralized finance (DeFi), which operates on transparent smart contracts rather than custodial systems. DeFi platforms like dYdX have since emphasized governance, transparency, and risk control — values that gained traction among users seeking self-custody solutions.
Eddie Zhang, president of dYdX Labs, told Cointelegraph that the collapse pushed DeFi projects to adopt more robust frameworks. “Governance is becoming more sophisticated,” he said, adding that DeFi now operates under principles that can withstand extreme market shocks. The shift reflects a growing user preference for self-custody and verifiable transparency over trust-based centralized solutions.
Creditors still waiting for repayment
While the crypto ecosystem continues to mature, some FTX creditors are still waiting for their funds. According to creditor representative Sunil Kavuri, roughly $7.1 billion has been distributed across three rounds of payments so far, including a $5 billion payout in May 2024 and another $1.6 billion in September. A fourth round is expected in early 2026.
Yet, repayments are being made in U.S. dollars instead of crypto, leaving creditors short of the market rebound. Bitcoin, which traded around $16,800 when FTX collapsed, now exceeds $103,000 — meaning many creditors missed out on massive unrealized gains. Kavuri estimates that actual recovery rates, when adjusted for current crypto prices, could be as low as 9–46%.
SBF’s future uncertain as appeal continues
Meanwhile, FTX founder Sam Bankman-Fried is serving a 25-year sentence after being convicted of fraud and conspiracy. His legal team has appealed the ruling, claiming that evidence proving FTX’s solvency in 2022 was unfairly excluded. The U.S. Court of Appeals heard his case on November 4, but legal experts suggest the odds are stacked against him.
Prediction market Polymarket currently gives just a 4% chance of a presidential pardon in 2025. Former Alameda Research CEO Caroline Ellison, who cooperated with prosecutors, began her sentence in late 2024 and is expected to be released in mid-2026 — a reminder of how far-reaching the fallout from FTX remains even years later.