💥 Review of the FTX Collapse (2022)

——The Complete Collapse of the Trust System in Centralized Exchanges

I. Before the FTX Collapse: It Seemed "Almost Perfect"

Before the collapse, FTX was regarded as one of the safest and most professional exchanges in the crypto industry:

  • Founder SBF frequently appeared in mainstream media
  • Emphasized compliance, risk control, and institutional friendliness
  • Maintained close relationships with multiple venture capitals and political figures

FTX was not just a trading platform, but more like the "financial infrastructure" of the crypto world.

II. The Real Problem: It Did Everything an Exchange Shouldn't Do

The core risks of FTX were not complex, but rather severe role misalignment:

  • User assets were transferred to the affiliated company Alameda Research
  • Customer funds were used for high-risk trading and leveraged operations
  • The platform token FTT was used as collateral, forming an internal loop

This was not a technical vulnerability, but institutional misappropriation.

III. The Trigger Point: Confidence Collapsed Faster Than Any Bank Run

In November 2022, the market began to question Alameda's balance sheet structure:

  1. Alameda's assets were highly dependent on FTT
  2. FTT had insufficient liquidity but was overvalued as a "core asset"
  3. After the sell-off information was disclosed, it triggered market panic
  4. Users concentrated withdrawals, and FTX was unable to pay

👉 Within just a few days, the world's second-largest exchange directly halted operations.

IV. Why Did FTX Collapse So Quickly?

The speed of FTX's collapse stemmed from three fatal assumptions:

  • ❌ "Users won't withdraw at the same time"
  • ❌ "Platform tokens will always have value"
  • ❌ "Reputation can substitute for audits"

When trust fails, centralized platforms have almost no buffer space.

V. Chain Reaction: More Profound Than Mt. Gox

The impact of the FTX collapse far exceeded a single platform:

  • BlockFi, Genesis, and other institutions successively fell into crisis
  • Funds from multiple funds and projects were frozen
  • Market trust in CEX plummeted

👉 Proof of Reserves (asset proof) first became an industry consensus demand.

VI. Core Lessons FTX Left for the Industry

  • "Compliance narrative" cannot substitute for transparency
  • Centralized exchanges are not banks
  • User asset isolation is the baseline, not an extra point

The FTX incident made the entire industry re-understand an old saying:


Not your keys, not your coins.