By Refund Agency.
In late 2022, the cryptocurrency world was rocked by the collapse of FTX, a platform once regarded as one of the most trusted centralized crypto exchanges. At its peak, FTX had an estimated valuation of $28 billion, processing millions in daily trading volume and serving over 800,000 users globally.
But in just a matter of days, FTX filed for bankruptcy, froze withdrawals, and triggered one of the most devastating confidence shocks in crypto history. Its downfall revealed a mix of financial mismanagement, regulatory blind spots, and customer asset misuse — leaving many traders unsure whether they’ll ever see their money again.
Here’s a full breakdown of what happened, what has changed since, and how this impacts crypto traders and investors going forward.
The Fall of a Giant: What Happened to FTX?
FTX was founded by Sam Bankman-Fried (SBF), a former trader who quickly became a central figure in the crypto space. The platform was known for offering leveraged products, advanced derivatives, and a slick user experience.
However, behind the scenes, a lack of internal controls and poor separation between FTX and its sister company Alameda Research ultimately led to its downfall. In just over a week, a liquidity crunch turned into a full-scale collapse.
Timeline of the FTX Breakdown
- Nov 6, 2022: Binance announces plans to sell $530 million in FTT tokens, citing concerns over solvency
- Nov 7–8: FTX seeks emergency financing after processing $6 billion in withdrawal requests
- Nov 9: Binance walks away from a potential bailout after internal review
- Nov 10: Authorities in the Bahamas freeze assets tied to FTX Digital Markets
- Nov 11: FTX files for Chapter 11 bankruptcy in the U.S.; leadership transferred to a restructuring expert
- Nov 12–14: A suspected hack drains an additional $395 million from company wallets
- Following weeks: Over 50 affiliated FTX companies are included in bankruptcy proceedings
The Ripple Effects for Traders and the Market
The fallout from FTX’s collapse sent shockwaves across the industry:
- Over $180 billion was wiped from the global crypto market within two weeks
- Roughly 72% of FTX’s customers have not regained access to their funds
- Other platforms like BlockFi, Voyager, and Genesis temporarily froze operations or filed for bankruptcy
- Institutional traders and hedge funds pulled out billions, reshaping liquidity across the sector
Retail investors — many of whom had trusted FTX with personal savings — were left without answers. For many, this event has altered how they view the safety of centralized platforms and the need for independent custody of crypto assets.
Where Does FTX Stand Now?
As of Q1 2024, the newly appointed restructuring team claims to have recovered approximately $8.9 billion in various crypto and fiat assets. This represents a significant increase from the $1.4 billion initially secured during the early bankruptcy phase.
However, most of these assets are subject to legal claims, clawback efforts, and valuation disputes — meaning actual distributions to creditors and traders are still months, if not years, away.
FTX’s leadership has hinted at a potential revival of the platform in some form, though it’s unclear whether that would include new investors, a rebranding, or debt repayment through equity issuance.
Key Lessons From the Collapse
The failure of FTX serves as a critical reminder for traders and regulators alike:
- Reputation does not equal security — even the biggest names can fall
- Lack of regulation = increased risk
- Custody matters — holding assets on exchanges comes with vulnerabilities
- Recovery is possible, but slow — and often depends on where your funds were stored
The incident has already prompted global responses. Countries like the UK, Australia, Germany, and Japan are tightening crypto oversight, while the EU’s MiCA regulation is fast-tracking implementation. The U.S. SEC and DOJ continue to pursue legal action against individuals and entities involved.
Can FTX Users Still Recover Their Funds?
The recovery landscape remains complex. While some large institutional creditors have already negotiated recovery plans, many retail traders are still waiting for clarity.
At Refund Agency, we specialize in assisting victims of crypto-related fraud, platform collapses, and unregulated exchanges. If your funds were tied to FTX or another failed entity, our case team can:
- Trace on-chain wallet activity
- Prepare recovery evidence for bankruptcy claims
- Coordinate with legal counsel on behalf of affected parties
- Help protect any remaining assets from future risk
Take Action Today With Refund Agency
The FTX collapse has become a turning point in crypto history — exposing vulnerabilities but also pushing the industry toward transparency, accountability, and investor protection.
If you’ve lost money on FTX or another exchange, don’t wait. Every day matters in complex recovery cases.
📩 Schedule a free case review with Refund Agency today — no commitment, no upfront costs.