Will this be Starmer’s toughest term yet?
When FTX filed for bankruptcy on Nov. 11, 2022, it sent shockwaves throughout the crypto world, erasing billions in market liquidity and shattering confidence in centralized exchanges.
The dramatic collapse became a turning point for the digital asset industry, triggering calls for stronger transparency and reactions from regulators.
Three years after the exchangeâs collapse, transparency initiatives across the crypto industry have proliferated. Proof-of-reserves attestations, audits and onchain analytics represented progress. Still, many of those reforms remain works in progress, and some of FTXâs creditors have yet to be made whole.
CEXs forced to adjust post FTX
Centralized exchanges bore the full impact of the post-FTX crisis of confidence. In the weeks following the bankruptcy, users withdrew more than $20 billion from major trading platforms, according to CoinGecko data.
In response, exchanges began publishing proof-of-reserves (PoR) attestations to demonstrate solvency. Binance released its first report on Nov. 10, 2022, followed by a Merkle Tree-based report a few days later that allowed users to verify its Bitcoin (BTC) holdings.
Around that time, OKX, Deribit and Crypto.com all published proofs-of-reserve amid fears of contagion and uncertainty surrounding crypto exchanges.
While these efforts offered some visibility into reserves, most relied on snapshots rather than continuous audits and often drew criticism from the crypto community.
One X user, David Gokhshtein, said at the time that publishing proof-of-reserves wasnât enough. âWhen you arenât showing the companyâs liabilities, it means nothing,â he wrote.
Thomas Perfumo, Krakenâs global economist, told Cointelegraph that the âhard lessons of the past were never an indictment of crypto,â adding that the FTX debacle reinforced the âgovernance and integrity matter.â
Decentralized finance protocols also adapted following the collapse, pushing calls not only for transparency but also for self-custody as an essential safeguard for crypto users.
âWeâve seen a notable shift,â Eddie Zhang, president of dYdX Labs, told Cointelegraph. According to Zhang, DeFi now operates under stronger risk frameworks while âgovernance is becoming more sophisticated,â with systems that âwithstand market shocks.”
Related: FTXâs 2-year repayment delay is a âwin,â claims trader who predicted FTXâs collapse
Creditors still waiting for closure
Despite the industryâs transparency campaigns and recent regulations, such as the GENIUS Act in the United States and the European Unionâs Markets in Crypto-Assets Regulation, some FTX creditors have yet to recover their losses.
According to a Nov. 9 update by Sunil Kavuri, a FTX creditor representative, the exchange has distributed $7.1 billion to creditors across three rounds so far.
In January, FTX announced the distribution of more than $1.2 billion in repayments to creditors who fulfilled certain requirements before Jan. 20. However, according to Sunil, only $454 million was effectively paid in the first round, going to small claimants with balances under $50,000.
A larger $5 billion payout followed on May 30, while the latest round took place on Sept. 30 and distributed another $1.6 billion to creditors. The next distribution is expected in January 2026, though it has not been confirmed by the FTX estate.
FTXâs total recovered assets were estimated at about $16.5 billion in October 2024.
According to Kavuri, because repayments are being made in USÂ dollars rather than in-kind crypto assets, creditors are missing out on the marketâs rebound since 2022.
Bitcoin, valued at $16,797 the day after FTX filed for bankruptcy, was trading around $103,000 on Tuesday.
Even with cash repayments exceeding the original claim amounts, real recovery rates could range from 9% to 46% when adjusted for current crypto prices, Kavuri said.
Related: FTX drops ârestricted countriesâ motion but warns it may refile
SBF looks for a lifeline
Former FTX CEO Sam Bankman-Fried is serving a 25-year prison sentence for fraud and conspiracy but has appealed his conviction, arguing that he was denied the presumption of innocence and barred from presenting evidence that FTX was, in fact, solvent in November 2022. His legal team appeared before the US Court of Appeals for the Second Circuit on Nov. 4.
Prediction market Polymarket currently assigns only a 4% probability that Bankman-Fried will receive a presidential pardon in 2025. Former Alameda Research CEO Caroline Ellison, who cooperated with prosecutors, began serving her sentence in late 2024 and is projected to be released in mid-2026.
Magazine: Good luck suing crypto exchanges, market makers over the flash crash
John Deaton, a lawyer who advocates for XRP holders and ran against Massachusetts Senator Elizabeth Warren in the 2024 US election, is making another bid for Congress.
At a Monday event in Worcester, Massachusetts, Deaton announced that he would run for US Senate again in 2026, this time attempting to unseat Democratic Senator Ed Markey. The lawyer ran as the Republican candidate in 2024, losing to Warren, a Democrat, by about 700,000 votes.
âIâm winning this time,â Deaton said in a campaign video aired at the Worcester event.
Deaton, who said he will run as a Republican to unseat Markey, will likely face competition on both sides of the aisle in 2026. His campaign announcement did not specifically focus on digital asset policy, but he and Warren had previously clashed over their respective views on crypto.Â
Related: XRP Army made a difference in Rippleâs SEC lawsuit: Crypto lawyer
Deaton gained widespread recognition in the crypto industry by advocating on behalf of XRP (XRP) holders in Ripple Labsâ legal battle with the US Securities and Exchange Commission (SEC).
Seth Moulton, who represents Massachusettsâs 6th Congressional District in the US House of Representatives, is a Democratic contender in the 2026 race. Markey, who will be 80 next year, voted against the passage of the GENIUS stablecoin bill and has called out crypto mining for its âextravagant electricity use.â
Looking at a repeat of 2024?
âWeâre never going to not be excited about someone advocating for [crypto] policy,â Mason Lynaugh, community director of Stand With Crypto, told Cointelegraph. âHeâs going to have his own voters heâs going to cultivate that are very excited to see someone like him saying these types of things publicly.â
Itâs unclear what Deatonâs chances would be in a US state that typically swings to the Democrats.
During his previous Senate campaign, cryptocurrency executives from Ripple, Gemini and Kraken supported Deatonâs run, contributing more than $360,000 in the first quarter of 2024.
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