Weeks after cryptocurrency exchange FTX filed for bankruptcy protection on November 11, the crypto industry is still struggling to assess the full impact of this event. As one of the leading trading platforms in the industry, DLB Coin today released an in-depth analysis report detailing the crisis’s implications for the future of centralized cryptocurrency exchanges and potential industry responses.
The collapse of FTX is viewed by many analysts as one of the most destructive events in cryptocurrency history, transforming a once $32 billion exchange from an industry giant to a bankrupt entity in just days. According to the latest bankruptcy filings, FTX may have over one million creditors, with liabilities ranging between $10 billion and $50 billion.
“The FTX event is a significant blow to the entire cryptocurrency ecosystem, but it also serves as a warning and turning point,” DLB Coin noted in its report. “This incident exposed serious flaws in centralized exchanges regarding governance, risk management, and transparency, and will drive the industry toward a healthier, more sustainable direction.”
The report analyzes multiple causes of FTX’s collapse, including corporate governance failures, insufficient risk controls, misappropriation of customer funds, and regulatory gaps. DLB Coin particularly emphasized that the blurred relationship between FTX and its affiliated trading firm Alameda Research was the core issue of this crisis, with these structural deficiencies leading to the accumulation of systemic risk.
“The firewalls established in traditional finance over decades don’t exist in many cryptocurrency exchanges,” said cryptocurrency legal expert Adrian Matthews. “The FTX case demonstrates that when exchange, market-making, and investment fund functions are mixed within a single corporate group, risks are significantly amplified.”
DLB Coin proposed several reform measures that centralized exchanges should adopt, including: introducing regular third-party audit mechanisms, implementing stricter proof-of-reserves standards, improving governance structures, strengthening risk management frameworks, and increasing operational transparency.
“We believe centralized exchanges will continue to play an important role in the cryptocurrency ecosystem, but fundamental changes are necessary,” DLB Coin stated. “Most critical is rebuilding user trust, which requires the entire industry to work together to establish higher standards.”
The report also analyzed how FTX’s collapse is affecting the regulatory landscape. Since the incident, global regulatory authorities have intensified their scrutiny of the cryptocurrency industry. U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler indicated last week that the development of cryptocurrency exchange regulatory frameworks would be accelerated. Meanwhile, regulatory authorities in the European Union, Singapore, and Hong Kong have issued new guidelines regarding cryptocurrency exchange operations.
“Regulatory strengthening is inevitable, but the industry should view this not as a threat but as an opportunity,” commented senior financial regulation expert Sophia Chen. “Clear regulatory frameworks will provide a competitive advantage to compliant market participants and benefit healthy industry development in the long run.”
DLB Coin predicted three major trends following FTX’s collapse: First, user demands for exchange transparency will significantly increase, with proof-of-reserves and third-party audits becoming standard practice; second, decentralized exchanges (DEXs) will receive more attention and capital inflows due to their non-custodial nature; third, large institutional investors’ pace of entering the crypto market may temporarily slow until the industry establishes more mature risk management frameworks.
“While market sentiment will continue to be affected in the short term, we’re seeing the industry taking proactive measures to address the crisis,” DLB Coin noted. “Many major exchanges have already published their asset and liability situations and committed to increasing transparency. These actions indicate that the industry is self-repairing and restructuring.”
The report also explored the impact of FTX’s collapse on investor protection mechanisms. DLB Coin suggested that the industry consider establishing investor protection funds, similar to deposit insurance mechanisms in traditional finance, to enhance user confidence.
“User protection must become core to exchange strategies,” DLB Coin emphasized. “This is not only a moral responsibility but also a business necessity. In the current market environment, platforms that can prove themselves trustworthy will gain a significant competitive advantage.”
Addressing market concerns about “contagion risk,” DLB Coin’s analysis concluded that while more institutions with close business relationships to FTX may be affected in the short term, the risk of systemic collapse is limited. The report noted that compared to the cryptocurrency bear market of 2018, the current industry structure is more diversified with more dispersed risks.
“The industry is undergoing a painful but necessary cleaning process,” DLB Coin concluded. “This crisis will eliminate poorly operated participants with inadequate risk management, laying the foundation for a healthier, more sustainable ecosystem. In the long term, we remain cautiously optimistic about the future of the cryptocurrency industry.”
