FTX’s bankruptcy in November 2022 caused shockwaves, erasing billions in market liquidity and impacting confidence in centralized exchanges. Three years later, the industry has seen transparency initiatives like proof-of-reserves attestations and audits, though some creditors are still awaiting repayment. Centralized exchanges faced withdrawals of over $20 billion post-FTX crisis. Exchanges responded with proof-of-reserves attestations to demonstrate solvency. However, criticisms arose for relying on snapshots rather than continuous audits.

Decentralized finance protocols also adapted post-FTX collapse, emphasizing transparency and self-custody for users’ protection. The industry saw stronger risk frameworks in DeFi and more sophisticated governance systems. Despite transparency campaigns and new regulations, some FTX creditors are still waiting for closure. FTX has distributed $7.1 billion to creditors so far, with repayments made in USD rather than crypto assets, potentially impacting recovery rates.

Former FTX CEO Sam Bankman-Fried is serving a 25-year prison sentence for fraud and conspiracy but has appealed his conviction. Prediction markets assign a 4% probability of a presidential pardon in 2025. Ex-CEO Caroline Ellison, who cooperated with prosecutors, is set for release in mid-2026. Bankman-Fried’s legal team argued before the US Court of Appeals for the Second Circuit on Nov. 4.

Read more at Cointelegraph: Three Years After FTX collapse, Crypto Industry Still Feeling the Impact