Bitcoin Forum

The FTX exchange fund mismanagement might actually be a good thing, why?

1) All other crypto exchanges will now have to proof to the world that they actually have funds secured, transparency must be proven for the exchange to see new users.

2) Regulation will get more serious, this have triggered more reason for regulation call.

From now on Consumers Protection will always come first.

There is nothing good in people losing their hard earned money just because someone doesn't know how to do business. True, this could (and probably will) make other exchanges like Binance to be more transparent, but at what cost? Do we always have to have situations like this when bunch of people lose shitload of money just to improve transparency and regulation?

And one more thing... If you have held your crypto on FTX, I'm sure you would be talking differently.

Exchanges may be getting better, regulation can become more effective and the exchanges may secure fund for compensation if anything goes wrong. But there are still inconveniences like disabled withdrawal and inability of the exchange customers not able to have access to their coins. To avoid the inconveniences, use noncustodial wallet. If you are a trader, after you finish trading, move your coins out of the exchange. Do not leave your coins on exchanges.

You are very naive if you think that more regulations will bring good results and consumer protection to anyone  ::)

Trading bitcoin and shitcoins should not be done on centralized exchanges, and people should not complain when stuff like this happens, just because they want convenience, and someone else to take care of their money.
Take responsibility for yourself, switch to decentralized exchanges like Bisq, and stop asking for babysitters for your bitcoins.
I doubt most people will learn anything from this FTX collapse.

Every kick in the ass makes you go one step forward. Is that I good thing? Well.. it's debatable.
As said, people losing money is not a good thing, even if he signs were there (not your keys, not your coins) and they just failed to see them.

Consumers' protection should have been first for many years, still, taking (unnecessarily high) risks in the name of profit is not new and I fear it won't stop this easy.
People still open businesses under various jurisdictions they can play people's money with no big repercussions.

Even SMF tells now that USA customers will be OK, while the rest of the world... pretty much bad luck. Why that? Maybe because USA is one of the few regions SBF is afraid of the law?

Let's consider using centralized exchanges as something some people cant do without but the recent goings with FTX should be a lesson foe every investors on centralized currencies and many among others which Binance is included to state it's disapproving hands on FTX, also It's about solana this time around as it suspended the withdrawal and deposit with USDT and USDC
https://twitter.com/WatcherGuru/status/1590366967588085762?t=s9XsbGvMxBQwEJpif1B3Vw&s=19 if you are still within centralized network in this present time, the risk is all yours.

It's still possible in my opinion, my belief is that there are some lies that the exchanges maybe intentionally hide that have the potential to harm users more than this one. Who knows, the founder of the exchanges was a big "players" whose level of play was never thought of by the average person.
 
Another thing that has not been fixed (even the government) is the protection of consumer identity, even though it is actually regulated.

FTX losing the game is like getting rid of the bad eggs in crypto.  yes its for the greater good for investors wanting to buy cheap also.

they were very confident in bailing out Voyager and other crypto companies but in hindsight they were actually losing funds. it was all a show telling their investors that they have bought properties everywhere.

Let's face it, for the most part, crypto is a highly speculative, unpredictable space. And that's okay. They are risky investments at their best and, as such, they will continue to be vulnerable to wild fluctuations in price. But, the FTX exchange funds mismanagement is a clear sign that there are some very real problems in the space that needs to be addressed. Not only does this show a complete lack of ethics, but it also indicates an opportunistic approach that could have serious consequences for the industry as a whole. It's not about the volatility or risk, but how exchanges are handling the user's money and what they do with it. And, it's clear that FTX has failed miserably in this regard.

I understand and I feel sad that people lose a lot of money to this FTX bankruptcy but sooner or later this is going to happen anyway.

Many exchanges went bankrupt in the past and people still haven't learned their lessons, I still remember MT.gox till this day but many have forgotten.

People need to start keeping their assets of centralised exchanges, by 2024 all this FTX issue will slowly fade away and people will forget again.

I don't store my assets on any exchanges, I am never going to feel convenient doing so, I use binance and okex but my coins have never used hours on these exchanges talk less of a day.

I agree with you. But you can't say that this FTX issue might be for the greater good because it can't be. People will always be lazy and just like you said, in a few years FTX will be remembered just like we remember Mt. Gox today. And there will probably be another centralized exchanges where people will hold their crypto because it's easier and people are lazy to learn.

Actually, this FTX fiasco is very similar to some bank becoming insolvent - people would run to that bank and try to withdraw their money (that's where the phrase "bank run" comes from). Those who are first will be able to withdraw, but many won't. The only difference is that this kind of business is legal for banks, but it's illegal for crypto exchanges.

Problem is that those things will probably be faked as well. Rumour is that behind crypto.com sending 320,000 ETH to Gate was the attempt to foll proof of reserve, which makes more sense than "oops we sent $500 million by mistake".


Be careful what you wish for.

While I don't think that what happened with FTX is a good thing because many people will never see their money (even though they should have know better and not use CEX to store coins), there are reports that they miss ~9 billion meaning it would happen anyway so better than it happened now than 6 months later as FTX was getting more and more popular+ they planned to make their debit card available worldwide which means even more people would lose their money.

Maybe those auditors should do their job better and not just take a snapshot of the wallet balances at certain time but rather closely monitor wallet transactions few days/weeks before and after the audit. Then they could have noticed that there is something fishy with their wallets.



Of course it's always good that a bad company like FTX go out of business sooner than later. I just feel sorry for all the people and good projects that have lost their money on it. That's why I can never say stuff like in the title of this thread.

That's the problem, I don't think that they will do a good job, based on how everything has been done in this "industry" (just take for example the most reputable smart contract audit company Certik). I have never seen so many incompetent people running projects and dealing with millions of dollars like in crypto, bar is set incredibly low.


I do feel sorry for all those who lost their money (even though they should blame themselves first for leaving money on CEX) but many of those who got rekt will continue using CEX the same way they did before and how to feel sorry for them the next time they lose their money, which they will. Btw, regarding those "good projects",  vast majority were nothing but shitcoin projects so I guess there is some poetic justice in the way they lost their money.

I've been thinking the same thing for a long time now--increased regulation just goes against the spirit of what bitcoin stands for, which is to have a form of money/store of value/whatever that exists outside of governments and banks.  Once regulators start stepping in and controlling things, it's game over.  But we'll see what actually happens; it's strange that there hasn't been too much regulation so far, and bitcoin has been around for over a decade.

Probably not, and I'm sure this won't be the last disaster to hit crypto no matter what governments do.

I don't think that regulation will bring anything bad to crypto. But I'm not talking about regulating crypto as the industry. I'm talking about regulating projects that use crypto to earn a shitload of money and actually bring nothing to the crypto industry. Take FTX, Binance and other CEXes. What do they bring to the industry? Nothing. Their owners are just using crypto to earn themself a lot of money. That should be regulated and people who play with other people's crypto should know that they can't do whatever they want.

On the other hand, we can't have people who just write code put behind bars (here I'm referring to the Tornado Cash creator) because people like him did nothing wrong just like gun manufacturers aren't held accountable for someone killing a person with the gun that they manufactured.



Of course! Personally I have learned from the FTX collapse and I withdrew all my crypto to my wallets. But the majority will probably keep using Binance and other CEXes. Especially when the dust around FTX settles. In a few years FTX will be remembered like today Mt. Gox collapse is being remembered.

How? there's no way for us to know how trusted their words, we can't verify anything since we only can trust every words of them.

So you're really fine if the exchange ask you to provide 10+ personal identification, make a self introduction video and have a conversation with them in live video? I wouldn't want and dare to do those thing since privacy is really important for me. What if the exchange got hacked and a hacker using your identity to scam a huge amount? police will come into your house and ask you to pay all the money. It's true you're not did that, but anyone know it's you did that.

I've not really seen any reason for more regulations on Bitcoin and I really don't see the possibility either except through exchanges.
One of the reasons why government have been fighting Bitcoin I think is the fact that they had nothing to gain from transactions of Bitcoin and they have been strategizing ways to be party and possibly the controllers of Bitcoin market which isn't possible not anytime soon.

I'm also sure most people haven't learnt their lessons from the last FTX crisis as many still have reasonable money stored and kept in exchanges like binance and it think what the space needs it's proper sensitization.

no need to wait for several years, now FTX only has a name and is remembered as a trash Centralized Exchange and the FTX CEO does not give any responsibility other than just making tweets as if they don't know what's going on now. The collapse of FTX became a collapse of trust in CEX. If you use Binance it might be an option for now I also still use Binance, but the difference is that the main asset storage is only in a personal wallet, so it will be safer.

FTX was a centralized exchange that was trusted by everyone including many big investors. Just like that Binance is also trusted by many users including big investors and everyone can only trust when CZ says that funds are covered. In crypto there shouldn't be need to trust anyone and if you use DEX for trading, you really don't have to trust anyone. The only thing that need to be trusted is the smart contract code and that can be verified if you know how to read the code.

You speak as if it were the first time, if we take the past five years, many events will tell you the need to move away from the central platforms, why do we go away with memory, the Luna issue and the collapse of that stablecoin was a few weeks ago.

Even so, people still trust Binance and its central coins (BNB AND BUSD)

iF FTX issue might be for the greater good, then it will be a reason for more rules that govern those exchanges/

I think we are all aware of the risks of using centralized exchanges but there may be no other choice. In case you are a day trader and your profits mainly come from trading, how will you make a profit if you don't use a centralized exchange while DEXs still can't provide these features fully?
Currently, it is not possible to completely stop using centralized exchanges but we hope that in the future DEX can offer better solutions and investors will have more solutions to choose from.

and you also have to be careful on DEX exchanges, there are many scam DEX exchanges that try to trick users into connecting their personal wallets so that the scammers can also drain all of your assets. indeed no one can be trusted. user caution is also very important to keep assets safe. the FTX problem and some hacked exchanges are cliché problems and it just keeps repeating themselves.

I agree. But DEX users need to learn ti read requests for approval before they click the Approve button. That text can tell user what kind of approval does a smart contract requesting. Approval request is not classic Terms of service text we all are used to just accept. Accepting terms of service of some program you are installing won't drain your wallet, but with approving you can lose all your crypto.