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The collapse of FTX: my story 🥲
When I first registered on FTX, I felt like I had found the exchange of the future. The platform offered an incredibly wide range of tools: from margin trading and derivatives to tokenized stocks. The interface was convenient, liquidity seemed almost perfect, and fees were lower than those of competitors. On top of that, the massive trading volumes and institutional support inspired confidence. I remember reading reports that FTX ranked among the top in daily turnover, and I took that as a sign of stability.
My strategy was technical: I traded Bitcoin and Ethereum futures, using cross-margin to manage risks. My leverage never exceeded 5x, and I considered myself cautious. To protect my positions, I set algorithmic stop orders, monitored open interest, funding rates, and liquidity flows in the order book. All of this gave me a sense of control.
But November 2022 turned my life upside down. Suddenly, rumors surfaced about problems at Alameda Research, a company closely tied to FTX. News articles began circulating shocking figures—huge holes in the balance sheet, and a heavy reliance on FTT, FTX’s own token. That’s when I first noticed spreads widening drastically on some trading pairs, and buy-side order volumes collapsing. My trading bot flagged unusual volatility spikes even in pairs that were typically very liquid.
When FTX officially suspended withdrawals, I knew it was over. My account held over $70,000—spread across crypto and stablecoins. I clung to the hope it was just a technical outage, but within hours it became clear: the funds were frozen. The exchange had collapsed.
For me, this wasn’t just a financial hit. I lost my sense of security in the entire industry. I had carefully diversified assets, studied reports, and monitored reserves. Yet none of that mattered—no amount of technical caution could save me when the very infrastructure crumbled beneath my feet.
Today, the picture is a bit clearer. Through bankruptcy proceedings, there is at least some hope for partial recovery of funds. According to recent trustee reports, a significant portion of FTX’s assets may eventually be returned to creditors. But the process drags on for years, and payout amounts remain uncertain.
After the collapse, I completely changed how I store capital. First, I moved almost all assets to cold wallets. Now, the key metrics I look at aren’t just volatility and margin levels, but also the trustworthiness of the infrastructure itself. I track proof-of-reserves, check exchanges’ transparency, and avoid keeping large sums in one place.
This experience taught me that in crypto, technical factors are only half the story. Charts, volumes, and indicator signals may all look perfect—but if the core custody and settlement system fails, every stop order you set turns to dust. For me, it was a personal tragedy: I didn’t just lose money, I lost my belief in the “safety” of algorithmic trading.
Now, I approach the market with far more caution. Maybe this lesson will help me make better decisions in the future. But the scar from FTX will remain forever—a reminder that counterparty risk can be stronger than any technical analysis
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