FTX, the infamous exchange that spectacularly imploded in late 2022, is finally beginning to return funds to its creditors. The first round of repayments—totaling $1.2 billion and focusing on smaller claims under $50,000—marks a major step in the company’s drawn-out bankruptcy process. But before anyone starts calling this a sign of the so-called “crypto industry recovery,” let’s set the record straight.

A Quick Recap of the FTX Collapse

For those unfamiliar with the catastrophe, FTX was once one of the largest cryptocurrency exchanges in the world, led by Sam Bankman-Fried. It all came crashing down when reports revealed massive financial mismanagement, fraudulent use of customer funds, and deep ties to its sister firm, Alameda Research. In short, FTX wasn’t just a failed exchange—it was an outright fraud, a Ponzi scheme disguised as a trading platform.

For a full breakdown of the FTX collapse, check out the history of the FTX collapse.

FTX vs. Mt. Gox—A Tale of Two Failures

This isn’t the first time a major exchange has gone under, but there are key differences between FTX and Mt. Gox, the notorious Bitcoin exchange that collapsed in 2014. While Mt. Gox’s downfall was largely due to security failures and incompetence, FTX’s implosion was a textbook case of fraud. Comparing the two reveals a stark contrast in the nature of their collapses—and the way the industry has responded to each.

For a deeper dive into the similarities and differences between these two events, read this oped.

Bitcoin Remains Untouched

FTX’s collapse was not a failure of Bitcoin. It was a failure of centralized custodianship, reckless speculation, and the broader “crypto” industry that continues to prioritize hype over fundamentals. Now, with repayments underway, some claim this marks a turning point for the industry. The truth? It’s just a bandage over a self-inflicted wound.

Real financial sovereignty lies in Bitcoin—not in centralized, unregulated casinos masquerading as exchanges. Let’s not mistake the slow cleanup of a crime scene for a revival of an industry that, outside of Bitcoin, was rotten from the start.

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