The direction of liquidity is the key. Is the compensation from FTX a savior or a hidden danger?
From bankruptcy to restructuring, the compensation process for FTX has officially begun, bringing approximately $1.2 billion in funds to the first batch of affected users.On February 18, FTX began the payout process for accounts with claims under $50,000, with a total payout of $1.2 billion, of which approximately $800 million has been paid out. The flow of these funds will directly impact the short-term market and long-term ecology of the cryptocurrency space. Choosing to continue investing or withdraw is essentially a game of "liquidity redistribution," whose effects are far from simply bullish or bearish, but will produce complex chain reactions.
I. The Collapse of FTX: The Beginning and End of the Cryptocurrency "Lehman Moment"
In November 2022, the cryptocurrency space witnessed a "black swan event" comparable to a financial tsunami. The world's second-largest exchange, FTX, collapsed due to a liquidity crisis, and its founder, SBF (Sam Bankman-Fried), fell from "savior of the crypto world" to "fraud suspect," dragging an empire worth $32 billion into bankruptcy in just 10 days.
The trigger for the incident stemmed from a balance sheet loophole at FTX's affiliated company, Alameda Research. This quantitative trading firm, controlled by SBF, had a significant portion of its assets bet on FTX's platform token, FTT, creating a "self-buying and selling" circular bubble. When Binance founder Changpeng Zhao announced the liquidation of FTT, market panic triggered a bank run, with $6 billion withdrawn in three days, leading to FTX's instant collapse. This crisis not only caused Bitcoin to plummet to a two-year low but also resulted in top institutions like Sequoia Capital and SoftBank losing everything, with hundreds of crypto companies going bankrupt, marking a "nuclear explosion-level disaster" in the crypto space.
II. SEC's Heavy-Handed Approach: Restructuring the Cryptocurrency Space Under Regulatory Storms
The collapse of FTX pushed the U.S. SEC (Securities and Exchange Commission) to the forefront of regulation. As early as 2022, the SEC had initiated lawsuits against platforms like Ripple and Coinbase, accusing them of illegally selling unregistered securities. Following the FTX incident, the SEC quickly intervened to investigate SBF's misappropriation of customer funds and market manipulation, and jointly with the CFTC (Commodity Futures Trading Commission), conducted a thorough investigation of FTX's U.S. operations. This series of actions sent a clear signal: cryptocurrencies are no longer an unregulated "lawless land."
The tightening of regulation brought about a dual effect. On one hand, centralized exchanges like Gemini and BlockFi were forced to enhance transparency, with some platforms even suspending high-risk operations to seek compliance; on the other hand, decentralized finance (DeFi) rose to prominence, with DEXs (decentralized exchanges) like Uniswap attracting risk-averse funds due to their "code is law" characteristic. Although the SEC's iron fist temporarily suppressed market sentiment, it laid the foundation for the long-term healthy development of the industry.
III. $16 Billion Payout: The "Double-Edged Sword" of Liquidity
In January 2025, FTX's restructuring plan officially took effect, marking the beginning of a $16 billion payout. This "largest debt repayment in cryptocurrency history" has sparked intense debate over its impact on liquidity:
Bullish Side: Expectations of Fund Reflow and Bull Market
"Blood transfusion" effect: The initial $1.2 billion payout will be distributed in stablecoin form, and some creditors may reinvest the funds into mainstream cryptocurrencies like BTC and ETH, creating market buy pressure.
Confidence restoration: The payout plan includes a 120.5% excess cash compensation (for some users), alleviating investors' fears of "exchange explosions leading to zero" and boosting market sentiment.
Deleveraging completion: After two years of liquidation, most of the SOL and other tokens held by FTX have been sold off, releasing market selling pressure in advance. Industry insiders predict that the payout could become the "catalyst" for a bull market in 2025.
Risk Side: Short-term Volatility and Structural Hazards
Fiat "drain": The payout will be settled in fiat/stablecoin and calculated based on 2022 cryptocurrency prices (when BTC was around $20,000). If creditors choose to cash out, it may lead to capital outflow.
Tail risk: FTX still holds niche cryptocurrencies worth millions of dollars (such as MAPS and SRM), and concentrated selling could trigger a flash crash.
Regulatory aftershocks: The SEC's monitoring of the flow of payout funds may exacerbate cautious market sentiment, especially against the backdrop of unclear cryptocurrency policies under the Trump administration.
IV. The Future of the Cryptocurrency Space: Rebirth or Cycle of Crisis?
The FTX incident serves as a mirror, revealing three major ailments in the cryptocurrency space: centralized black boxes, leverage abuse, and regulatory absence. However, its payout plan also proves that even in the face of systemic risks, the crypto industry possesses the resilience for self-repair.
In the long run, this crisis is catalyzing change:
The wave of decentralization: The rise of DAOs (Decentralized Autonomous Organizations) and smart contract insurance is leading users to gradually shift asset custody from exchanges to on-chain protocols.
Compliance-driven survival: Platforms like Coinbase are actively embracing SEC scrutiny, seeking mainstream financial recognition through listings and audits.
Return to technological value: Market attention is shifting from speculative trading to underlying innovations like Layer 2 and zero-knowledge proofs, with the Web 3.0 application ecosystem gradually taking shape.
Conclusion
The ultimate destination of the FTX payout funds is essentially a vote by market participants with real money, determining the future direction of the industry. Continued investment may not necessarily be bullish (it could breed new bubbles), and withdrawal may not necessarily be bearish (it could accelerate value consolidation). For investors, rather than predicting market trends, it is better to deepen understanding: those who truly traverse cycles are not the speculators chasing hot money, but the long-termists who understand the essence of blockchain.
