It should be noted that the results of November clearly demonstrated the peculiarities of user behavior in the face of the collapse of FTX. In particular, many of them decided to use decentralized exchanges that do not require sending money as a deposit.

During the month, trading volumes on decentralized exchanges amounted to the equivalent of $109 billion. By contrast, in October the figure was 50 billion.

Trading volumes on decentralised exchanges

What’s happening in the cryptocurrency world

According to Decrypt, the collapse of FTX and the loss of Sam’s reputation was a tragedy for the industry not just because of the multi-billion dollar losses. Bankman-Fried was a prominent figure in US political circles, speaking in Congress and sponsoring political campaigns. The collapse of his exchange significantly damaged the reputation of cryptocurrencies in the eyes of regulators, Brightman noted. Here’s her rejoinder.

He was seen as a serious person, while everyone else in the industry was often shunned as some sort of deranged lunatic.

Tezos co-founder Caitlin Brightman

Sadly, all of Sam’s ‘seriousness’ has now evaporated. Brightman continues.

In a way it was helpful that there was at least one person who seemed trustworthy in the eyes of those close to regulators and politics. Yes, much of that trust is now gone.

Ex-CEO of FTX Sam Bunkman-Fried

Even outside of politics and regulation, Bankman-Fried has become the archetype of how companies in the industry should operate – making big aggressive deals, creating strong paradigms and finding energetic people to spread them.

The last two years have been a bit crazy. Sam Bankman-Fried and FTX have emerged on the scene as conquerors. They were making really aggressive moves to take over companies that weren’t making big returns but were on the radar.

FTX’s marketing campaigns are noteworthy. The exchange actively promoted its brand in sport – it even had a stadium named after it, although its name is now likely to be changed again. Sam’s company attracted Hollywood celebrities to star in their commercials, so FTX could become a new giant in the eyes of ordinary consumers. Here, for example, is an FTX commercial starring American football star Tom Brady.

Brightman believes the way Bankman-Fried rushed into making deals with BlockFi and Voyager Digital platforms after Terra’s collapse in May was a clear red flag.

For me, it was a watershed moment of sorts to see who came to the rescue.

At this point Bankman-Fried himself could do with some help: after all, FTX only owes billions of dollars to its biggest creditors. A full list of all creditors could exceed the one million mark. The collapse of FTX is likely to have long term industry-wide consequences, which will manifest themselves at regular intervals.

Meanwhile, there is another trend in the blockchain industry beyond the hatred of Sam Bankman-Fried. According to analysts at the Elliptic platform, crosschain bridges could become an important target for fraudsters and hackers. They estimate that the amount of money laundered through such solutions will rise by 60 per cent by next year. While in June this year the figure fluctuated around $4.7 billion, soon it will increase to $6.5 billion. At the same time, by 2025, the total amount of losses from crosschain bridges by criminals will exceed the level of 10 billion dollars a year.

As a reminder, crosschain bridges are platforms that enable transactions between different blockchains, that is, the transfer of value from one network to another. Crosschain bridges are an integral part in the process of interconnecting the ecosystems of different crypto projects and decentralised finance in general.

How cryptocurrencies are being cheated

Cointelegraph journalists broke down the latest trends in cybercrime, enlisting the help of Elliptic senior crypto analyst Ard Akartuna. He noted that bridges like Portal, cBridge and Synapse are used to transfer billions of dollars between different popular blockchains. In other words, these are important nodes for fraudsters if they want to launder a lot of money.

Frequent switching from one blockchain to another can seriously confuse transaction traces, experts say. Here’s a relevant quote.

Decentralised crosschain bridges are an unregulated alternative often exploited by cybercriminals.

Crosschain bridges also rank first among all areas of the industry in terms of funds stolen by hackers

Previously, the most popular tool for fraudsters was cryptomixers – special services that blend users’ funds to confuse their tracks. However, after popular cryptomixer Tornado Cash was put on the US sanctions list, fraudsters have become much more likely to use decentralised exchanges, cross-chain bridges and coin exchange platforms. Experts continue.

While the use of these platforms is overwhelmingly legitimate, they facilitate money laundering through various blockchains and terrorist financing due to a lack of customer identity checks and clear anti-money laundering controls.

The analyst even gave the specific name of one of the platforms actively used for money laundering: the RenBridge crosschain bridge, through which some $540 million in illicit proceeds had been transferred as of August 2022. On the other hand, centralised exchanges are not as commonly used by criminals. Virtually all of the more or less well-known exchanges now require proof of identity for clients.

Akartuna advises companies and users to carefully examine the cross-chain bridges they intend to use on a regular basis. The same Elliptic reports can be resorted to for this, but even they cannot completely guard against force majeure.

The sanctions against Tornado Cash are a prime example of how the wallets of law-abiding investors and companies can be unintentionally ‘ruined’ by sudden law enforcement action, as you now have ‘pre-sanction activity’ that does not carry the same risk as post-sanction activity.

Tornado Cash

After Tornado Cash hit the sanctions lists, wallets interacting with the cryptomixer protocol were also under suspicion. But the interaction itself could even be in the form of a “dust attack”, with the cryptomixer sending out small portions of cryptocurrency to thousands of addresses, thereby marking them suspicious in the eyes of the government. So, such problems with decentralised platforms need to be addressed in some way before another sanction affects most cross-chain bridges.


We think the cryptocurrency industry will continue to suffer because of the FTX founder's action for some time. Still, it wasn't too long ago that the blockchain platform BlockFi filed for bankruptcy and was unable to cope with the aftermath of the exchange's collapse. It is likely not the last company to end its existence on this bearish trend.