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Where Next for Blockchain Technology After FTX Collapse?

The bankruptcy filing by crypto giant FTX, along with the dramatic drop in the value of most cryptocurrencies in 2022, has raised new questions regarding the future of blockchain technology.     

red lines on black background indicating cryptocurrency value crash
Shutterstock/Artit Wongpradu
Financial markets were buzzing with stories surrounding the collapse of crypto giant FTX this past week. Here is some of the top media coverage:

CNN Crypto giant files for bankruptcy as CEO resigns in a stunning downfall: “FTX Group said Friday it has filed for bankruptcy in the United States and that its CEO has resigned, marking a stunning downfall for one of the biggest and most powerful players in the crypto industry.

"FTX said Sam Bankman-Fried, the 30-year-old founder of the exchange, will remain to assist in an orderly transition. The firm appointed a new CEO, John Ray III, and many employees are expected to stay on to operate the company in Chapter 11.” — Sam Bankman-Fried steps down as FTX CEO as his crypto exchange files for bankruptcy: “In the 23-page bankruptcy filing obtained by CNBC, FTX indicates it has more than 100,000 creditors, assets in the range of $10 billion to $50 billion, as well as liabilities in the range of $10 billion to $50 billion. Bankman-Fried also indicated he wishes to appoint Stephen Neal as the firm’s new chairman of the board.” — FTX - Cryptocurrency market rocked by near-collapse of exchange: “The cryptocurrency world is full of big personalities and Sam Bankman-Fried is one of the biggest.

"Since the 'cryptocrash' in the spring, the young, outspoken owner of FTX has been a beacon of hope to investors large and small.

"While other companies have faltered, Bankman-Fried seemed to be thriving. …

"As revelations about his company's fragile finances came to light in reporting by CoinDesk, those outspoken interviews are now coming back to bite him.

"'More crypto exchanges will fail,' he said in one interview adding that some firms are 'secretly insolvent.'"

Fortune.comWith FTX on the verge of collapse, customers are wondering what happens to their crypto. Here’s what to do if you have an account there: “Cryptocurrency and the related business entities aren’t regulated in the U.S. the way other financial institutions like banks or credit unions are. Checking and savings accounts held by many consumers are backed by the Federal Deposit Insurance Corporation (FDIC), which promises to step in and reimburse customers whole if a bank fails.

“Retail and institutional investors used FTX to buy and sell cryptocurrency, as well as stocks, ETFs, futures, options, leveraged tokens, and non-fungible tokens (NFTs). Customers could use FTX’s native cryptocurrency token FTT to get a discount on trading fees by paying for trades using the FTX token—the more FTT a user held, the bigger the discount. But unlike FDIC-insured accounts, no such safeguards exist for crypto investors using a platform like FTX."


So how will the events of the past week, and the drop in value of bitcoin and other cryptocurrencies, impact wider trends in blockchain?

Before I address that question, I want to emphasize that many leading experts are predicting big growth in blockchain expenditures, such as ETF Trends stating that the blockchain expenditures will reach $67 billion by 2026.

In addition, innovation is being led by many technology companies that lead with blockchain technology. Consider these articles on blockchain innovations: —Will Blockchain Technology Make Logistics the Best Ever?: “Startups in certain Asian countries such as South Korea are also experimenting with blockchain technology to make the last-mile delivery process seamless and foolproof. They have created centralized delivery platforms and matching messengers for order delivery using AI and smart contract-based applications. A number of multinational shippers are also testing the applicability of blockchain to maintain paperless transaction records in a distributed ledger, thereby lowering the chances of trade counterfeits and payment disputes.” — 5 Ways CFOs Can Maximize Blockchain Technology: “As the next generation of the world wide web comes to fruition, new economic and technological infrastructures are on the horizon. With this new generation, known as Web3, concepts including decentralization, digital currencies, token-based economics, and non-fungible tokens (NFTs) are making their way into the mainstream economy. As the new technology brings terms and tools foreign to even the highest academically credentialed individuals, this new arena of commerce has created an even playing field for companies of all sizes to leverage.”

Forbes4 Ways Blockchain Technology Will Change Leadership: “Blockchain technology provides a decentralized, secure way to store and manage data, enabling new levels of transparency and collaboration that transform strategies and operations. With blockchain technology, organizations can create a shared, tamper-proof database to track transactions, assets and interactions among parties. This provides a single source of truth that everyone can trust, eliminating the need for costly intermediaries and manual reconciliation. But leaders must take a strategic approach to ensure that their organizations can reap the full benefits of this transformational technology.”

CNBCSingapore wants to be a hub for blockchain in finance, just not speculative crypto trading, MAS says: “Singapore has ambitions to become a global crypto hub, but has been cracking down on the industry after many retail investors lost their life savings to crypto trading. The city-state has repeatedly warned that cryptocurrency trading is “highly risky and not suitable for the general public” due to its volatile and speculative nature. It even banned crypto advertising in public areas and on social media in January 2021 and proposed new measures to protect retail investors recently following the $60 billion collapse of Terra’s Luna.

"Still, Singapore has openly shown its approval for blockchain technology and has embarked on various projects. Those include Project Ubin, which successfully completed its experiment using blockchain for the clearing and settlement of payments and securities.

"Another is Project Guardian, which recently completed its first industry pilot that involved DBS Bank, JPMorgan and SBI Digital Assets Holdings conducting transactions in tokenized foreign exchange and government bonds."


As I've listened to experts in blockchain and cryptocurrencies this past week, the consensus is that blockchain technology is not going away and will be expanding in the years to come. The failure of FTX and fall in the value of cryptocurrencies will bring more regulations and change that will be good for the financial industry overall.

And there are many government applications for blockchain technologies, with major advances expected over the next decade.

Nevertheless, the events surrounding cryptocurrencies and the bankruptcy of FTX will, no doubt, bring about soul-searching and new approaches that will hopefully bring forward lessons learned and inform the government regulations that will no doubt be coming.


Daniel J. Lohrmann is an internationally recognized cybersecurity leader, technologist, keynote speaker and author.