In November 2022, the world's second-largest crypto exchange, FTX, plummeted from its peak to the bottom within just a few days. This was not a black swan event but a trust collapse carefully disguised behind a facade.

Once, FTX was regarded as the most "stable" platform in the market. Founder SBF was called the "Warren Buffett of the crypto world," with a dual persona of Wall Street elite and regulatory friendliness. The company was valued at $33 billion, backed by top investors like Sequoia, SoftBank, and Temasek. Sponsoring NBA arenas, gaining political endorsements, and mainstream media backing—all seemed so glamorous. The market consensus was clear: FTX represented the most compliant and safest choice in the crypto space.

The turning point came from a media report. Alameda's balance sheet was exposed, revealing that a large portion of its assets were composed of FTT tokens. Its liquidity heavily depended on this "own air coin." Once the news spread, users began to withdraw en masse. The exchange's cash flow instantly broke, leading to a bank run.

Even more deadly truths followed: customer assets were directly misappropriated. Where did this money go? To top up Alameda's reserves, to speculate, to prolong life. No segregation, no risk control, no bottom line. Within days, FTT became worthless, FTX declared bankruptcy, and trust in the entire industry collapsed.

How devastating were the consequences? Over $8 billion in user funds were missing, and assets of millions of people were frozen. Countless projects, funds, and retail investors were dragged down in a chain reaction. The crypto market entered its darkest hour. SBF went from a "genius youth" to a prisoner, facing multiple charges of financial fraud and money laundering.

The FTX incident left five profound ironclad rules. First, an exchange is not a bank; depositing coins is essentially an unsecured loan. Second, backing by top VCs and political endorsements does not equate to real risk control and transparency. Third, platform tokens are the biggest risk exposure—issuing tokens, setting prices, and collateralizing oneself—once out of control, it’s a nuclear bomb. Fourth, the "regulatory-friendly" persona may be the biggest disguise. Fifth, true security has never been in the promises of centralized platforms but in your own hands.

LUNA collapsed due to flaws in mechanism design; FTX collapsed due to human nature. This is not a technical issue but an inevitable result of power, greed, and lack of oversight. Two years later, these lessons still remain vital for every participant to remember.