FTX, the fourth largest crypto asset exchange by trading volume globally, had to file for bankruptcy about a week ago, having misused its client's assets in a shrinking market, leading to a significant budget hole. Large VC funds such as SoftBank, Temasek and Sequoia invested a total of$1.9B for a company’s valuation of $32B last January.The risk of further bankruptcies is great but not enormous because the shock created by Celsius and Three Arrow Capital bankruptcies 3-4 months ago had already cleaned the most significant bubbles to some extent. This second collapse will now do a radical cleanup.The sequence of events that brought FTX to implosion shows the intrinsic fragility of the entire decentralized financial system, where the absence of rules and transparency is almost total.Europe is behind. Markets in Crypto-Assets Regulation (MiCA) of the EU will be approved in February 2023 and will be effective in single EU countries only 18 months later.The USA is far ahead, not only for having listed a stock exchange such as Coinbase on the Nasdaq but also because they request superior accounting and transparency criteria.From an investor’s perspective, the FTX’s collapse will likely impact all the next Web3 or crypto investments, and it may even affect due diligence processes outside of crypto deals.

‍