Counterparty Risk and the Post-FTX Landscape

This lesson covers the risk that defines how professionals trade crypto: counterparty risk, the danger that the exchange or firm holding your assets fails and takes your money with it. The FTX collapse turned this from a theoretical worry into the industry’s formative event, and it reshaped how every serious desk operates. We build the idea from an everyday bank example, use FTX to make the failure concrete (what commingling and rehypothecation actually mean), then cover the responses the industry adopted: proof of reserves, off-exchange settlement, and exchange diversification. This is the lesson where “not your keys, not your coins” stops being a slogan and becomes a risk-management discipline.