I think that might have been true a year ago but at the time of FTX’s collapse, most market participants were underwater, especially the laypeople. The amount of money in the crypto market is definitely not anywhere near the supposed market cap, but if we look at USDC’s 50bn we can say with reasonable confidence that there’s at least 50bn of USD in the crypto market. If FTX was 10% of the market then 5 billion seems very plausible as a lower bound for the amount of real money value on the exchange (before backing out paper gains). That’s 5bn after people have lost >50% in the last year.

There was something like 6bn withdrawn in the days before the collapse and if clawbacks could get most of it, we would at least see 0.40 on the dollar recovered… but I am very very skeptical about that happening, given FTX international was for people outside of US jurisdiction — not impossible to recover but much more difficult.

I hope you’re right that it turns out that there’s only, say, 2bn of real money missing, and most people can be made mostly whole… but given the bloodbath of the last year, I fear that there’s probably more real money gone now, rather than less. A lot of people would be absolutely gleeful if you could somehow rollback the last year of trades on FTX.