Cryptocurrency: How to deal with the losses and confidence decline. Experts commentThe collapse of cryptocurrency exchange FTX and its creator Sam Bankman-Fried (SBF) has been compared to the collapse of Lehman Brothers. Other cryptocurrency platforms are being impacted by its downfall as investors and users scramble to get their money back.Yahoo Finance spoke to professionals in the cryptocurrency business as part of its series on "What to do in a bear market" to understand what happened and how to manage losses from defunct exchanges.Numerous individual investors have been trading cryptocurrencies on different platforms over the past two years. They are likely currently sitting on significant losses. What has to be done particularly to regain investor confidence?According to Owen Lau, executive director of Oppenheimer, one approach to boost trust is through more industry activities.He brings up the recovery fund that Binance, a cryptocurrency exchange, has created in an effort to aid projects dealing with liquidity issues.Lau recently told Yahoo Finance Live, "Hopefully these private sector solutions can lessen the damage generated by FTX.""Two, I believe it takes time for the industry to exhibit greater openness. For the sake of the investors, this business should be reliable and capable of operating a sustainable model, he continued."Number three... I hope that the trust can return when the industry can present additional use cases to the customers," added Lau.Which cryptocurrency leaders are still around today that investors may believe in?"The Bitcoin cryptocurrency is still a 10- to 12-year-old product. And it's fair to argue that the market is still rather fragmented," Lau remarked."I think the leader will show up after this incident. Additionally, a platform that is more controlled and transparent will eventually take the lead. But how these things develop over the following six to twelve months will be seen, he continued.The issues that cryptocurrency owners have so far had are related to exchanges like FTX, Celsius, and Voyager. What distinguishes owning cryptocurrency in an exchange from an external wallet.According to Heidi Chakos, owner of the Crypto Tips YouTube channel, "the most significant difference between keeping your bitcoin on an exchange vs an outside wallet is custody."According to Chakos, holding bitcoin on an exchange is simpler for some users than trying to find out how to use a wallet on their own."However, what hundreds of thousands of people have regrettably discovered through experience, especially over the past six months, is that once you deposit or hold cryptocurrencies on an exchange (or any centralized, custodial platform), you are essentially handing over true ownership of those cryptos to whoever is running that exchange," he continued."Be your own bank is a catchphrase among crypto enthusiasts. Your wealth is now secure without the aid of a bank or other external body. Hardware wallets make it simple to do. Today, there is a wealth of free resources available online and on YouTube that demonstrate how to set up and operate any type of wallet step-by-step. They are also rapidly becoming into incredibly user-friendly, according to Chakos.The courts are now handling the FTX bankruptcy. How will the more than a million creditors who are responsible for losses fare?One of the biggest hurdles will be figuring out the assets' value and translating it into actual money in the bankruptcy court."How much is the asset worth in bankruptcy. It will be a difficult task, in my opinion, to ascertain the liquidated value of FTX subject to distribution to creditors, Kenneth Feinberg, a former administrator of the 9/11 Victim Compensation Fund, said on Friday on Yahoo Finance Live.Another difficulty will be figuring out who qualifies as a creditor.How many of the creditors have loss evidence? Are they really going to come forward, provide their name and location, specify the size of the loss, and demonstrate that loss in a very murky kind of money," said Feinberg.What's next for the future of digital assets given that so many investors and users of crypto exchanges have already been duped?"I don't deny that some investor confidence and some customer confidence have been weakened. Having said that, Oppenheimer's Lau is still upbeat about the long-term prospects for blockchain technology and digital assets.He thinks that the application cases for these technologies will take center stage in the next stage of blockchain adoption."We are aware that the first utility that we frequently discuss is trading and speculating. However, there are really a lot of different services and use cases in the payment sector. and in the finance sector as well."Sam Bankman-Fried has regular meetings with parliamentarians to help shape the laws governing digital assets. Currently, some business owners are requesting regulations to safeguard customers and investors. What do you anticipate happening there?There is legislation that has already been introduced in the House and Senate as bills. According to Cathy Yoon, chief legal officer of MPCH Labs, many of the SBF and FTX-favored pieces of legislation are unlikely to pass at this time.There are several additional measures before Congress. I don't anticipate them progressing rapidly at the moment. There is, in my opinion, a need for solutions. There are many unanswered questions. People seek solutions. Hearings may potentially take place before the end of the year, she continued."I know there are a lot of individuals pushing for regulation of the sector in general. They demand swift action. However, in my opinion, the most important thing to keep in mind is that this truly is a scam first and does not necessarily affect the entire crypto industry in general, Yoon said.