Then it's also the end of crypto as a consumer product. Centralized exchanges offered a ton of usability and monetary incentives that brought people into crypto.
Trying to rebuild a user base without those things will essentially be impossible. Even during the days of free money in 2021, the full crypto user base wasn't huge. With high interest rates, tons of fraud in the rearview mirror, and enormous obstacles to usage, the community will be a tiny fraction of even its previous tiny fraction of traditional banking customers.
If FTX kept to their ToS they would have all the funds available and there would be no collapse. But they were greedy, decided to use user funds without authorization, then lost them and the whole thing came coming down.
Exchange which is transparent and truly does not trade with customer assets has no risk involved (other than hacking and similar) and should/would be a massive money printing machine.
Trying to rebuild a user base without those things will essentially be impossible. Even during the days of free money in 2021, the full crypto user base wasn't huge. With high interest rates, tons of fraud in the rearview mirror, and enormous obstacles to usage, the community will be a tiny fraction of even its previous tiny fraction of traditional banking customers.