In the wake of the FTX bankruptcy, multiple crypto firms, including one of the largest crypto lending businesses, have suspended withdrawals, leaving customers without access to their funds.

According to YouTuber Matt Kohrs, the events that unfolded over the last week have caused "dismay" in the retail trading community as numerous customers have come forward saying how much they've lost in the FTX collapse. Some say they may not be able to recoup those losses.

For crypto investors, there is a "very difficult lesson" to be learned from it all, he said.

"These exchanges or yield-bearing products... it's all dangerous," Kohrs told Yahoo Finance Live (video above). “Fortunately, because we kind of touched the oven earlier on in the year, we learned that stark lesson of the person you should trust in the world of crypto is yourself. And that's why for months now, the key thing has been self-custody and even a focus on cold wallets.” (Cold wallets store data offline, unlike hot crypto wallets, which are connected to the internet.)

Headquartered in the Bahamas, FTX was one of the world’s largest exchanges. The company founded by Sam Bankman-Fried processed a vast amount of crypto trades globally, along with its competitor Binance, and spent millions of dollars coaxing American legislators to create crypto-friendly regulation.

Bankman-Fried's empire collapsed spectacularly last week after Binance liquidated its holdings of FTT, the native token issued by FTX, following a report earlier this month that Alameda, one of FTX’s major market makers and business partners, was hiding its insolvency.

Kohrs explained that he thinks of FTX as "an old-fashioned company with old-fashioned fraud." When it comes to crypto industry players like FTX and the crypto space broadly, it's "important to have a distinction between the two," he added.

The failure of FTX has been likened to a number of previous scandals, such as the Ponzi scheme committed by Bernie Madoff and the dizzying fall of American energy company Enron. In those instances, Kohrs noted, the fallout didn't take down the entire energy and financial sectors, and the same can be said for crypto.

"For example, when Enron blew up, that didn't mean that people were all of a sudden against oil and petroleum and energy," Kohrs explained. "When Bernie Madoff's fraud came to light, it didn't mean that people were like, 'Nope, we're now completely done with hedge funds and Wall Street.' There are bad actors, and then this is a sobering moment to realize we should focus on the core tenets of what crypto is meant to be, specifically bitcoin."