FTX files for bankruptcy after a liquidity crisis at one of the largest crypto exchanges

FTX, one of the world's largest crypto exchanges, filed for bankruptcy protection in the US on Friday, together with its affiliated trading firm Alameda Research and many related companies. Its founder, Sam Bankman-Fried, has resigned as chief executive.

The collapse happened within about a week. A report showing that much of Alameda's balance sheet consisted of FTX's own token raised questions about the links between the two companies. Customers rushed to withdraw funds, and the exchange paused withdrawals. A proposed rescue by rival exchange Binance was abandoned after it reviewed the company's finances.

John J. Ray III, a restructuring specialist, has been appointed as the new chief executive to oversee the bankruptcy. Many questions remain unanswered, including:

• How much customer money is missing and where it went
• Whether customer deposits were used for trading or loans
• What losses investors and partner firms will face

Regulators and prosecutors have begun examining the case. FTX was a prominent sponsor of sports and advertising and its founder was a major political donor, which has increased political attention in Washington.

The failure is likely to reshape crypto regulation. Lawmakers are already citing FTX in calls for rules covering custody of customer assets, conflicts of interest and oversight of exchanges.