The cryptocurrency world was plunged into chaos this week with the stunning fall of FTX, a crypto exchange once valued near $32 billion that on Friday announced it would file for bankruptcy and the resignation of its chief executive.
Days earlier, industry leader Binance had backed out of a planned buyout of the troubled exchange on Wednesday after disclosing that a review of FTX’s books had unearthed “mishandled customer funds” and amid news reports that U.S. regulatory agencies were circling the smaller exchange.
The sudden collapse is being referred to as the crypto industry’s “Lehman Brothers” moment — a reference to the once-mighty investment bank whose implosion helped spark the 2008 financial crisis. One expert even described it as nearly “apocalyptic” for the sector.
Here’s what you need to know about the failed deal, the key players and what it means for consumers: