Short answers, pulled from the story.
A cryptocurrency exchange is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, including conventional fiat money or other digital currencies. Exchanges either act as market makers earning the bid-ask spread or operate as matching platforms that charge transaction fees. Some also convert digital currency balances into prepaid cards usable at ATMs worldwide.
FTX filed for bankruptcy on the 11th of November 2022, citing what it called a liquidity crisis. At the time of its collapse, FTX was the third largest cryptocurrency exchange by volume and was valued at $18 billion. Founder and CEO Sam Bankman-Fried was charged on the 13th of December 2022 with fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States.
Mt. Gox, the largest cryptocurrency exchange in the world in early 2014, suspended trading and filed for bankruptcy protection in Japan in February 2014, beginning liquidation in April 2014. The cause was a prolonged theft of bitcoins from the exchange's hot wallet that had begun in late 2011 and went undetected for years.
Liberty Reserve was estimated to have laundered $6 billion in criminal proceeds before it was shut down in May 2013. More than $40 million in assets were frozen pending forfeiture, and more than 30 Liberty Reserve exchanger domain names were seized. Its alleged founder, Arthur Budovsky Belanchuk, was arrested in Costa Rica.
Decentralized exchanges such as Etherdelta, IDEX, and HADAX do not hold users' funds; instead, they facilitate peer-to-peer cryptocurrency trading directly between users. This structure makes them resistant to the security breaches that have affected centralized exchanges, but they tend to suffer from lower trading volumes.
In 2023, the European Union introduced the MiCA regulation, which requires all cryptocurrency exchanges operating in the EU to obtain a license under that framework by the 1st of July 2026. Earlier, by 2016, some exchanges had obtained licenses under the EU Payment Services Directive and the EU Electronic Money Directive, though the adequacy of those licenses for cryptocurrency trading had never been judicially tested.