Less than a week after agreeing a deal to be acquired, the world’s second-largest cryptocurrency exchange FTX has filed for bankruptcy.

Founder and chief executive Sam Bankman-Fried, once dubbed the ‘King of Crypto’ has also resigned from the company as it continues to be investigated by authorities in the Bahamas and in the US.

The firm filed for Chapter 11 bankruptcy on Friday, with FTX’s filing estimating that it had between $10 billion and $50 billion in assets and liabilities and more than 100,000 creditors. The nature of the filing means that FTX can continue to operate while restructuring its debts, however the world’s leading payments processor Visa has severed its global credit card agreements with FTX.

In comments to Reuters, Visa said: "We have terminated our global agreements with FTX and their US debit card program is being wound down by their issuer. The situation with FTX is unfortunate and we are monitoring developments closely,"

The company also reported a suspected cyber hack on Saturday which has led it to remove trading and withdrawals.

New chief exec John Ray said on Saturday that the company was “in the process of removing trading and withdrawal functionality” and that it was “moving as many digital assets as can be identified to a new cold wallet custodian.” CNBC reported that $477 million was stolen in the suspected attack, while the Wall Street Journal put the figure at around $370 million.

Further to this, multiple reports also emerged on Saturday that FTX was missing at least $1 billion in client funds. Sources cited by Reuters said that it was part of the $10 billion in client funds that Bankman-Fried secretly transferred to sister company Alameda Research. The former chief exec denies this allegation, but had earlier in the week confessed to staff “I’m deeply sorry that we got into this place and for my role in it.”

The collapse of FTX came after reports emerged suggesting its foundation was less financially secure than previously thought. This effectively led to the crypto equivalent of a bank run, with investors withdrawing more than $6 billion in under 72 hours. As it continued to flail, rival exchange Binance agreed a non-binding deal to acquire FTX, but would pull out less than a day later after doing its due diligence.

The chief exec of Binance, Changpeng ‘CZ’ Zhao, has now called for clear regulations for the crypto industry to stop companies in the space from "cutting corners."

Speaking at the 2022 G20 Bali summit, CZ said: “We're in a new industry, we've seen in the past week, things go crazy in the industry. We do need some regulations, we do need to do this properly, we do need to do this in a stable way.

“I think the industry collectively has a role to protect consumers, to protect everybody. So it's not just regulators. Regulators have a role but it's not 100% their responsibility,"

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