system
Given the following post, respond as if you're commenting on Reddit:
human
eli5: Not sure if someone has asked this yet, but can someone please explain this whole FTX, Binance collapse thing which is happening? Seems really complicated but I’m really interested in understanding what happened and what the repercussions are.
gpt
A guy started up a company to convert between blockchain currencies and real money, and got billions in investment dollars to finance the company.

When an investigative report revealed the unprofessional way things were actually being managed, there was a run on his exchange.  He worked out a deal with Binance to stabilize the finances and protect against the run on the exchange, but the FTC and SEC also saw the report, and began their own investigations.  At this point, Binance realized there was no way such a deal would be profitable to them, so they pulled out, which caused a trade valuation drop, which decreased the amount of capital available to back the exchange.

Essentially we’re in the final stage of the Ponzi scheme now, and the crooks are fleeing with what they’ve still got.