It's an exchange, not a bank. They were supposed to be a place to hold/exchange your crypto.

Same thing happened with Voyager and Celsius exchanges. There was a lot of people scamming.

FTX was not holding customer money/crypto. They were borrowing it without customer knowledge to make other trades. So when a bank run happened which is when customers run to the bank to take out their money/crypto due to panic from falling prices. FTX was unable to give customers their money/crypto, and led to customers being locked out of their accounts. So now FTX is worth nothing, and there is a lot of people who trusted them who are going to lose everything.

This is not beautiful data