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Crypto markets are notoriously unpredictable, but volatile prices pale in comparison to this week's chaos.

The crypto exchange FTX, one of the largest crypto exchanges in the world, has filed for bankruptcy, according to a statement from the company posted to Twitter Friday morning. Less than a year ago, FTX was valued at more than $30 billion.

“The events of the last 48 hours have been a huge shock to the system and will have broader reach than some of the other crypto winter events that we've digested over the past 12 months,” Madeline Hume, senior research analyst at Morningstar, told Money Thursday.

The implosion of FTX could have wide-ranging ramifications for the entire industry. Here’s everything you need to know.

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What happened to the FTX crypto exchange?

FTX was founded in 2019 by Sam Bankman-Fried, a well-known and highly respected figure in the crypto space. The platform lets investors buy and sell crypto assets.

Last week, CoinDesk reported that FTX’s sister company Alameda Research (also founded by Bankman-Fried) was holding vast quantities of a token called FTT, which was created by FTX, and using it as collateral for loans. That report raised huge concerns from investors about the financial stability of both firms.

After Changpeng ‘CZ’ Zhao, the CEO of rival exchange Binance, announced it would sell its FTT tokens, the value of the coin began to plunge. Investors panicked and rushed to pull billions of dollars out of the FTX exchange.

The company paused withdrawals to stem the tide while it scrambled to come up with enough cash to fulfill its obligations.

A potential acquisition by Binance fell through on Wednesday. On Thursday morning, the Wall Street Journal confirmed that FTX had lent customer funds to Alameda to finance risky trades. Bankman-Fried said that Alameda Research will wind down trading, but the future of FTX is still uncertain. FTX did not immediately respond to Money's request for comment.

On Friday, the company said via Twitter that it had filed for bankruptcy and Bankman-Fried had resigned as CEO but will “remain to assist in an orderly transition.” The company will now “assess its situation and develop a process to maximize recoveries for stakeholders,” according to the statement.

What happens to FTX customers?

Sam Bankman-Fried tweeted on Thursday that customers of FTX US – the American arm of the exchange — are not affected. The exchange is “100% liquid,” he said, adding that “every user could fully withdraw.”

That’s not the case for users of FTX International. Deposits on that exchange are not protected by any kind of regulatory agency, and it isn't clear whether Bankman-Fried and FTX will be able to raise enough money to cover all of its customers’ deposits.

It’s possible that retail investors will have a “very difficult time getting their money back,” Hume says.

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Will crypto prices keep falling?

Tokens associated with Bankman-Fried plunged as the crisis unfolded. Solana, a token that he backed and promoted, has lost roughly 50% of its market capitalization over the past few days.

But Bitcoin actually rallied on Thursday. That coin is “an antidote to a lot of the seedy underpinnings of crypto that this whole scandal has unearthed,” Hume says. That’s because of how decentralized it is. Bankman-Fried, on the other hand, ran a centralized exchange and advocated for more centralization within the industry. The collapse of the centralized exchange has rattled investors.

William Quigley says he expects the crypto market to recover from the shock in the coming months.

“In the near term crypto prices will fall, but the crypto markets are resilient,” he said in email commentary shared with Money. “Within 6 months most of the negative impact from the FTX collapse will dissipate.”

How will the crypto industry react?

Experts say FTX’s collapse could take an enormous toll on the way people perceive the crypto industry. FTX “was a name that was recognized and trusted by ordinary people,” Hume says.

“People's understanding of the crypto ecosystem as a financial infrastructure has really been weakened more so by the FTX complications than anything we've seen before,” she adds.

That goes for everyone, even Wall Street. Quigley says he expects major financial players to move away from crypto, at least for now, given the upheaval of the past year or two.

This spring, the crypto luna and its associated "stablecoin" terra collapsed to nearly zero. Then, the crypto firms Celsius, Voyager Digital and Three Arrows filed for bankruptcy.

“The fact that even big companies can collapse overnight is not something big wall street investors signed up for,” Quigley says. “They will be more cautious moving forward around the crypto space.”

This story has been updated to reflect the statement FTX posted to Twitter Friday which says the company has filed for bankruptcy.

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