It certainly sounds like they were misusing/stealing customers' deposits to cover losses etc, although it's possible to run an exchange which offers margin resp

It certainly sounds like they were misusing/stealing customers' deposits to cover losses etc, although it's possible to run an exchange which offers margin responsibly and still have the "run on the bank" scenario above occur. If left unchecked, losses could impact clients even if the exchange had not been misusing customer deposits as I explain above. When that looks like it will happen in normal financial markets, exchanges intervene to prevent it, although it is extremely controversial. For example, when LME halted nickel trading and canceled some deals recently[1]. [1] https://www.reuters.com/business/lme-suspends-nickel-trading-day-after-prices-see-record-run-2022-03-08/ https://www.reuters.com/business/lme-suspends-nickel-trading...