California's Department of Financial Protection and Innovation announced it was investigating FTX late Thursday. The regulator did not provide much detail in a press release, only saying it was "investigating the apparent failure of crypto asset platform FTX." A spokesperson declined to comment further.

"The DFPI is the agency responsible for administering the state's lending and banking laws, the recent California Consumer Financial Protection Law and the state's securities laws, which govern broker dealers, investment advisers, and commodities," the release said.

California becomes the first state to announce it was investigating the exchange after its failure earlier this week. Other states have already been looking into FTX, including Texas, prior to the collapse, though it's likely their investigations will expand in scope.