FTX was unregulated. The people giving Bankman-Fried never bothered to ask questions, so there was literally nobody looking over his shoulder. Until the problems became apparent, it wasn’t anyone’s concern.
Madoff is more complicated, but it remains that he ran a lightly-regulated private fund. (And the banks that looked the other way paid dearly for it.)
They were giving money either as donation - regulated, or as payment for services and goods - regulated, or as deposits - regulated, or as investment - regulated. Probably the only way it could have been unregulated if it were as gift, which it obviously wasn't.
>he ran a lightly-regulated private fund.
and everybody thought that he is "lightly" (if it can be applied to tens of billions of dollars) cheating like front-running or something like this, and they let him that "light cheating" for years and tens of billions of dollars until the crash.
The stealing caused the crash.