Bankrupt crypto exchange, FTX, was processing billions of dollars monthly in Africa and was going to set up an office in Nigeria on its way to increase activities on the continent, a recent report shows.
According to the report, FTX viewed the continent as an area of focus and its business operations across African countries were not just to increase its overall volume.
In recent years, FTX either invested or entered into partnerships with several fintech and/or crypto startups including Chipper Cash, Nestcoin, Jambo, Mara, and AZA Finance.
FTX led Chipper’s $150 million series C extension in November 2021, the first time it invested in an African company. At the time, CEO, Sam Bankman – Fried, said moving money across the continent was still slow and expensive.
“Unsurprisingly it is the fastest growing market with grassroots crypto adoption.” – Sam Bankman-Fried
While another FTX investee, Nestcoin, had funds in FTX before the bankruptcy, Chipper was not exposed, the Techcrunch report revealed. Also not exposed are VALR, AZA Finance, Bitnob, and Mara, which raised $23 million from several investors including Alameda Research in May 2022.
Interestingly, some of the investees may have been asked to hold their assets on the FTX exchange as part of their investment terms.
Until its demise, FTX had managed to acquire over 100,000 customers in Africa, many of who were trading on the platform while other customers used the platform to convert their local currencies to dollars and gain yield on savings.
The company also had 3 full-time employees in Africa working remotely and 30 campus trading ambassadors contracted to market the company and onboard customers in colleges and universities. These people are now in a bind following the company’s bankruptcy.
Below is a tweet by Harrison Obiefule, the PR and marketing manager for FTX in Africa:
It's not even a joke. I've just been too disoriented to speak. I've been getting threats and calls nonstop from celebrities, family, friends, and strangers. The repercussions have only just begun.
— Harri Obi (@Harri_obi) November 11, 2022
Besides FTX employees, individuals who held money on the exchange are also counting their losses, some of who have lost decades-long savings.
“All my UK ISA Individual Savings Account, which I saved for the past 15 years was what I lost,” said Victor Asemota, a popular opinion leader in the Nigerian tech industry and strong advocate for FTX in Africa.
According to Asemota, FTX’s bankruptcy will likely embolden Nigeria’s hawkish authorities adding that he fears for crypto companies operating in the country.
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