LAGOS/BANGKOK — Days before his FTX cryptocurrency exchange collapsed, co-founder Sam Bankman-Fried tweeted “Hello, West Africa!” — his latest nod to a region where a growing number of kitchen table investors had put their faith, and savings, in FTX.
“It hurts more than I can express,” said Osarieme Aghedo, who works in marketing at a Nigerian startup and had $8,720 in FTX as news of its implosion circulated on Twitter.Mr. Aghedo said he had been trading in digital currencies since 2017, and had lost money before as their values dipped. Many exchanges have courted users in Africa, and crypto adoption is growing in the continent, with Nigeria ranked 11th on a global index by research firm Chainalysis, which also includes Kenya and Morocco in the top 20.“Crypto has connected the global economy. I receive and pay people in crypto from many countries, and that would have been impossible before,” he said.Cryptocurrencies were designed to be free of authorities such as governments and central banks.
Singaporean Edward Choy was at work when he heard about a liquidity crunch at FTX. He immediately began getting his deposits out, just hours before withdrawals were suspended. The Monetary Authority of Singapore said it could not protect local users from the FTX collapse, as it had not given FTX a license, and that the exchange had operated offshore.
It wasn't the crypto. Most cryptocurrencies themself aren't fraudulent. In this case it was the fraudsters around it. No legitimate investment is without risk. However, there will always be someone looking to separate you from your money, no matter what form it is in.