The rapid implosion of FTX — once one of the world’s largest cryptocurrency exchanges — took the world by surprise. The exchange’s founder and CEO Sam Bankman-Fried was the poster-child of the crypto industry.
Bankman-Fried fashioned himself as a noble idealist, set on the righteous task of making the wild world of cryptocurrency a more moral and ethical place. He made headlines for being one of the rare charity-driven leaders in the crypto industry. To many, the vegan, corolla-driving, 30-year-old billionaire was the one guy in crypto they thought they could trust more than anyone else.
Unfortunately it all turned out to be a sham, with the now-disgraced CEO revealed to have been using client funds and loans from the exchange to give himself hundreds of millions of dollars to finance his failing hedge fund and pay for expensive real estate.
While the headlines are dominated by the stories of high-flying lawyers, insiders and fraudulent trading, there’s a real human cost to the fallout from FTX. It was recently revealed that more than 30,000 everyday Australians were to be found amongst the financial rubble of the exchange’s epic collapse, with many of these people losing some seriously significant sums of money.
We reached out to a number of different Aussies who were caught in the crossfire and asked how the fallout has impacted them personally.
Here’s seven of their stories:
My brother’s mates each lost $30k and $40k
“I was super lucky. Managed to get about AU$80k off 12 hours before the lock. I still have AU$2k remaining on there. I warned a crypto group to take all their funds off but forgot about my missus and my brothers mates.
Unfortunately my missus and roommate lost AU$1k each. The worst was that my brother’s mates each lost AU$30k and AU$40k.” — Josh, Brisbane.
The FTX Contagion is my biggest concern
“Right now I’ve still got US$3,600 in USDC which is stuck forever on requested. It wasn’t a huge amount but it was enough that if my work hadn’t stepped in I would have been severely impacted for the month. Honestly the biggest concern about what happened is the contagion effect. ” — Maddy, Melbourne.
Mentally said goodbye to my money
“I had US$17k on FTX before it collapsed. I’m okay. Luckily my everyday life isn’t impacted too much although I’ve got a few payments that are going to be delayed by a few weeks.
Mentally, I just said goodbye to my money. I’m going to declare it as a loss to ATO because there’s really not much else to do,” — Mark, Brisbane.
It’s definitely impacted my mental health
“I have approx US$20k stuck on FTX. It hasn’t impacted my day-to-day life much because luckily I have a good job. But it has definitely had a negative impact on my mental health I guess. I’m just trying to look at the positives and learn from it.
I’ve also got tokens stuck on Celsius as well. I’m not getting out of the market but I’m questioning some of my decisions right now,” — Michael, Sydney.
Really demoralising stuff
“I’m an Aussie based in Sydney and have been working with a crypto VC fund. I get paid in USDC and a lot of the partners hold money in FTX.
Long story short, they are concerned about whether we’ll be able to get paid as the partners are still trying to take out their funds. Personally, I’ve lost a few hundred dollars with funds stuck on FTX, but worse than that is the overall morale hit that the saga has taken.
It’s cast a dark cloud over the industry, and masks a lot of the great technology being built over the past year. Really demoralising stuff and it feels like public sentiment towards the space has been pushed back a year if not more,” — John, Sydney.
It really pisses me off
“I had AU$4,900 bucks I sent to my bank on November 4. I only used FTX for off-ramping and have already spent the money on airfares that I can’t cancel.
The FTX collapse really pisses me off. Psychologically the money had been taken off the table and was not supposed to be at risk of market forces. I don’t have the money available to replace it so I will have to hustle to find the money or sell something I don’t want to,” — Jonathan, Perth.
I still have $43k stuck on FTX
“I’d deposited AU$43k, but with the downturn in some of the assets, the value of the assets that I had stuck on FTX were around AU$37k at the time I tried to withdraw.
It’s a substantial amount, but for me personally, I’m fortunate enough that it hasn’t wrecked me financially. I think the bigger impact is with regards to my mindset in general.
Makes you feel a bit silly, some frustration and anger, uncertainty around where to from here as well as questioning the state of the industry as a whole.
I put a lot of work into my trading: fundamental analysis and technical analysis. It’s my biggest single loss by a mile and it stings all the more when it wasn’t due to a poor trade. Just need to remind myself that it wasn’t really my fault,” — Pete, Melbourne.
If you want to understand everything you need to know about FTX, we explained all of it in detail here.