Get up early. Take the subway, bus, S-Bahn or get stuck in traffic. Work eight hours (minimum). Save for months or years. Invest in cryptocurrencies. lose it The last episode of this sequence was suffered by more than a million people around the world just a few days ago due to the bankruptcy of the Bahamas-based FTX platform. The bankruptcy of one of the most popular portals for buying and selling digital assets among users makes 2022 a black year for the industry, which has already been hit by the collapse of the cryptocurrency Luna and the Three Arrows Capital fund, among others. The avalanche of bad news is fueling the disillusionment of many who have been their staunch defenders, watching helplessly as their money disappears overnight.
“Big scams have always existed, now it’s our turn,” said David, one of the victims of the FTX crash. He has joined a Telegram group in which 600 Spaniards and Latin Americans share information about their remote chances of getting something back, discuss lawsuits and generally talk about anything related to the implosion of the company owned by Californian Sam Bankman -Fried, probably in his mid-thirties, became one of the most hated men on the planet right now, whose whereabouts are unknown, after he put up for sale the $39.5 million mansion in the Bahamas where he lived when he was nine FTX colleagues lived.
There is also regret and sadness in the conversation. It is not easy to understand that the numbers that used to fill their accounts and fill them with peace of mind have been replaced by a zero. “If you save for months and see you’ve been robbed, you look like an idiot. The world is more of a bastard than meets the eye,” says David, who chooses not to say how much he’s lost.
Like others affected, he separates the collapse of FTX, the intermediary through which they operated, from the development of cryptocurrencies themselves, which he continues to believe in despite what has happened. “This case makes me lose faith in people more than crypto. Technology has not failed. Sam Bankman-Fried and his team failed,” he concludes.
FTX founder Sam Bankman-Fried
RL, a man from Bilbao who was also affected, made a similar statement. “It’s like Telefónica going bankrupt. The internet would continue to function,” he compares. He has been investing since 2016 and is considering taking legal action. “It wasn’t an amount that would cause me financial difficulties in the short term, but obviously I would have preferred not to lose it,” he says. In his environment, the impact was much grosser: he knows people who have left hundreds of thousands of dollars in the FTX bufo.
The psychological aftermath of such a sudden and unexpected shock can be difficult for some to overcome. “Right now I’m sick, I don’t know what to do with my life, I had a large part of my savings in FTX. When I heard the news I started crying. I work and earn minimum wage. I have a son, I’m fucked up and I’m separated. I thought about suicide. That’s not fair,” says one person who would prefer to remain anonymous.
The amounts lost are far from one customer to another, and what may seem like a small amount to some is years of savings to others based on hard work. “I lost 12,000 euros. this is hell It’s a nightmare. I’ll try to do sports and focus on my health,” commented another victim consulted by the newspaper.
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Most don’t want to expose themselves publicly. On social media, there are those who claim to rejoice in the financial disasters associated with cryptocurrencies because they present what they see as an inflated bubble of no real value, feeding the excessive greed of a few. But the reality is that whether they succeed or not in the future, along the way they have already left rivers of torment in people who do not always have enough resources, also face family reproaches and the shame of making a wrong choice to have .
mistrust
FTX’s first post-bankruptcy analysis, conducted by new administrator, veteran John Ray III, gives those affected little cause for optimism. In a devastating 30-page document, he says he’s never seen such a lack of control in the way a company is run. And the former Enron liquidator has seen a lot in his 40-year career.
In his letter, he describes company practices that are less conspicuous: employee expenses were approved using emojis in a messaging group; Homes bought with funds from the platform were put in the names of consultants and workers; Bankman-Fried was given a $1 billion loan and there was virtually no accounting, so the trail is still being followed to find all cryptocurrencies owned by FTX clients.
In this scenario of administrative chaos, many give up their investments as lost. In any case, José Antonio Bravo, head of cryptocurrency taxation at Àgora, predicts that the process of determining whether value can be extracted to devote to compensation will be lengthy. “We have the clearest example in MtGox’s bankruptcy, which began in Japan in 2014, and the partial refund to depositors is expected to take place during 2023,” he points out.
The collapse of FTX, valued at $40,000 million – similar to Banco Santander’s market cap today – not only wiped out most of its billionaire founder’s fortune, which is valued at around $16,000 million (a similar amount in euros). ). It has also spread distrust of anything bearing the cryptocurrency surname.
Bitcoin is piling up new falls – it’s down more than 60% so far this year. And many users are choosing to move their cryptocurrency to so-called cold wallets, devices where they can store it offline without the risk of intermediary platforms like FTX going bankrupt — “if it’s not your keys, it’s not yours.” Crypto,” says one. Saying very popular with investors. They are also not entirely harmless: if the keys or the hard drive on which they are stored are lost, the cryptocurrencies disappear too.
In this rarefied atmosphere, the contagion effect is worrying. The entanglement is clear: hours after FTX collapsed, cryptocurrency firm Genesis froze withdrawals and new lending. And that, in turn, affected Gemini, the platform owned by the Winklevoss twins, famous for having disputed the intellectual authorship of Facebook in court with Mark Zuckerberg.
Many of those ruined by the FTX crisis care little whether or not the shockwave reaches the rest. With their money gone, they are experiencing an emotional rollercoaster ride in the Telegram groups, fueled by rumors and false news that as soon as they hope to regain some of what they lost, a pitcher of cold water will be thrown down on them .
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