The collapse of FTX, one of the world’s largest cryptocurrency exchanges, has left Nigerians who trade on the platform at a loss.

The FTX announced last weekend that it had initiated a voluntary proceeding under Chapter 11 of the United States Bankruptcy Code to begin an orderly process to review and monetize assets for the benefit of interested parties.

An estimated $1 billion worth of customer funds disappeared from the failed crypto exchange, according to a Reuters report.

BusinessDay reported earlier this month that the number of Nigerians holding cryptocurrency had risen this year despite the market slump in recent months.

Finder’s latest report on cryptocurrency ownership and adoption shows that Nigeria has the second highest number of Bitcoin owners in October with 48%, up from 16.1% in the same month last year. Australia sits at the top of the table, with 61 percent of cryptocurrency owners holding Bitcoin, the world’s most popular cryptocurrency.

In August, Nigeria emerged as the most cryptocurrency-obsessed nation in the world due to the growing number of Nigerians searching the internet for cryptocurrency-related transactions, according to CoinGecko, a cryptocurrency price tracker.

Also Read: Why Young Nigerians Prefer Crypto, Others Over Local Stocks
Investors and cryptocurrency analysts who spoke to our correspondent said that the collapse of FTX would affect many Nigerian cryptocurrency traders because FTX is one of the largest trading platforms in the world.

“I have come to terms with losing money with FTX but the most painful thing has not been the money. It was faith that was shattered,” said Victor Asemota, a Nigerian entrepreneur and tech investor who identified himself as ‘FTX Shitcoin BagHolder’ on Twitter.

“This FTX thing is slowly sinking. Looking at the app, I have never been so helpless. Now I understand why people went to failing banks to pick up their cars, furniture and generators. Maybe they should sell off African clients with stakes they had in start-ups.”

Dozie Ulor, a cryptocurrency trader and investor, said many Nigerians traded on the platform and were left with nothing after FTX collapsed.

“Many Nigerians were trading and also saving money on the platform. I once used the platform. Most of the young Nigerians keep BTC, USDT, Etherium there like Binance,” she said. “Now, it has crashed and everything is gone. I have a friend who works with them. He is a senior marketer for FTX in Africa and earns 2.3 million naira a month.”

According to Ulor, the sad thing is that he gets his salary through the FTX wallet and does not save in naira. “So he keeps most of his salary there and now the platform has crashed and his seven months’ salary is gone,” she said.

Ulor said that many Nigerians trusted the platform due to its stability.

“The bankruptcy affected both those who traded and those who held coins on the platform. The currency is called FTX token. It dropped a lot from over $20 to under $1.5 now,” said Emma Onyema, a cryptocurrency investor.

“When the saga came up, the company stopped withdrawals until now and everyone lost their money because the company is now empty.”

According to Onyema, Nigerians who also bet on future trading on the platform also lost both the amount of the bet and the value that would have accompanied them if they ultimately won in the future.

He said that many young Nigerians would be lost because the platform gave rise to many opportunities that Nigerian cryptocurrency enthusiasts took advantage of.

The exchange was also involved in futures trading. “Also called leverage trading, which comes in the form of betting. People do tests, which can be positive or negative,” Onyema said.

“You get value for your bet when the prediction is correct and you lose when the opposite is true. It’s more like crediting the winner with the loser’s bet.”

Explaining how it works, the investor said: “It’s more like predicting that this time it will go up or down as a bet.

“When you predict a currency to go up, for example, and it goes up as predicted, you’ll get paid with the money wagered by those who predicted it would go down. At that point, if you don’t make a profit, it’s a loss for you.”

Raphael Idu, a financial markets analyst at CT Traders, said that many people who were aware of the market were able to withdraw their money from the platform when the FTX news broke, while those who doubted the possibility of FTX going bankrupt did not. they made. the move and they have lost everything they had.

Idu stressed that the only way to save yourself from the crypto market is to follow the news and know when your funds are at stake.

“When the rumor hit, some of the smart ones were able to withdraw their money before closing the withdrawal from the site. So those who did not take that smart step will already regret it. As a crypto expert, trader or investor, what keeps your money safe is receiving accurate news at the right time. If you don’t follow the trend, you risk losing at any time,” Idu said.