As founder Sam Bankman-Fried (SBF) prepares for trial on fraud charges in the U.S., a recent Wired magazine article highlights how the failure of cryptocurrency exchange FTX affected users worldwide.
Taking a moment to reconsider that which was lost by so many around the world feels fitting ahead of SBF’s trial commencing next week.
So, while American authorities prepare for Bankman-Fried’s trial, Wired’s investigation finds non-U.S. customers left empty-handed by FTX’s bankruptcy.
The piece profiles victims like Anand, a crypto analyst in India who lost his $13,000 life savings when FTX unexpectedly froze withdrawals last November. Anand started crypto trading in 2017 and considered FTX a top exchange, so he kept most of his money there.
In Indonesia, a startup founder told Wired he lost nearly $65,000 when FTX collapsed overnight. He had previously recommended FTX to friends who lost hundreds of thousands of dollars based on his referral.
Unlike speculative crypto investing common in the U.S., the article explains that FTX served real-world financial needs abroad. In countries with unstable currencies, it provided a relatively stable store of value. FTX enabled fast, low-cost cross-border transactions for global commerce without foreign exchange complications.
Wired reports that FTX integrated with payment systems to facilitate blockchain transactions in these markets. The exchange’s collapse rippled through these systems worldwide.
Though operating outside regulations in many countries, Wired finds FTX’s reputation as a top player in crypto won global trust. Local users viewed it as low-risk despite the lack of government oversight.
Wired’s investigation reveals the bankruptcy left victims worldwide, from India to Indonesia, who entrusted their financial lives to FTX’s portrayal as a pillar of the crypto industry.
The piece highlights significant gaps in the oversight and regulation of cross-border cryptocurrency companies like FTX. Even in countries with strong consumer protections, FTX circumvented local jurisdiction.
Wired’s coverage provides a critical perspective on FTX’s global impacts that go far beyond the U.S. legal proceedings against its founder.
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