The cryptocurrency giant Futures Exchange (FTX) shocked the crypto world after the company filed for bankruptcy on 11 November 2022. The once multi-billion dollar company valued at over $30 billion as of 1 November 2022 fell to almost nothing. The FTX fall saw Sam Bankman-Fried, the founder drop from over $10 billion net worth as of October 2022 to almost zero assets as of 11 November 2022, that fall has been claimed to be the shortest in the global history of financial mismanagement.
The FTX fall began on 2 November 2022, after popular crypto and digital asset news platform, CoinDesk, revealed allegations that Alameda Research, Sam Bankman-Fried’s quantitative trading company, held FTT on FTX worth $5 billion. This allegation saw thousands of investors pull out from the platform.
FTX sought a bailout from Binance, the world’s largest cryptocurrency exchange, but all fell through after due diligence showed poor governance practices in the FTX’s dealing of customers’ funds. By 11 November 2022, FTX had lost over 90% of its market value and had declared bankruptcy.
FTX’s decline has currently affected the growing strength in the cryptocurrency market, which has been on a free fall since 11th November 2022. the Nigerian tech business space isn’t left out from this fall, with millions of dollars lost with FTX by the Nigerian tech market. This article offers insight into the top Nigerian corporations losing to the FTX fall of November 2022.
Top Nigerian tech companies losing funds to FTX
Nigerian crypto exchange startup, Nestcoin, has declared it lost over 50% of its stablecoins after the fall of FTX. Nestcoin claimed to have saved investors funds in the crypto exchange giant company over the years. Nestcoin is perhaps the biggest loser in the Nigerian crypto and digital asset market from the fall of the FTX. The crypto company has revealed that it is on the steps to lay off a majority of its workers caused by the loss.
The relationship between Nestcoin and FTX is traced to Sam Bankman-Fried’s quantitative trading company, Alameda Research, which offered funding to Nestcoin sometime in 2021. the Nigerian crypto exchange company saved its operational running budget with Alameda’s sister company, FTX.
The CEO and co-founder of Nestcoin, Yele Bademosi, revealed that customers’ funds have not been hampered by this fall, claiming that Nestcoin has over the years released only Defi protocols and non-custodial products to its customers. Bademosi also claims that Nestcoin’s stablecoins and cash were merely deposited with the FTX and not traded.
Nonetheless, Yele Bademosi noted that Nestcoin is resolved to build itself, maintain the business and avoid a reoccurrence of the FTX incidence in the future.
2. BT Pesa Nigeria Limited
Another Nigerian tech corporation affected by the FTX’s fall is BT Pesa Nigeria Limited. Incorporated in Nigeria in 2015 and headquartered at 6, Board Street. BT Pesa is a Nigerian crypto exchange company and an affiliate of FTX trading for the crypto exchange giant in the Nigerian market. BT Pesa was founded by British cryptocurrency traders Gregarek Elizabeth Anne Rossiello and Amy Stuyvesant Ludlum.
BT Pesa Nigeria Limited together with its sister company in the United Kingdom was among the over 100 companies affiliated with FTX that filed for bankruptcy on 11 November 2022. BT Pesa Nigeria Limited was believed to have saved all its assets with the FTX, thereby plunging to bankruptcy after the FTX’s fall on 11th November.
3. B Payment Services
Just like PT Pes Nigeria Limited, B Payment services is a Nigerian cryptocurrency exchange platform headquartered in Ikoyi Lagos. The Nigerian tech company was also one of the affiliated companies which filed for bankruptcy following the collapse of the FTX.
The B Payment Services offers an exchange on a variety of cryptocurrencies in the market. The crypto exchange company lost all of its assets to the fall of the giant crypto exchange company.
Other losers from the global market
The question being asked is are losers from the FTX’s fall located in other markets of the globe. The actual number of losers cannot be determined, it is believed that over a thousand crypto exchange companies will suffer one way or the other from this fall. The biggest losers announced as of today are Galois Capital and Huobi.
1. Galois Capital
United States-based hedge fund Galois Capital are one of the affected companies from the fall of FTX. The company revealed it saved 50% of customers’ funds on the FTX platform, which is valued at over $100 million. The Galois Capital founder, Kevin Zhou revealed that Galois succeeded in acquiring half of the company’s investment before the fall of the crypto exchange.
Galois Capital hopes to bounce back from this loss in the coming years, with worrisome expectations on the prospects for growth in the crypto market.
Another company hit by FTX’s collapse is Huobi a crypto exchange company headquartered in Hong Kong. The company announced on 11 November 2022, through its Twitter platform that it lost over $18 million to FTX fall. Of the over $18 million, over $10 million were customers’ assets on the Huobi crypto exchange platform while the remainder were corporate assets belonging to Huobi.
The question raised by experts in the crypto market is why a crypto exchange company like Huobi would store customers’ assets on a rival platform like FTX instead of keeping these funds in a safe accessible by them. This question has left users with more confusion than clarity, with Huobi refusing to comment.
The crypto market has been argued to be a highly volatile market by experts, nonetheless, the continued success of the industry placed confidence in users on the trade without expectations that there would be a fall in the years to come.
FTX’s fall caught the industry by surprise, within a week the once thriving crypto market came falling following a single publication by CoinDesk on 2nd November 2022.
Frequently asked questions (FAQs)
Binance is the biggest winner from the FTX loss. Binance will pick up the pieces of the failed company and cement its position as the strongest crypto exchange company in the world
There exists uncertainty and distrust in the crypto industry today. One thing is certain, the fall from grace of FTX would forever change the way crypto traders interact with the native tokens in the coming years.