Several employees were laid off by the company on November 14. According to people familiar with the situation, at least 30 employees were let go, while those who were left at the company had their salaries slashed by as much as 40%. The downfall of FTX is connected to the news.
In a letter to investors, Bademosi mentioned the news. The Financial Times pegs $4 million in assets in the bankrupt FTX to manage operations. FTX customers have been unable to withdraw their funds due to the company going through bankruptcy proceedings.
Bademosi said that Alameda Research had less than 1% equity in the startup. A number of African companies have received money from Alameda and FTX.
FTX and Alameda may have required portfolio companies to hold their assets on the FTX exchange as part of their investment terms, according to rumors. It appears that if such terms existed, they would not apply to every company. It was never asked for those terms. Two people familiar with the matter say that FTX offered to invest in Bitnob via stable coins, but the Nigerian platform refused. In the wake of FTX's crash, both companies stated that they had no exposure to it.
Mara didn't enter into any such arrangement and doesn't have its assets on the bankrupt platform Two people are familiar with the company's dealings with FTX. Jambo has yet to reply.
FTX acted as a bank and offered an 8% annual interest rate on the stable coin stored on the platform. It was necessary to onboard several customers in Africa in order to challenge the world's largest exchange by volume. FTX was able to acquire over 100,000 customers in Africa before it died. FTX was used by these customers to convert their local currency to dollars and gain yield on savings.
African web3 startup Nestcoin declares it held its assets in FTX, lays off employees
For the past two years, FTX built a considerable following among the crypto community in Africa by exploiting the instability of banking access and rapid adoption ofcryptocurrencies. FTX's business in Africa wasn't just another attempt to add to the platform's overall volume, it was an area of focus for the company. According to two people familiar with the company's dealings, FTX was processing billions of dollars a month and was planning to open an office in Nigeria.
After just a few months in the region, three full-time employees and a contract team of about 30 campus and trading ambassadors were needed to rake in these numbers. Many of them, including local celebrities signed as brand ambassadors, have been left unhappy by the events of the past two weeks.
On the day FTX declared bankruptcy, Harrison Obiefule, the PR and marketing manager for FTX in Africa, said he was hiding and getting threats and calls from strangers. A trader who had $2 million on FTX before the platform collapsed, as well as a retail customer who had $7,000 saved up for a World Cup trip, were among the people who were locked up on FTX.
Victor Asemota, a veteran of the Nigerian tech industry and strong advocate for FTX in Africa, said that he saved for the past 15 years. People who lose money in Ponzi schemes would be laughed at. I didn't know it was possible to happen to me. This is the largest Ponzi scheme of all time. It is the last thing anyone thought would happen.
There are repercussions for FTX. After SBF used billions of dollars from customer money to prop up Alameda Research, FTX owes over a million people and businesses money, according to the filing. As FTX and its chief executive are under criminal investigation, this event will push for changes to the regulatory regime for the digital currency. In countries like Nigeria where the government banned the use of cryptocurrencies through licensed banks and introduced a digital currency to reduce incentives for using them, the crackdown may intensify.
According to Asemota, the CBN and regulators will argue that they were right to ban the virtual currency. Because of FTX, those of us advocating for digital currency now look correct. I'm afraid for the Nigerian companies.
FTX marketed itself as a platform where people could safely trade and make money. FTX owes a lot of money. A house that commingled assets and didn't have its books in order has been revealed by its Chapter 11 filing. In one case, FTX mistakenly included the parent company of a payment platform in its Chapter 11 filing. AZA Finance and its subsidiaries, as well as other entities, were removed from the filing after FTX withdrew the statement.
In April, FTX announced a partnership with AZA Finance to roll out African and digital currency pairs, as well as expand trading in non-fungible token. According to some sources, that partnership became an M&A play when FTX was close to acquiring AZA Finance. Elizabeth Rossiello, CEO of AZA Finance, denied the acquisition talks and said that both were partners.
The chief executive said that they were either shareholders or not. We had to file a change of control in the UK if they were a shareholder. Public record shows that it never happened. They didn't invest in us, they weren't shareholders, and there wasn't an acquisition.
For the people in the back who source incorrect information @FTX_Official was a client of @aza_africa full stop. 1) They were not shareholders and we are not affected by their bankruptcy or situation. They were very small clients as they had just recently launched
— Elizabeth Rossiello (@e_rossiello) November 11, 2022
The resignation of its legal and compliance team resulted in a complete lack of internal controls for FTX. She said that it was unfair that platforms that held billions of dollars in customers' funds were not held accountable.
It's hard to raise money in fintechs with boards with a lot of information. Some people get all the funding, no governance, and no reporting because they look a certain way. I think the real story is the who gets funded question, which is why it's unfair.
All Rights Reserved © 2024
