The collapsed crypto exchange FTX reportedly used the lure of high earnings to convince African university students to become its ambassadors. Many of the students were unaware of the crypto exchange’s precarious financial position and when it collapsed in the last quarter of 2022, they lost money just like other FTX users. The crypto exchange’s collapse has amplified calls for tougher regulation of crypto entities and the public’s now dimmed view of the crypto industry.
FTX reportedly used the promise of significant rewards to encourage African students to recruit new investors to its platform. The students were told they could earn commissions as high as 40%. They were required to encourage the new investors to use the platform and educate them about crypto and blockchain technology. The students had to emphasize to fellow students the benefits of using FTX.
Despite the threat of stricter regulation and the public’s now dimmed view of the crypto industry, some of the students quoted in the report said they are undeterred. Imran Yahya, FTX’s ambassador at Bayero University in Nigeria, said the crypto exchange’s collapse only proved that “no company is too big to fail.” Fortunate Atueyi, FTX’s ambassador at the University of Nigeria, said he too will be more careful and not overly trusting in the future. He added that relying on centralized exchanges like FTX is like contradicting yourself.
Gabriel Trompiz argued that while centralized exchanges like FTX have proved to be helpful in driving the crypto adoption agenda, relying on them “is like contradicting yourself.” Therefore, to ensure that he does not lose out again in the future, Trompiz said he will prioritize investing in decentralized finance (defi) platforms.
The crypto industry is still evolving and the collapse of FTX is a reminder of how important it is to be careful when trading. It is essential for investors to do their due diligence before investing in any crypto exchange or platform. They should also be aware of the risks associated with trading and take necessary steps to protect their investments.
Regulators in Africa are using FTX’s collapse to highlight the dangers of crypto trading. They are calling for stricter regulation of crypto entities to protect investors. It is important for investors to understand the laws and regulations that govern the crypto industry in their countries and abide by them.
In spite of the risks associated with crypto trading, many of the African students who were FTX’s ambassadors are still undeterred. They are determined to continue trading crypto and have vowed to be more careful and not overly trusting in the future. They are also planning to prioritize investing in decentralized finance (defi) platforms to protect their investments.
The collapse of FTX has highlighted the importance of investor protection and the need for tougher regulations in the crypto industry. It has also reminded investors to be more careful when trading and to always do their due diligence before investing in any crypto exchange or platform. The African students who were FTX’s ambassadors have not been discouraged by the exchange’s collapse, and they are determined to continue trading crypto while taking necessary steps to protect their investments.