How FTX Roped African Students Into Trading On Its Platform

African victims are speaking up about FTX after a variety of promotional schemes lured them into putting their money into the now-defunct industry giant. 

One such deal was an ambassador program promising 40% commissions to members who invited their friends to join the exchange. 

Africans Speak Out

FTX Africa promoted its ambassador program in early August – roughly 3 months before the exchange froze user withdrawals and filed for bankruptcy, due to a multi-billion dollar shortfall on customer and investor deposits. 

The program was largely targeted toward African students, who were encouraged to get their friends and classmates to onboard the exchange. The platform was popular in the region not only as a means of trading crypto, but for exchanging local currency into U.S. dollars, making FTX a de-facto bank for many. 

CNBC spoke with multiple students involved in the program. Gabriel Trompiz said he was contacted by FTX through LinkedIn, and recognized as someone who could promote the company at his college. Though he quickly applied and became an ambassador, no contracts were signed, and he ultimately was never paid. 

By contrast, a member of the existing campus ambassador program in Africa – Fortunate Atueyi – said he was paid, but only if he met key requirements like getting others to trade and deposit money.  Atueyi frequently hosted workshops and events surrounding crypto education for students. 

“They’re expecting to see about 500 to 1,000 or 1,500 students in attendance. So you teach them about cryptocurrencies, blockchain technology, and most importantly the benefits of using FTX,” he told CNBC’s Make It.

Imran Yahya – an FTX campus ambassador at Bayero university – said he promoted the exchange to his school and community while creating FTX-related content. Many who listened to him lost money on the platform. 

Lessons Learned

None of the three students were expecting FTX to crumble, with Atuyei being told by senior FTX employees that rumors of the exchange’s insolvency were just FUD spread by rival firms.

Nevertheless, the former ambassadors still have faith in crypto more broadly, believing that the purpose of decentralization is precisely to counter problems like this. 

All three lost some money, but Trompiz stored most of his crypto investments in his own crypto wallet. He plans to refocus his investments into DeFi, mimicking many investors who turned to DeFi and self-custodial wallets after FTX collapsed. 

“The only thing that the collapse of FTX taught me that there is no company that is too big to fail,” said Yahya.

Shark Tank star Kevin O’Leary was paid $15 million to promote FTX. To this day, he largely blames Binance for coordinating its rival exchange’s collapse.