Many crypto traders in Africa who used FTX-linked platforms are left in shock, unable to withdraw their funds and with nowhere to file their grievances.Sam Bankman-Fried has quickly become a persona non grata everywhere, including in Africa. Once hailed as a crypto guru, the collapse of his FTX exchange platform has sent shockwaves round the world, taking with it billions of investors’ money. Even as he continues to thread tweets with apologetic overtones, Africans are taking stock of their own losses.

Crypto enthusiasts who traded different coins on FTX-linked platforms have been unable to withdraw their investments while crypto startups are facing their own losses. Nigerian web3 startup Nestcoin led by former Binance Labs director Yele Bademosi admitted to being affected by FTX’s downfall and has had to lay off employees. “Last week’s events have had an impact on us, as we held our assets (cash and stablecoins) at FTX. As a company we have to adjust our plans, rethink our strategy…Unfortunately, this means saying goodbye to some of our very talented Nesters,” Bademosi said.

And while some users in the Bahamas and the US were able to withdraw their funds before the full crisis hit, African traders may never be able to access their money.

Many African central banks—Nigeria, Ghana, Kenya, South Africa, Tanzania, Uganda, Zambia, and Namibiahave been warning against the use and trade of crypto, but their citizens kept trusting the platforms in the hopes of high returns. Ethiopia recently moved from banning crypto to regulating it.

“The crypto industry has become dynamic with multiple aspects such as NFTs and the metaverse appealing to young crypto audiences. FTX’s collapse will make them cautious on which exchange they trade in. But exchanges will have to set aside Proof of Reserves to cushion customers. Government regulators will have to speed up the development of regulatory frameworks to protect consumers,” says Benjamin Arunda a Nairobi-based author of Understanding the Blockchain and member of the Blockchain Association of Kenya.

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