Victims tell how their lives changed due to FTX collapse

• In a sentencing memo, prosecutors asked the judge to give Sam Bankman Freed the maximum sentence of 50 years in prison.
• The memo includes statements from victims who say the collapse of FTX changed their lives forever.
• One victim said his family was robbed of the opportunity to “break generational poverty.”

When FTX collapsed in 2022, some of the wealthiest individuals who had invested in the cryptocurrency exchange platform and had their names attached to the company lost millions of dollars.

Tom Brady, the NFL’s star quarterback, signed a multi-million dollar contract as a top ambassador for the FTX brand, but is estimated to have lost $30 million in the aftermath of the bankruptcy.

Businesses and venture capital firms also lost money. Sequoia Capital determined its $213.5 million investment was worthless, but told investors in a letter that the loss would be offset by $7.5 billion in realized and unrealized gains that year. Guaranteed. Other venture capitalists agreed: “That’s not such a bad thing.”

But as prosecutors noted in a recent sentencing memo, they are asking a federal judge to sentence disgraced FTX founder Sam Bankman Freed to 40 to 50 years in prison. The victims of the FTX collapse are not limited to wealthy investors and corporations.

“The defendants victimized tens of thousands of people and businesses over multiple years and on multiple continents,” prosecutors wrote.

According to testimony released in court documents, some of these faceless victims include a single mother who said she lost her entire life’s savings, and a mother who used the proceeds of her investments to help her “disabled” sibling. The brother, who had wanted to spend his life in prison, and his partner said the loss had left the family’s life unstable.

“The financial loss we have suffered has been significant, not only in terms of money, but also in terms of the stability it has given our family. We were brought to the brink of losing our home and had to pay off our mortgage. I struggled to maintain a normal life for my children,” the victim wrote.

Many of these smaller investors can’t match the seven- to nine-figure investments that celebrities like Brady and VCs like Sequoia Capital have made in FTX. There is also no profit to fall back on.

Some victims said in statements that the losses represented all the money they had saved over the years and relied on to support themselves and their families.

According to court documents, one of the victims, who claims to live in Africa, said he bought 3 Bitcoins for “family savings” and that investing in FTX “will help break generational poverty. “It’s something I worked hard to earn.”

“Now you traded and stole all this,” the victim wrote about SBF. “You single-handedly defeated the opportunity you created.”

At the time of its collapse, FTX’s bankruptcy filing stated that the exchange may owe debts to about 1 million creditors. Bankruptcy lawyers have identified a $9.5 billion shortfall in virtual currency and cash that needs to be repaid to customers in 2023.

Axios reported that attorneys for FTX’s debtors told the Delaware Bankruptcy Court in February that customers and creditors can expect to receive full compensation.

If you lost money in the FTX collapse and want to share your story, contact reporter Lloyd Lee at (646) 768-1630.