But I still believe in the industry enough to try again.”
An immense amount of FTX customer and investor capital is currently locked in a bankruptcy case. People who have experienced considerable financial losses explain to CNBC that they have not lost confidence in the crypto sector and are disposing of their funds through other channels to be able to reinvest in crypto. One customer remarked, “I’m in quite a huge deficit at present. I might be forced to declare bankruptcy. But I continue to have faith in the sector enough to try once more.”, however, and says he's still bullish on the industry.
The recent multibillion-dollar cryptocurrency blowup involving FTX has failed to dampen the enthusiasm of many involved in the industry. A new documentary premiering on Monday will feature interviews with customers, insiders and investors of FTX, all of whom are optimistic about crypto despite not getting a single dollar worth of cryptocurrency back. Among them is Evan Luthra, an app developer, entrepreneur and angel investor, who mentioned to CNBC he lost $2 million dollars in the FTX collapse. Despite the significant losses, Luthra expressed that when FTX filed for bankruptcy in late 2022 he anticipated not having "access to any of this money for the next few years." Nevertheless, he still stands as a believer in the industry and shares his beliefs at crypto conferences.
"I want to make sure everyone understands that the issue here was not with Bitcoin or crypto - the reasons for us buying and using Bitcoin have not changed," Luthra stated while noting that his sizable financial loss on FTX had not impacted his bullish attitude towards Bitcoin. He added: "I think it's going to go over one hundred thousand eventually, so it's a great buy right now", referring to the fact that Bitcoin is currently being traded for around twenty-six thousand nine hundred dollars, a huge drop from its high of around sixty-nine thousand dollars in the December of 2021. "Real success is achieved when no one is paying attention", he concluded.
The collapse of FTX resulted in an investigation that revealed the missing of $8.9 billion dollars in customer assets. Sam Bankman-Fried, the founding CEO of FTX, has been charged with seven counts of fraud and violating campaign finance regulations, all of which he has pleaded not guilty to. Jury selection for his trial will start on Tuesday in Manhattan.
At a bankruptcy hearing in April 2022, an FTX attorney declared that $7.3 billion in cash and cryptocurrency had been recovered. Despite this, customers who spoke to CNBC have not received reimbursement for their losses. Jake Thacker, a customer in Portland, Oregon, disclosed to CNBC that he faces significant financial losses after being laid off from the tech industry. "I'm in quite a large deficit now," Thacker stated. "It's likely I'll have to go bankrupt."
Thacker told CNBC he "would encourage people to still invest in crypto" but also offered this caveat: "Here's what I learned, don't make the same mistakes I did." Bhagamshi Kannegundla first encountered FTX after seeing an advertisement featuring comedian Larry David that aired during the Super Bowl, prompting him to think that "all these big name people" were utilizing FTX so he believed he would be "safe using this". Unfortunately, less than a year later Kannegundla lost $174,000 -- around 60% of his crypto portfolio -- from FTX's collapse.
Kannegundla was initially concerned about how much, if anything, he would get back from the crypto market's bankruptcies. To get some funds quickly, he looked for a company that would purchase his bankruptcy claim for a fraction of its value. In the end, he sold his $174,000 claim for just 11 cents on the dollar, earning him around $19,000. Kannegundla said he plans to reinvest the money in crypto within the next decade, though he knows people may think it's an odd choice. Sunil Kavuri, another FTX customer, mentioned the exchange had received investments from high-profile venture capital firms, and so he thought it was a secure platform for his digital assets.
Kavuri revealed to CNBC in an email that he has not acquired any cryptocurrency since the collapse of FTX, citing that he needed a break from his "massive loss." During the past 10 months, he has been focusing his energy on “protecting the rights of all FTX users who experienced a financial loss due to its bankruptcy.” Despite this, Kavuri mentioned his belief that “cryptocurrencies, in general, will remain here to stay.”
Despite the dramatic events of 2022, crypto still has its supporters. Brett Harrison, who was previously the head of FTX's U.S. activities, acknowledged that the sudden failure of the parent organization surprised him. Nonetheless, he is still devoted to digital currencies. Harrison told CNBC that before he left the FTX organization, he had no idea anything was amiss and believed it was receiving considerable profits and was in a good state.
Harrison spoke of his plan and mentioned he had been accumulating funds to form Architect Financial Technologies. "I am driven to create a modern brokerage with a tech-savvy system and allow everyone to purchase digital assets, other tokenized products, and diverse asset classes" he stated. Anthony Scaramucci, the proprietor of Skybridge Capital, disclosed feeling late to the party when he didn't invest in bitcoin until October 2020. Subsequently, he established Skybridge to concentrate on digital assets.
Scaramucci informed CNBC that he had been creating a tight relationship with Bankman-Fried, but felt upset and let down when FTX crumbled following the $10 million investment in the exchange's FTT token. He declared that he continued to view "a solid bull case for Web 3," relating to technologies related to cryptocurrency and the prospect of a distributed web. "You need to show some fortitude," he asserted. "If you're going to experience a period of scam, as well as scammers and too much leverage, you have to make it to the other side."
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