Report: FTX Promised High Earnings to African Students That Successfully Recruited Fellow Learners

Bankrupt crypto exchange FTX has reportedly used the lure of high returns to persuade African university students to become its ambassadors. In addition to encouraging new FTX investors to use the platform, student ambassadors also had to teach them about cryptography and blockchain. Some of the students insisted that they would not give up crypto despite the loss of funds after the FTX crash.

Engaged users talk about the benefits of using FTX

Failed crypto exchange FTX has reportedly used the promise of sizable rewards to encourage African students to attract new investors to its platform, the report says. The report added that in some cases, students were reportedly asked to ensure that the investors they hired were depositing funds or trading on the platform.

In addition to encouraging new investors to use the platform, the students also had to introduce them to cryptocurrency and blockchain technologies. The students had to emphasize to their classmates the benefits of using FTX. According to Business Insider reportsuccessful students were told they could earn commissions of up to 40%.

However, according to report According to CNBC, many of the students who acted as brand ambassadors for FTX in Nigeria prior to its collapse were unaware of the crypto exchange’s precarious financial situation. Consequently, when the cryptocurrency exchange crashed in the last quarter of 2022, students were still actively recruiting and, like other FTX users, they lost money too.

As expected, the collapse of the cryptocurrency exchange and the impact it had on the wider crypto industry has increased calls for tighter regulation of crypto entities. In Africa, regulators such as Rwanda’s central bank used the FTX crash to highlight the dangers of crypto trading.

‘Too big to fail’

However, despite the threat of stricter regulation, as well as the public’s vague attitude towards the crypto industry, some of the students cited in the report said they were unfazed by it. One of the students, Imran Yahya, FTX Ambassador at Bayero University in Nigeria, said that the collapse of the cryptocurrency exchange only proves that “no company is too big to fail.” However, instead of ditching the cryptocurrency, Yahya reportedly said that he plans to be more careful this time around.

Lucky Atueyi, FTX Ambassador at the University of Nigeria, said he, too, will be more careful and not too gullible in the future.

“I kind of trusted them. I was kind of part of the people saying FTX is too big to fail. I don’t think it’s smart to leave your money there and they have full control over your money. Just like any bank,” Atueyi said.

Another student, Gabriel Trompiz, argued that while centralized exchanges such as FTX have proven to be helpful in driving the cryptocurrency adoption agenda, relying on them “is like contradicting yourself.” So to ensure he doesn’t lose again in the future, Trompitz said he will prioritize investing in decentralized finance (defi) platforms.

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