sbf: the virtue was the con

How Did SBF Convince West Africans Crypto Was Their Future?

At least Madoff’s clients were rich.

Illustration: Zohar Laar
Illustration: Zohar Laar

On November 3, days before his cryptocurrency empire collapsed, Sam Bankman-Fried tweeted a hearty FTX welcome to a promising new customer base. “Hello, West Africa!” he wrote, sharing the news that FTX was accepting a new currency, West African francs, and that anyone in the region looking for somewhere to park their money, and trade a bit of crypto, could now open an account with his company. Sub-Saharan Africa accounts for just 2 percent of global cryptocurrency trading, but adoption has picked up in recent years, and crypto enthusiasts have long seen the continent as a proving ground for some of crypto’s practical applications, like facilitating remittances. Many FTX users in Africa didn’t trade bitcoin or ethereum and instead used the platform to simply convert local currencies into less volatile U.S. dollars that they could store while collecting the 8 percent annual interest rate FTX was advertising right up to its demise. The deal seemed almost too good to be true, and a Twitter user who went by BeerLife — “Lover of Beer, Blockchain, and Bull Dog” — responded to SBF’s greeting that day with a warning: “Beware West Africa, just like every other westerners you’ve dealt with this one is only looking to steal your money.”

SBF’s vision was always global in scope, and FTX’s marketing operation in Africa was a localized version of the company’s U.S. playbook. Rather than Tom Brady and Larry David, several famous Nollywood actresses and local influencers appeared in a commercial filmed by FTX Africa; instead of giving $500 in crypto to fans at a Miami Heat game in the venue now formerly known as FTX Arena, FTX Africa ran a promotion giving away $5 to Ghanaian users willing to open a new account.

Much of FTX Africa’s marketing energy was directed through dozens of campus ambassadors conscripted to recruit others to use the exchange. Most ambassadors were university students who worked for free, hoping to earn referral commissions based on how many people they recruited or to one day land a job. (Parts of the crypto world have always looked like multilevel marketing, and virtually every other major crypto player employs similar networks in Africa—one was already eagerly offering gigs to FTX Africa ambassadors now looking for work.) “To be paid, you must have hosted a successful event,” Godson Joseph, an FTX campus ambassador in Nigeria, told me. Having the privilege to host an event required being a regular presence on FTX Africa’s social-media networks, getting people to deposit money into FTX accounts, and convincing FTX Africa’s marketing team that you could get a few hundred people to show up to a pitch. Lunch was usually provided. Ambassadors could receive a commission on anyone who signed up for an account, and a decent turnout might earn an ambassador $200. Joseph, who told me he had worked for the company since February, had been expecting to host his first event in December and finally collect a paycheck.

The swift collapse of FTX devastated the people who had trusted FTX’s local promoters. Several Nigerians I spoke with told me that they, or their friends, had lost their entire life savings: six figures in one case, $10,500 in another, $100 someone had managed to scrape together. Nestcoin, a Nigerian crypto company, was forced to lay off at least 30 people after losing millions in an FTX account, and many expected the contagion to spread to other African crypto companies. “I should start by saying that I’m currently in hiding,” Harrison Obiefule, a Nigerian who ran FTX Africa’s marketing efforts, said on Twitter the day FTX declared bankruptcy. “I’ve been getting threats and calls nonstop from celebrities, family, friends, and strangers. The repercussions have only just begun.” He put a laptop up for sale on Twitter and pinned a peace-sign emoji to his account.

I also spoke to Emmanuel Godswill, a 34-year-old Nigerian who was a founding member of an unusual organization called FTT DAO, a “community dedicated to FTT, the native token of cryptocurrency exchange FTX.” (A DAO, or decentralized autonomous organization, is a sort of cryptographically enabled club.) Members proudly referred to themselves as BFFs, short for “Bankman-Fried Fans.” Godswill and other BFFs, many of whom were in Africa, held events to promote the benefits of blockchain technology and the good they could do together—donating books to schools, helping flood victims in Nigeria—if they all signed up for FTX and pooled their money. At one event, during which Godswill stood onstage in front of a ten-foot-tall banner displaying SBF’s face, he said he hoped everyone would be able to go home afterward and tell their loved ones that attending had marked “the turning point for my life.”

Godswill told me he lost some cash in the FTX collapse—“Not much, but for me it was a lot”—though even more distressing to him was the time and energy he had put into supporting SBF’s vision. Before he started working with FTX and a few other crypto companies, Godswill said he was supporting his family on $20 a month. “In the crypto space, if you put your skill to work properly, you could earn $10,000 in a month or two months,” he said, insisting it was possible to trade your way to such amounts. But how to get started? That, Godswill explained, was where FTT DAO came in. “This organization is bringing that education to your doorstep for free,” he said. “It was like salvation came.” When we spoke, he was at his home in Uyo, and the youngest of his three children was crying in the background. He was still trying to make sense of what had just happened. “It was like we were carrying that guy on our head and going into the streets—it was like evangelism,” Godswill said. “We did it passionately, selflessly. We had hope. And he crushed it.”

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How Did SBF Convince West Africans Crypto Was Their Future?