As we previously reported in the immediate aftermath of FTX’s multi-jurisdictional bankruptcy filings here, its corporate fallout affected not only Bahamian and U.S. entities, but allegedly also many crypto-related companies on the African continent.
Further detailed and often shocking (and as of recently even prurient) news about the fraudulent ponzi exchange have by now reached the mainstream mass media outlets. Their coverage of Africa, and African victims, of the scheme, however, remains lacking. AAF aims to remedy this neglect, by reporting on the adverse effects FTX’s implosion has (and will yet have) on companies and individual investors from coast to coast, from South Africa to Kenya to Morocco…
Today, we briefly focus on the quick distancing of most large African players in the crypto sphere from FTX and its machinations:
First, as we reported previously, FTX’s (highly experienced) bankruptcy administrator, John J. Ray III and his team (who notably also shepherded the highly corrupt Enron bankruptcy over two decades ago!), included at least a dozen African entities within the purported corporate umbrella of FTX. AZA Finance, one leading African exchange had the following to say in response, via its CEO Elizabeth Rossiello: “I was shocked and disappointed to see that FTX named BTC Africa S.A. and other AZA Finance entities in its Chapter 11 bankruptcy filing today. To be clear: AZA Finance entities are not affected by the FTX bankruptcy, and we are taking steps to correct the erroneous court filings.”
Second, farther down south on the continent, major South African crypto company OVEX made this statement:
“Ovex confirms the cancellation and removal of FTX as juristic representative. The public is cautioned from doing further business with FTX, as FTX is not permitted to market its offshore derivatives products in South Africa, at this time.”
Ovex’s fellow South African AltCoinTrader currently shows this banner atop its landing web page: “AltCoinTrader had no exposure to FTX, Alameda Research or SBF”, even linking a video explaining how, allegedly, ACT was able to avoid being victimized by the FTX contagion affecting seemingly the entire crypto world these days.
Affected companies or customers (knowing or unknowing, direct or indirect) of FTX should seriously consider retaining competent legal counsel, says Andreas Stargard, an attorney with Africa-focused litigation firm Primerio Ltd., as the priority claims against the now de facto bankrupt FTX will soon cascade. “FTX is now under ‘adult’ leadership, contrary to the SBF era preceding its demise. This is good and bad news: FTX is now run professionally and may well be steps ahead of its creditors. The chances of any surreptitious withdrawal of funds from the platform by any secured or unsecured creditor are zilch at this point,” Stargard said. “Note the Bahamian government’s possibly illegal sub rosa request to the SBF leadership team to use its so-called backdoor ability to ‘hack’ into FTX Bahamas and to unlawfully transfer hundreds of millions of dollars worth of BTX and ETH as well as other tokens, even after the pendency of the Chapter 11 filings in the Delaware, U.S. courts! Individual and corporate African creditors must make haste to get in line to either sue or file claims, in all jurisdictions possible or available to them!“
Third, and finally, we note that one major African purveyor of blockchain bits, Nigerian NestCoin, has not only admitted its damaging exposure to the worldwide contagion resulting from the SBF debacle — no, it has actually had to lay off many of its employees as a direct result. It lists 62 employees on its LinkedIn page, and has publicly stated that at least 20 of them, or one-third, will be laid off shortly. Its CEO stated that Nestcoin is one of several young African web3 entities that received venture-capital infusions from FTX or its (even more corrupt?) Alameda Research affiliate: “We used the closely-associated exchange, FTX, as a custodian to store a significant proportion of the stablecoin investment we raised, i.e., our day-to-day operational budget. We were not undertaking any trading, but simply custodied our assets on the FTX exchange. While there are uncertainties, including the outcome of our assets held at FTX, we as a company have to adjust our plans, rethink our strategy and take steps to better position ourselves for the future.”
We close with the — shockingly frank — words of FTX’s Chapter 11 CEO, Mr. Ray: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here, … this situation is unprecedented.” @FTX_Official
Anti-Fraud & Corruption Law in Africa 