Mar 20, 2024 - Economy

FTX customers don't want a refund, they want their crypto back

Animated illustration of a dumpster on fire.

Illustration: Aïda Amer/Axios

Nearly 300 pages of letters from all over the world, detailing what victims actually lost in the collapse of the crypto exchange FTX, was sent Monday to the federal judge handling the criminal case against its founder.

The intrigue: Every unhappy creditor is unhappy in their own way, but many said that being made whole isn't good enough — what they want are their coins.

Zoom in: 🇦🇺 "I did not gamble with leverage trading or random meme/scam coins, I researched quality projects and made long term investments to try and change my life," a 24-year-old from Australia wrote the judge. "This would have paid off very well for me, had Sam not stolen my investments from me."

  • 🇹🇷 A person from Turkey said they had $7,356.68 in coins like CEL, DOGE, LTC, LUNC, TRX and XRP as of the bankruptcy petition date in November 2022, the amount at which they'd be made whole. They also noted what that would be worth now.
  • "In the end my 2 bitcoins is my property, it's not $140000 or $32000, it's 2 bitcoins," another victim wrote.
  • 🇮🇹 "I DEMAND that my assets be returned to me, I don't want dollars!!!" said someone from Italy.

The big picture: The letters are victim impact statements, meant to assist the judge in determining Sam Bankman-Fried's sentence next week.

  • They're intended for victims to describe the emotional, physical and financial impact they've suffered as a direct result of the defendant's crime.

There was plenty of the former for the judge to chew on.

  • 🇻🇪 Someone from Venezuela said they lost their life savings, which they admit was not millions, but covered basic needs and presented opportunity to move to another country. (Translated from Spanish.)

In a few cases, keeping life savings away from more speculative investing might have saved the day. Borrowing was also a bad idea.

  • 🇨🇦 Diane from Canada, with her husband invested CAD $100,000 into FTX; they said were confident in doing that because the name "FTX" was everywhere — on "buildings, commercials and even the celebrities."
  • A computer science professor said, "In addition to all my savings over 9 years, my wife and I borrowed $220,000 in personal loans to buy Bitcoin on the FTX platform."

There were some who plowed into alt and meme coins:

  • "I got wrecked by buying a s**tcoin ($BOBA)," one person said, but they didn't really seem to be blaming Bankman-Fried directly for it. 🤷

Others want their pound of flesh, like these people:

  • "Your Honor, as you consider the appropriate sentence for Sam Bankman-Fried, I implore you weigh not only the financial discrepancies but the human cost of his actions," one said.
  • Another: "I ask for a minimum of a 30 year sentence. This is to at least to make up for the years of life he took from me and thousands of others."

What we're watching: If SBF ends up getting 50 years in prison, that would be life — he would be 82 years old by that time, assuming he serves his sentence in full.

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