Vietnamese investors caught napping as crypto exchange FTX goes bankrupt

Hanoi resident Thanh Tuan invested $1,000 in buying FTT after seeing the token’s value drop from $22 to $4 on November 8-9, hoping to sell them for a profit when the price went up again.

However, on November 16, the value of FTT tanked to around $1.6. Worse still, almost no trading was taking place because there were only sellers and no buyers.

Today, the 32-year-old investor regrets his decision and is afraid he might be left with nothing.

Ngoc Vi, an office worker in the central city of Da Nang, bought 300 tokens for $1,050 on November 10 after seeing its value drop to $3.50.

After her last successful “bottom-fishing” attempt, she believed that a leading exchange like FTX would be “rescued” by investment capital and the value of its token would recover, eventually.

She was dismayed that FTX, founded by Sam Bankman-Fried, filed for bankruptcy on Nov. 11.

After six days, the total value of Vi’s FTT tokens fell below $500 and could well be considered “junk coins” on par with the Luna token that has also fallen from great heights.

Tram Anh of Da Nang still refuses to believe that her savings of nearly ten years have vanished. The 30-year-old said she joined the crypto market in 2017 and chose FTT as her go to token since she trusted Bankman-Fried’s vision.

She had deposited roughly $3,000 worth of USDT (popular stablecoin pegged to the US dollar) in cryptocurrency exchange FTX. She also invested a “heavy chunk” of money in “promising” FTX-related projects like Solana, Near, Aptos and others.

However, these are currently selling for three to five times less than they did before FTX declared bankruptcy.

Vietnamese investors are frustrated that the FTX platform has halted withdrawals. Many went to the official FTX Telegram account for the Vietnamese community, with nearly 10,000 members, to vent their anger.

However, all they found was a pop-up message that said the group had been deactivated and questions should be directed to the worldwide support staff. Many left the group, realizing that nothing could be done.

With trading on the exchange impossible, currently, most investors took to sharing their stories on social media and other crypto forums. The talked about how much they could lose and urged others not to be deceived by tricksters into buying FTT tokens now.

Meanwhile, on the worldwide support forum, many people have reported that they have login issues and are not receiving any assistance from the admin.

Representations of cryptocurrencies are seen in front of displayed FTX logo in this illustration taken November 10, 2022. Illustration photo by Reuters/Dado Ruvic

Meltdown too sudden

“Compared to the Luna crash, the damage from FTX is more damaging because it is a large exchange. Not only that, many Vietnamese had put money on this exchange because it offered high interest rates,” said Hoang Quan, administrator of an FTX trading club on Facebook.

Quan said that the FTX “meltdown” was too sudden and could not be controlled; causing losses for even seasoned crypto traders.

Counting only those Vietnamese investors with trading accounts on FTX, thousands are impacted, he added.

“Thousands of people were involved in FTX’s Telegram and Facebook community groups when the trade was running smoothly. Now members report losing tens of thousands of dollars because they were unable to make timely withdrawals,” he said.

It has been reported by Reuters that at least $1 billion of customer funds have vanished from collapsed crypto exchange FTX.

The exchange’s founder, Sam Bankman-Fried, secretly transferred $10 billion of customer funds from FTX to his trading company Alameda Research. A large portion of that has since disappeared, the report said. One source put the missing amount at about $1.7 billion. Another said the gap was between $1 billion and $2 billion.

On November 13, one of the administrators of the FTX Telegram group made the following statement: “The FTX exchange has been hacked. All the money has dried up.”

This person showed people how to uninstall the FTX app and urged people not visit the FTX website because it may contain malware.

In other words, folks like Tram Anh won’t be able to retrieve their savings because of the impasse.

The fall of FTX has also had a direct impact on other projects related to Bankman-Fried. The investment portfolios of FTX and Alameda include well-known Vietnamese ventures like C98 and Sky Mavis.

Industry experts have speculated that the cryptocurrency market may go through a “protracted winter” as a result of the FTX meltdown, which they say has not only destroyed users’ assets but also undermined faith in cryptocurrencies.