In the first year of the pandemic, Manny Bautista started investing in cryptocurrencies — first on the exchange platform Coinbase and later on FTX, the brainchild of wunderkind entrepreneur Sam Bankman-Fried.
Two years later, Bautista and hundreds of thousands of other FTX customers are in limbo, shocked and unsure what happens next. FTX has paused customer withdrawals, and there’s growing doubt that customers will be able to recover any of their assets.
Bautista isn’t optimistic. He has lost access to crypto assets valued at roughly $35,000, according to a screenshot he took in the days before FTX tanked and shared with NBC News.
“Everything is gone in an instant, just like that? I’m pretty sure there’s no way to get it back,” he said. “It’s lost at this point.”
Bautista, 34, got the FTX itch thanks in part to flashy advertising.
He was lured by the firm’s wall-to-wall internet promotions and celebrity endorsements, and invested thousands of dollars in his FTX portfolio every two weeks, snatching up blocks of cryptocurrencies like Chainlink, Ethereum and Solana.
FTX, boosted by celebrities like NFL giant Tom Brady and pumped up by Silicon Valley bigwigs, struck Bautista as the most reliable crypto platform on the market. “You think: If this exchange is being backed by so many people, it’s safer than other platforms,” he said in a Zoom interview this week.
But then came one crisis after another. The crypto market dipped dramatically this year, cutting into the value of Bautista’s assets. Then, two months ago, Bautista was laid off from his job as a math teacher at a high school in Los Angeles County, where he lives.
Finally, a financial gut punch: FTX’s operations imploded last week. The firm has started the process of filing for Chapter 11 bankruptcy, Bankman-Fried has resigned — and Bautista lost access to his crypto portfolio.
Bautista is now driving for a ride-share service to make ends meet while he figures out his next career chapter.
He is one of more than 1 million FTX users whose crypto holdings were all but vaporized by the breakdown of FTX, one of the most spectacular downfalls in the history of technology and business.
Bankman-Fried has continued to say that he hopes the company will be able to return some money to customers. FTX and Bankman-Fried did not immediately respond to requests for comment.
The fallout is ongoing.
Cryptocurrency message boards now resemble group therapy sessions, with investors who have been through the wringer amid this year’s rocky digital currency market sending support and sympathy to their fellow traders, and many sharing stories of losing money during other recent crypto platform collapses.
The messages, in short: We’ve been there. Hang in there.
On social media, some aggrieved investors lashed out directly at Bankman-Fried, replying to his most recent cryptic tweetstorm with accusations that he had lied to customers. YouTube creators flooded the platform with explainers and analyses, alongside some creators who detailed their own losses.
Alex Bangle, 35, who makes YouTube videos under the handle Tech Tip Guru, told NBC News he had just recently moved about $3,500 in cryptocurrencies and cash to FTX. Bangle thought FTX seemed like a safe bet: well-known, big enough to start acquiring other crypto firms that were faltering and promoted by big names.
But even for Bangle, who has followed the evolution of the crypto market for years and even mined his own cryptocurrencies, FTX’s dramatic collapse was surprising. He said he always knew crypto was risky and acted accordingly, but he didn’t expect a calamity on this scale.
“I was always prepared to lose it,” Bangle said. “I wasn’t prepared to lose it that way.”
On Monday, Bangle posted a YouTube video detailing his experience with the title: “I lost it all. (FTX).”
The crisis at FTX hurts not just everyday investors but also folks who used the platform the way consumers might use a checking account or a mobile payment app.
Thomas Pompon, 23, who lives in Paris, saw FTX as the equivalent of a bank for his cash holdings and treated it the way people might use Venmo or Zelle — a way to pay friends, request cash, and transfer funds to financial institutions. FTX offered sizable interest rates — as much as 8% — for people who kept their assets, including U.S. dollars, on the platform.
Pompon said he first started trading crypto in 2017 when bitcoin started to become more popular and ubiquitous in pop culture. “Bitcoin was about to hit its all-time high, and that’s when I discovered this world,” he said in an interview on Google’s video chat service.
He regularly traded cryptocurrencies on other platforms, but FTX was the home base for his liquid cash.
Pompon, the chief technology officer of an NFT marketplace, lost access to just over $165,000 in holdings when FTX froze all accounts and blocked users from making withdrawals Friday, according to a screenshot he took the previous day and shared with NBC News.
The more than $165,000 that seems to have been wiped away amid FTX’s descent into chaos represented 60% to 65% percent of Pompon’s personal net worth, he said in the interview.
“I do not feel very good about this, honestly. I don’t know what’s going to happen,” he said.
Pompon said he is working with a lawyer and considering taking legal action against FTX to get restitution of his assets.
The legions of crypto buffs that have swarmed social media to show solidarity with people like Bautista and Pompon are offering a range of advice: Some are pleading with FTX-battered investors to tend to their mental health, while others are urging them to double down.
Bankman-Fried, for his part, could soon face the wrath of the U.S. government.
The Securities and Exchange Commission and the Justice Department are reportedly investigating his firm.
FTX and Bankman-Fried are the subjects of a class-action lawsuit filed Tuesday that alleges the platform violated Florida law, misleading customers and costing investors billions of dollars in damages. (The suit also names some of the high-profile figures who endorsed the exchange, such as Brady and his ex-wife, the model Gisele Bündchen.)
Bautista’s anger is directed in part at Bankman-Fried. But for the most part, he said, he is trying to focus on salvaging his own financial situation as Thanksgiving, Christmas and the new year fast approach.
“The holidays are coming and I’m not working right now,” Bautista said. “I’m just trying to stay positive because right now it feels like I have a string of bad luck.”
If you or someone you know is in crisis, call 988 to reach the Suicide and Crisis Lifeline. You can also call the network, previously known as the National Suicide Prevention Lifeline, at 800-273-8255, text HOME to 741741 or visit SpeakingOfSuicide.com/resources for additional resources.
If you or someone you know has a gambling problem, call the National Council on Problem Gambling for help at 1-800-522-4700, or go online at ncpgambling.org/chat.