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Some wealthy people lost millions in the FTX collapse. But others say they've lost their entire life savings.

Shattered FTX logo
Some small-time investors in FTX say they lost their entire life savings in the 2022 collapse.NurPhoto/Getty Images
  • Prosecutors asked a judge in a sentencing memo to give Sam Bankman-Fried up to 50 years in prison.

  • The memo includes statements from victims who say their lives have been upended by the FTX collapse.

  • One victim said his opportunity to "break the generational poverty" in his family was stolen.

When FTX imploded in 2022, some of the wealthiest individuals who invested in the cryptocurrency exchange platform and attached their names to the company lost millions of dollars.

Star NFL quarterback Tom Brady, who received a multimillion-dollar deal to be the leading FTX brand ambassador, was estimated to lose $30 million in the aftermath of the collapse.

Companies and venture capital firms also saw their money vanish. Sequoia Capital deemed its $213.5 million investment worthless but assured its investors in a letter that the damage was offset by $7.5 billion in realized and unrealized gains that year. Other VCs have chimed in: That's not that bad.

But victims of the FTX collapse aren't limited to wealthy investors and firms, as prosecutors noted in a recent sentencing memo requesting a federal judge to hand disgraced FTX founder Sam Bankman-Fried 40 to 50 years in prison.

"The defendant victimized tens of thousands of people and companies, across several continents, over a period of multiple years," prosecutors wrote.

Some of those faceless victims, according to testimonies published in the court documents, include a single mom who said she lost her life savings, a brother who hoped to use the earnings from his investment to help his sibling with his "disability," and a partner who said the losses had destabilized their family's lives.

"The financial loss we incurred was significant — not just in monetary terms, but in the stability it provided our family. We were brought to the brink of losing our home, struggling to meet mortgage payments and maintain a semblance of normalcy for our child," the victim wrote.

Many of these smaller investors don't come anywhere near the seven- to nine-figure investments celebrities like Brady or VCs like Sequoia Capital put into FTX. Nor do they have any type of gains to fall back on.

The losses, some victims say in their statements, represent all the money they've saved for years and were relying on to support their own and their family's lives.

One victim who claimed to be living in Africa said he had bought 3 bitcoins for his "family savings" said that the investment toward FTX was "hard-earned to break the generational poverty," according to the court documents.

"Now you have swapped in and stolen all of this," the victim wrote of SBF. "You have single-handedly broken a self-made opportunity."

At the time of the collapse, FTX's bankruptcy filings said that the exchange could owe money to about one million creditors. Bankruptcy lawyers identified in 2023 a $9.5 billion shortfall in crypto and cash that needed to be repaid to customers.

In February, lawyers for FTX's debtors told a Delaware bankruptcy court that customers and creditors can expect to receive full restitution, Axios reported.

If you lost money in the FTX collapse and would like to share your story, reach reporter Lloyd Lee at (646) 768-1630.

Read the original article on Business Insider