2023-09-30 15:00:04
Image caption,
Sunil Kavuri
2 hours ago
As the so-called ‘King of Cryptocurrency’ faces trial on multiple fraud charges, a Briton recounts how the collapse of Sam Bankman-Fried’s company caused him to lose a fortune and how he hopes to recover money for himself and hundreds of victims around the world.
Until the final collapse, Sunil Kavuri hoped that Sam Bankman-Fried would manage to turn things around.
The cryptocurrency king’s empire was crumbling, but while others panicked, Sunil remained calm.
The experience gained as a trader for banks and investing his money in cryptocurrency has hardened him to market dramas.
Moreover, Mr. Bankman-Fried, the self-proclaimed savior of crypto, kept saying everything would be fine.
Then a message appeared on the screen: withdrawals are suspended.
FTX, which was once the second largest cryptocurrency exchange in the world, collapsed and went bankrupt.
For Sunil, years of sound, stressful and successful operations came to naught.
His $2.1 million was gone.
“I was on the computer for almost 24 hours refreshing the page and trying to email FTX support to get my money back. I felt bad. I was like, ‘My God , it’s over. I lost everything,” he says.
Mr Kavuri, who lives in Derbyshire in the UK, was saving money to buy a new house and send his son to university, but now, almost a year later, he is left with just the written traces of what once belonged to him.
Photo credit, Getty Images
Image caption,
FTX was a cryptocurrency exchange that was marketed as a safe way for everyone to get involved in cryptocurrencies
He is considered the worst-hit British victim of the FTX collapse.
But there are victims like Sunil all over the world and he has become what he calls an “FTX creditors’ champion” by helping people file lawsuits and fight to get their money back.
“One person in Turkey was left with only $600 in their bank account after losing everything, and one person in Korea was hospitalized for panic attacks,” he recalls.
Sunil helps people from the United States, Canada, Argentina, Dubai, Turkey, Hong Kong, China and Singapore.
Most people lost a few hundred dollars, some lost thousands, and another lost millions, like him.
All victims will closely follow next week’s trial.
Image caption,
Sam Bankman-Fried, the founder of the collapsed FTX cryptocurrency exchange
US prosecutors charge Sam Bankman Fried with seven counts of fraud, conspiracy and money laundering.
The 31-year-old, founder of FTX and a cryptocurrency hedge fund called Alameda Research, has pleaded not guilty and will leave prison to go to court in New York to answer the charges.
Other executives at his companies have already pleaded guilty and are expected to testify about how their once $40 billion empire collapsed.
FTX was a cryptocurrency exchange that was marketed as a safe way for anyone to get started with cryptocurrency.
The exchange acted as an unregulated bank allowing people to exchange money for cryptocurrencies, such as bitcoin, and store their funds securely.
It has attracted nine million customers in 100 countries.
When it collapsed, more than a million users were left bankrupt because they were unable to withdraw their money on time.
The main charge against Mr Bankman-Fried is that he defrauded his clients by using their funds to support his own risky investments in his hedge fund. He spent millions on luxury properties and political donations.
Mr Bankman-Fried previously said: “I did not steal funds and I did not hide billions.”
Its downfall began following an explosive investigation by news site Coindesk into the shaky finances of FTX and Alameda Research.
Panicked customers rushed to withdraw billions of dollars from the FTX exchange, until it went bankrupt.
Shortly before his arrest in the Bahamas, Mr. Bankman-Fried said in interviews, including with the BBC, that he was sorry for the financial mistakes he had made. He insisted, however, that none of them were deliberate or criminal.
“Sam Bankman-Fried literally destroyed the lives of so many people,” Mr. Kavuri said.
Like many FTX investors, Sunil also blames the people who helped Sam Bankman-Fried rise to the top. These include influencers and celebrities who have presented the company – and its CEO – as safe and trustworthy. At its peak in 2022, the company aired an ad during the Super Bowl in the United States, in which comedian Larry David encouraged investment with the slogan: “Don’t Miss Out.” ).
Image caption,
Comedian Larry David starred in a TV commercial for FTX
Sunil has filed two of several ongoing civil lawsuits, including one against cryptocurrency industry influencers and celebrities.
It is believed that dismantling FTX’s finances could take years, with lawyers trying to get the money back any way they can.
Last week, Mr Bankman-Fried’s parents were also sued over money their son gave them in the form of cash and luxury property in the Bahamas.
Mr. Kavuri says his confidence in FTX was boosted when established venture capital firms backed trading cryptocurrencies with cash. Notably, Sequoia Capital invested $213m (£174m) in the business, which it has now written off as a loss.
“I saw that some large groups had endorsed FTX and I said to myself that this must be a legitimate exchange,” he explains.
Image caption,
Sunil Kavuri faces a long and uncertain wait to recoup his investments.
On Thursday, Sunil and his wife welcomed their second child, which makes him even more eager to get back some of the money he lost.
For now, he can only watch, wait and hope.
Lawyers for Sam Bankman-Fried said they could not comment.
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