French FTX cryptocurrency clients welcome Bankman-Fried guilty verdict

By Sarah Elzas - RFI
Technology  Jane RosenbergReuters
NOV 9, 2023 LISTEN
© Jane Rosenberg/Reuters

French victims of the collapse of the FTX cryptocurrency exchange were pleased with the guilty verdict handed down to founder Sam Bankman-Fried by a jurry in New York, even as they have yet to see any of their money recovered from the collapse of the company a year ago.

"A lot of people did not want to follow the trial, because it difficult for them to relive what they lost. Others followed it every day, and were overwhelmed by what was said," said Antoine Monbrun about the month-long trial in New York of FTX founder Sam Bankman-Fried.

Monbrun is the COO of the Journal du coin, a French media specialised in cryptocurrency, and he is also the founder of a support group for French victims of the FTX collapse.

“The group was unanimously pleased to learn of Sam Bankman-Fried's guilt, " he told RFI, after the jury handed down guilty verdicts on the seven counts of fraud and money laundering on 2 November.

French victims still hope to see some of their money back

Monbrun launched a Telegram channel soon after FTX collapsed and filed for bankruptcy on 11 November 2022, because a personal Twitter feed he ran was overwhelmed with panicked users.

He himself did not lose anything, as he pulled his money from the exchange at the first sign of trouble.

The group, which today has over 3,000 members, has provided moral and emotional support for people shocked at losing what for some was their entire savings.

It also provided legal advice for how to get some of the money back – eventually.

Most of the members ended up filing claims with the bankruptcy proceedings in the United States by the 29 September deadline.

Lawyers working on the bankruptcy case have said they have recovered a lot of the missing money, and it could be returned to users by the end of 2024.

People who used FTX through its European site might have a chance of getting money back sooner. Like the exchange's Japanese affiliate, FTX EU was more regulated than its parent company in the US and had to have more funds in reserve.

However, the process to recover the money, which was launched in May, has been slow.

"The problem is that the information is quite opaque we do not have access to the FTX Europe report,” said Monbrun.

The FTX EU website has a statement that the period for claiming funds is closed, and in it's FAQs it says that withdrawals could take “at least several weeks”, and “kindly” asks customers to be patient.

French victim on the witness stand

During Bankman-Fried's trial, the first witness for the prosecution was a London-based French cocoa trader, Marc-Antoine Juillard, who said he lost $100,000 when the exchange collapsed.

He told the court that he trusted FTX, and believed there were “strong financials behind the company”.

For Monbrun, this trust coming from experienced investors is what made the FTX collapse unique. It is also why he considers this to be a case of fraud, and not judgment of cryptocurrency, which is what it has turned out to be.

“FTX is the story of the collapse and fraud around a centralised platform. It has nothing to do with cryptocurrencies. It's a bit like Madoff, Enron, Worldcom - companies like that, which collapsed on the basis of accounting fraud,” he said.

But the fact that this is a fraud case in the cryptocurrency world, it has tarnished the entire sector.

“It already was difficult to defend the crypto ecosystem, because it is very technical, very complex, and because there are a large number of useless things that have been created,” he said.

“The collapse of the FTX platform validated all the biases of the people who had clichés about the subject. And as someone who is passionate about it, who sees the bad but also the good – I find it difficult to explain that cryptocurrency goes beyond FTX. The reputation has been tarnished.”