Evan Luthra says he lost more than $2 million when the FTX cryptocurrency exchange imploded last month. And he feels doubly injured seeing disgraced founder and CEO Sam Bankman-Fried making the media rounds, stating that he had no idea about the “huge management failures” and “accounting f–k-ups” that led to the collapse.
That Bankman-Fried has been holding court from what appears to be a stately home in the Bahamas, where he resides untouched by American law enforcement, is like salt on the wound.
“SBF is rubbing it in on us,” Luthra, a 27-year-old investor/entrepreneur who lives in Mexico and India, told The Post. “[Bankman-Fried] knows what he did is a crime. He is rubbing it in and, through the media narrative he’s spinning, trying to pin it as a mistake. I have no doubt that he knew what was going on. He should be in jail.”
At the Nov. 30 DealBook Summit, Bankman-Fried said: “I didn’t ever try to commit fraud on anyone.”
Luthra, a seasoned investor who once had more than $12 million in cryptocurrency with FTX, first deposited crypto with the company in 2020. At the time, it seemed to be doing things in the right way.
“I saw the ads [featuring celebrities such as Tom Brady, Larry David and Kevin O’Leary] and people I follow in the [crypto] space were promoting FTX,” he said. “I liked the product and the user experience was very good. There was a zero-percent withdrawal rate [with the purchase of FTX’s FTT tokens]. I sent money around the world and used FTX like a bank.”
But on November 2, CoinDesk revealed that Alameda Research — the trading firm affiliated with FTX — had a financial foundation built on $5 billion in FTT, the cryptocurrency token created by FTX. Changpeng “CZ” Zhao, CEO of competing exchange Binance, announced that his company would sell out its position of $529 million worth of FTT. It caused a run on the token, a collapse in its value and a liquidity crisis that led to FTX’s collapse. On November 11, FTX filed for bankruptcy protection.
Last week, Bankman-Fried claimed to have “misaccounted” for $8 billion. “I felt as if my bank had been robbed,” Luthra said. “It feels really bad to know that we had been played. I don’t mind losing money. But being scammed? That leaves me feeling pissed off at FTX and SBF.”
Luthra is one of many ripped-off clients expressing disdain for Bankman-Fried, an MIT grad who made high-rolling donations to the Democratic and Republican parties and lived fat. He occupied a $30 million penthouse, routinely brought in food from the finest restaurants in the Bahamas and threw luxurious parties. But you didn’t need to lose millions to feel screwed by it all.
After being stripped of around $5,000 in crypto, Jeffrey Harvey, who lives in Los Angeles and works in hospitality while putting himself through college, has no patience for Bankman-Fried’s casting of the events that fleeced his customers.
“Those statements are ignorant,” Harvey told The Post. “I can’t believe that he had no idea about the accounting f–k-ups. He’s a very terrible person who has done terrible things to people in crypto and out of it.
“Can we please call him Sam Bankman Fraud?”
But Harvey, 38, is just as put off by American politicians who seem to be on the wrong side of history. “I just saw a tweet, put out by [California Congresswoman] Maxine Waters, in which she wrote [to Bankman-Fried]: ‘We appreciate that you’ve been candid about what happened at #FTX.’
“She should be helping to figure out how we prevent this from happening again — not thanking him for answering questions from out of country.”
With commercials that featured celebrities and political connections who seemed enamored with Bankman-Fried — last year, Sen. Cory Booker (D-NJ) used precious seconds on the congressional floor to compliment the CEO on his “glorious Afro” — the exchange had an air of legitimacy.
“Now,” said Luthra, “we find out that the celebrities and models were there for the money. They never really believed in SBF or FTX.”
Most of the celebrities who promoted it were given equity stakes in FTX. Now, the likes of Larry David, Tom Brady and Steph Curry are being named in lawsuits against the exchange.
Plus, unlike most competitors, the operation paid clients interest rates as high as 7 percent.
Daniel Moravec had three Bitcoin on FTX when it went under, though he once had as many as 20. While managing to get half of his account out before all hell broke loose, he still figures that he lost some $30,000 worth of coin.
“I think Bankman-Fried is a criminal,” Moravec, who tweets about crypto and NFTs under the handle AdioKingeth, told The Post. “What he did is a complete meltdown of everything. And now he is out there on Twitter, apologizing. Nobody f–king cares. I didn’t mean to run you over and rob you. Does anybody care? That’s fraud, bro. He borrowed the money and couldn’t pay it back. That’s a crime.”
Moravec, 38, said that this disaster, plus that of other cyrpto exchanges going insolvent, have combined to leave him questioning the digital currency that he long embraced.
“Right now, I have very little crypto,” he said. “I probably have less than $100,000 worth of coins. Eighteen months ago, I had $3.5 million in coins. I cashed out, and lost somewhere in the $500,000 range due to exchanges busting out. You play this game and are willing to win and lose. But we were playing a game we could not win.
“The world was Sam Bankman-Fried’s oyster and he crushed it.”
Ben “Bitboy” Armstrong plans on doing something about it. A longtime crypto investor and advocate for investors — though he had no coins on FTX — he is showing up to take action. Armstrong and a small cadre of burned FTX clients already made one visit to the exclusive The Albany resort community in the Bahamas where Bankman-Fried lived with nine roommates.
“We wanted to kick his door in … but we settled for harassing from the outside,” Armstrong, 39, told The Post.
“I’m organizing a protest in which we will fly people down this month. We’re going to protest in front of [Bankman-Fried’s] home. We’re going to make it so uncomfortable. If the Bahamian government won’t arrest Bankman-Fried, he will have to flee. And I don’t know where he can go. He caused problems in Dubai; they won’t want him there. I don’t see Hong Kong letting him in. We’ll see what happens.”
