The founder of FTX, Sam Bankman-Fried, arrives at the court as lawyers pushing to persuade the judge overseeing his fraud case not to jail him ahead of trial, in a courthouse in New York, U.S. August 11, 2023. LONDON, Oct 5 - Lee Rees, 43, was one of a few exchanges where the London-based crypto trader earned a good salary, profiting from fleeting price differences across the crypto market.
When the FTX collapsed last year, it took 100,000 of Rees' money, around half his annual income, with it.
Rees is among more than an estimated 1 million customers facing financial losses after FTX, one of the largest crypto exchanges at the time, suddenly collapsed and filed for bankruptcy in November. It was soon discovered that customer funds had gone missing.
Sam Bankman-Fried, the founder and former CEO of FTX, has been accused of embezzling $10 billion from unsuspecting customers to prop up his hedge fund Alameda Research, buy luxury properties and fund political donations. He was arraigned in a federal court in New York this week.
Bankman-Fried's lawyer, John Bankman-Fried, said his client had overlooked risk management but did not steal customer money. Bankman-Fried, who has not been charged, has pleaded not guilty to the charges.
Prosecutors are asking some FTX customers to testify that they were told their assets were safe and to share how FTX's collapse affected them.
customers Reuters spoke with said they have created support groups to help each other navigate the intricate bankruptcy claims process, while others said they have been targeted by scammers promising to retrieve their cash.
And some - Undeterred - are back on the crypto roller coaster.
Rees submitted his claim via a website created by bankruptcy administrators Kroll, a process he described as a 'nightmare'.
FTX has recouped $7.3 billion of the missing money as of April, but people interviewed by Reuters said they had yet to get any money back.
When he asked Reuters to withhold his full name, Maxime said he had a'six-figure' sum on FTX profits since trading crypto since 2017 that he had been trading for more than three years.
Sunil Kavuri, a financial intermediary, said he lost'seven-figures' on FTX, started posting information on social media platform X, formerly known as Twitter, to combat misinformation.
He quickly built a following and now receives dozens of messages daily from creditors asking for advice.
Creditors are also becoming targets of new scams. Maxime said he has received emails claiming he is eligible to recover his money, which takes him to a phishing site. Kavuri added that he has been targeted by similar schemes.
Some creditors, frustrated with the long waiting period, have sold their claim. Xclaim lists over 2,000 FTX claims for sale, worth around $610 million at last November's crypto prices, Sedigh said.
Maxime, who is still in debt, said if he gets his money back he will continue investing in crypto, but if not, he will stop. He said he will be more wary about which platforms he uses, but 'the industry will survive'.