Following the FTX saga, the collapsed crypto exchange and its sister company invested billions of funds into three Kenyan crypto and Web3 companies. How safe are these companies from the storm that has hit other companies involved with FTX?
The FTX saga has had a massive impact on the crypto market. Despite the debacle closing a plunge in crypto prices, many exchanges and other crypto firms are at the mercy of the collapse.
The FTX effects have spread to Africa. The crypto exchange and its sister company Alameda Research had initially invested billions of funds into three Kenyan startup companies.
Among the firms that had received funding from FTX include MARA, a local digital finance startup; Chipper Cash, a remittance company and AZA Finance, formerly known as BitPesa, a payment company.
What was the use of the funds?
The Pan African crypto exchange platform MARA had received $23 million (Ksh 2.8 billion) in funding from investors such as Coinbase Ventures, Distributed Global and Alameda Research. The financing would later cater to expansion and create a platform for its users to buy and sell crypto tokens using the Kenya shilling and other currencies in the region.
On March 2022, FTX again partnered with the payment company BitPesa now goes by the name AZA. AZA would receive support from FTX to push for Web3 adoption in Africa. The partnership would major in five important sectors: offering support for deposits and withdrawals using African fiat currencies on the global FTX platform.
During its Bankruptcy filing revealed on November 11, 2022, FTX listed 17 African firms. Among the listed companies, there were entities associated with AZA Finance. The payments company later disregarded the inclusion of its entities’ claims.
In early November 2021, FTX led a $150 million Series C investment for another African remittance unicorn, Chipper Cash. After the funding, the company’s value stood at over $2 billion.
Jambo and Valr are some of the other firms that had previously received funding from FTX or its sister company Alameda Research.
Related; G20 Leaders Propose More Stringent Global Crypto Regulations as FTX Bankruptcy Unfolds
The FTX effects continue to spread to Africa
After the news of the fall of FTX, Nestcoin, a Web3 venture studio, publicly disclosed that it was affected by the collapse. The studio had to lay off some workers to keep things running. Yele Bademosi, CEO of Nestcoin, explained that the firm had put into custody its assets on the FTX exchange. Nestcoin had initially raised $6.4 million in a pre-seed round with investors, including Alameda Research, Distributed global Alter global, and Serena Ventures, among others.
Other companies that have been hit hard by the FTX storm globally include Genesis, Galaxy digital, Sequoia Capital, Galois Capital, BlockFi, Crypto.com, and Coinshares, among others.
