FTX user who lost access to $120,000 will diversify into real estate

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This software developer has been investing in crypto for two years and planned to use the FTX funds for the college education of his three children. He had about five bitcoins in his account, along with a smaller position in Avalanche, which totaled around $120,000 based on November prices. “A good chunk of my savings disappeared because someone tried to defraud me.” LoadingSomething is being loaded.

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As Sam Bankman-Fried’s crypto empire crumbled, a 48-year-old software developer lost access to around $120,000 in funds on FTX US in early November.

Nauman, who asked to be identified only by his first name, is a California-based father of three and planned to use the money for his children’s college education.

He had about five bitcoins in his account, as well as a smaller position in Avalanche, totaling around $120,000 based on November prices. Insider reviewed receipts from his FTX investments, which made up about 25% of his family’s nest egg.

Cryptocurrencies and risk assets more broadly endured a bear market well into 2022, but that never bothered Nauman, as he believed in his investments and is a 25-year veteran of the trade. But the FTX implosion left a special and personal sting, he explained.

“If the funds ever evaporate, it’s a scam,” Nauman said in an interview. “Then you realize you’re part of a Ponzi scheme. That’s what really makes me angry. A lot of my savings are gone because someone tried to defraud me.”

To be sure, U.S. authorities have accused Bankman-Fried of spearheading a massive, years-long fraud by diverting billions of dollars in client funds for his personal benefit and for use in his trading company, Alameda. Research.

But Nauman said FTX’s failure hasn’t shaken his faith in cryptocurrencies, especially bitcoin. The largest token in the world by market capitalization remains, in his view, a solid long-term investment.

“My risk profile must change considering the amount of money I lost,” Nauman said. “However, it’s not that I don’t believe in cryptography.”

Still, he plans to diversify further into durable assets, such as real estate and luxury collectibles. Although the rate of return may be slower than that of more speculative assets, he said he appreciates the investments he can feel and touch in real life.

Wait for a return of funds

Meanwhile, the fate of the $120,000 in assets Nauman had on FTX is in limbo. Bloomberg reported last week that big players in distressed debt investing were monitoring clients whose assets remain stuck on the bankrupt exchange. Some offers are in the range of around 13 cents on the dollar.

When asked if he would accept an offer from a buyer to take over his lost funds claim at this appraisal, Nauman said he would rather wait for the chance to be fixed again in the future, although his expectations remain low.

Since Bankman-Fried stepped down as CEO and John Ray III took over, new management has pointed to FTX’s haphazard accounting and questionable financial records, saying it’s impossible to recoup all client losses .

Nevertheless, seeing retail investors flourish remains Nauman’s main hope.

“If it turns out that Bankman-Fried is locked up in jail and all the lenders and big creditors are taken care of, but the retail customers are left empty, that doesn’t matter much,” a- he explained. “Everyday investors are at rock bottom when it comes to pecking order, but there has to be some type of recourse for unsecured individuals.”

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