Crypto Collapse Leaves Young Nigerian Investors Fuming

Crypto Collapse Leaves Young Nigerian Investors Fuming

The Hong Kong/global crypto exchange AAX collapsed two weeks ago, following the implosion of the FTX crypto exchange, leaving students who had been tapped to recruit new investors in West Africa in a precarious – and even dangerous – situation.

Nigerian media outlets reported shortly after the collapse that Nigerian-based customers of AAX had “stormed the AAX Lagos offices” in a desperate search for their funds, demanding their money while “beating up the staff available”.

Dozens of Nigerian students have been recruited by investor-hungry firms to market cryptocurrencies to their peers, as part of an industry push to expand their reach in West Africa, where economic insecurity has drawn desperate users.

Enlisted students were required to meet monthly targets for both the number of new investors won and the total amount deposited. Some received a monthly stipend for their recruitment efforts, while others worked for free in the hopes of earning referral commissions.

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AAX student ambassadors were asked to recruit 50 users to trade USD 250 weekly on the platform, and given a monthly target of USD 50,000 in trading volume, two ambassadors said.

The exchange had recruited nearly 50 ambassadors in Nigeria as of late-2022, according to documents seen by the Thomson Reuters Foundation.

Those who met the targets were rewarded.

FTX campus ambassadors were tasked with recruiting 20 users a month to invest USD 50,000-USD 100,000 in total.

The students earned commission for every new sign on.

They coordinated and shared photos of promotional events and activities with country managers in Telegram groups. Those who met their monthly targets received an additional USD 800 in cash.

“It was always: ‘you must get 100 people, you must bring students, you must refer, you must get them to bring money,’” said Mary, 22, who joined FTX as an ambassador at the University of Nigeria, Enugu.

She asked to be identified only by her first name, for fear of retaliation.