- FTX recruited students in Africa to get their friends to sign up to trade crypto on its platform, per CNBC.
- The now-bankrupt crypto exchange promised "brand ambassadors" the chance of up to 40% commission.
Collapsed crypto exchange FTX recruited students in Africa to sign their friends up to trade on its platform, telling them they had the chance of earning as high as 40% commission.
The push to enlist "ambassadors" on university campuses in Africa was one of several efforts by Sam Bankman-Fried's once-leading exchange to pull in new members on that continent.
CNBC spoke to students who were enlisted by FTX to host events and workshops targeting their friends and classmates.
University of Nigeria student Fortunate Atueyi told CNBC he was expected to get between 500 and 1,500 people to come. He was encouraged to educate prospective customers on crypto, as well as encourage them to trade.
Atueyi said he was paid as long as he hit certain attendance targets, but didn't specify how much.
In August, FTX Africa tweeted that students who signed up as brand ambassadors would get a chance to earn up to 40% commission by inviting their friends to join.
That was just four months before the spectacular implosion of FTX, which filed for bankruptcy in November. Questions remain about its handling of customer funds, and its former CEO Bankman-Fried faces charges of fraud and other criminal counts.
Before its downfall, FTX used several tactics to expand its reach in Africa. It told customers in the continent that signing up to FTX and investing in crypto would shield them from inflation, The Wall Street Journal reported.
Many African currencies plummeted last year as the Federal Reserve's interest-rate hikes pushed the dollar higher.
In the US, regulators and government officials have warned of the risks in the crypto space to consumers, given the high prevalence of scams and hype. Gary Gensler, the chairman of the Securities and Exchange Commission, has described crypto as the "Wild West".
CNBC reported that several people guided by one former campus ambassador, Imran Yahya, have lost money in the FTX collapse.
Yahya, who promoted the crypto platform at Nigeria's Bayero University, told the outlet: "As an ambassador, you preach using it."