At first, Anand thought it was just a glitch. He’d read a few tweets saying that withdrawals from FTX—then the second-largest cryptocurrency exchange in the world—had been suspended. But these things had happened before in the crypto market, he said, “when they do server maintenance or something like that … so I didn’t take it very seriously.” The next morning, he woke up to find Twitter had gone wild. #FTX was trending. He tried logging in to the website, but couldn’t access his account to withdraw his funds.

Anand, who asked to use a pseudonym to speak about his private finances, lives in South India and works as a crypto research analyst. By the time FTX collapsed, he’d been investing in tokens for around five years. After reading headlines about the price of bitcoin jumping from $500 to $8,000 in just a year, he bought in. “I invested a little bit of money, and overnight it had risen by 200 percent. That was my first ever trade,” he says. From 2020 on, Anand had done most of his trading on FTX. By November 2022, he had more than 90 percent of his funds invested on the platform, around $13,000. The company’s sudden collapse that month took him entirely by surprise. “I have been in crypto since 2017, and I have never seen something like this, where the entire exchange goes bankrupt and the users lose their money,” he says. “I couldn’t believe this was happening to me.”

The next day, Anand had to come to terms with the fact that his money was probably gone. “It was unbelievable. All my financial calculations went out of the window. I was in a very bad place for a couple of months after that. A lot of my friends were also using FTX,” he says. “What I did wasn’t supposed to be risky. If I had kept my money in a shady exchange, and it had gone bust, I would be at fault. But FTX was among the top two exchanges.”

FTX’s founder, Sam Bankman-Fried, is scheduled to go on trial on October 2, charged with fraud and conspiracy. The US Department of Justice alleges that Bankman-Fried, known by his initials, SBF, used FTX customer funds to fund risky crypto trading by an associated firm, Alameda Research. When, in early November 2022, there was a run on the exchange sparked by concerns about the links between the two companies, FTX couldn’t cover the redemptions and folded, leaving hundreds of thousands of clients out of pocket, with their investments locked up in the bankrupt exchange.

The crypto world’s eyes in the coming month are likely to be trained on the New York courtroom, and lurid accounts of polyamorous relationships, political donations, and celebrity endorsements. But the impacts of FTX’s collapse stretch a long way from the US East Coast, and FTX’s Bahamian headquarters. The company actively pursued customers and partnerships in emerging markets, signing up people like Anand, who won’t be represented in the courtroom and who are unlikely to recoup their losses.

Even before FTX’s collapse, the crypto “winter” that preceded it, and the bust of 2018, investing in cryptocurrencies was widely seen as a form of gambling in much of the global north. But in parts of Asia, Latin America, Africa, and the Middle East, crypto had other uses, which look a lot more like those its early evangelists used to pitch.

In countries like Nigeria, Argentina, and Lebanon, where the exchange rate was prone to wild fluctuations and the money in your bank account could drop in value overnight, crypto could be a store of value in a parallel financial system. It could’ve been safer to keep your money in a stablecoin, a crypto token pegged to the value of a hard currency, than in nairas, pesos, or pounds. FTX, like other exchanges, often paid interest on customers’ deposits too, meaning accounts could effectively be used like a bank. For others, using crypto was a way to avoid high charges on money transfer services, meaning they could send and receive money from relatives overseas. They could also be used as a way for entrepreneurs to trade more easily with overseas suppliers and customers, without having to deal with foreign exchange brokers or payment gateways that may not support local currencies.

In emerging markets, people are often “facing a problem that feels impenetrable,” says Denelle Dixon, CEO of the Stellar Development Foundation, a financial inclusion nonprofit. “In some instances, they’re afraid of the banks, because they’re government run … There’s not a fear of blockchain. It’s seen as an opportunity to do things differently. They’re willing to take that chance.”

That meant crypto—and FTX—had become embedded in people’s everyday transactions and in payment gateways for ecommerce. “Suppose you are selling a T-shirt and you are integrating a payment gateway like PayPal,” explains Sidharth Sogani, CEO of Crebaco, a cryptocurrency research company. “The buyer is sending bitcoin for the T-shirts, but you want that money in USD, and the transaction should happen quickly. So that payment gateway [before FTX’s collapse] used to accept money in bitcoin from the consumer, send it to FTX, convert it to USD, and give you the payment in USD in your bank account in a matter of 30 seconds … When FTX collapsed, that payment gateway, which had funds in FTX as a buffer, also lost all that money.”

As a result, when FTX went down, the impact rippled out through a much broader ecosystem of payments companies, customers, and partners. “FTX had the investments and roots to support the existing crypto ecosystem,” Sogani says. “About 100 companies must have collapsed just because of FTX.”

Of course, not everyone who traded did so to overcome some structural defect in the local financial system. The number-goes-up culture of crypto boosterism found its mark all over the world. Middle-income countries—or societies where rapid economic growth created bubbles of wealth for one generation, but left the next facing mounting bills and dwindling prospects of leapfrogging their parents’ incomes—seem to have been fertile ground. It helped that some of those places also had regulators that hadn’t yet caught up with the pace of change in the industry, or consumers that weren’t being apprised of the risks. But even in places with reasonably advanced protections, the global nature of FTX’s business meant it could still bring in clients while operating outside of local regulations.

In Indonesia, where crypto adoption has been picking up speed in recent years, trading volumes on FTX reached 106.5 billion rupiah (almost $7 million) in the first 10 months of 2022, according to Tirta Karma Senjaya, head of development at the Commodity Futures Trading Bureau of the Commodity Futures Trading Regulatory Agency (CoFTRA), an Indonesian crypto regulator. According to the regulator, there are nearly 18 million crypto asset investors in the country. After the run on the FTX tokens began, the regulator “took steps to advise crypto traders already registered with CoFTRA to stop trading FTX tokens,” Senjaya says, adding that the supervisory regime has been strengthened since last year.

But FTX wasn’t regulated in Indonesia. “Our rules are very good regarding customer protection,” says Teguh Kurniawan Harmanda, head of ethics at the Indonesian Crypto Asset Traders Association. “FTX operated outside of Indonesian jurisdiction, outside Indonesian rules.”

That people trusted FTX despite its outsider status wasn’t surprising, because the exchange seemed to be stable. It was infrastructure, one of the biggest companies in crypto, with a massive global user base and a founder who was being portrayed in the international press as a genius billionaire. People in the tech sector who might have otherwise been more cautious fell for the company’s image. One startup founder and investor in Indonesia, who spoke on condition of anonymity, says he first got into cryptocurrencies after reading a paper that Bankman-Fried had coauthored. “I was more interested in the technology,” he says. “The crypto ecosystem was something rapidly changing, and it provided an environment where people could launch a product, a company, really fast.”

“Then it collapsed,” he says, “and the money was gone.” He lost almost 1 billion rupiah, around $65,000, in the FTX bankruptcy. “It hurt, but what actually hurt the most [was] that I’d already recommended [FTX] to at least two of my friends.” They lost hundreds of millions of rupiah. “The moral burden was very, very high.”