0:02

Hey there, this is Felix Contreras, one

0:04

of the co-hosts of Alt Latino, the

0:06

podcast from NPR Music where we discuss

0:09

Latinx culture, music, and heritage with the

0:11

artists that create it. Listen now to

0:13

the Alt Latino podcast from NPR. In

0:21

this episode, we mentioned an AI company called

0:24

Anthropic. We should say they are a sponsor

0:26

of NPR. This

0:28

is Planet Money from NPR. These

0:33

days, when most people hear about the

0:35

cryptocurrency exchange FTX, they think of one

0:38

of the great financial meltdowns of the

0:40

21st century. But there is

0:42

this huge other part of the story,

0:44

about the obscure corner of the financial

0:47

world that feeds off of disasters like

0:49

this. To tell that story,

0:51

we're going to start with someone named

0:53

Begumshi Kanagundla. In early 2022, he

0:55

had just opened up an account with FTX.

0:58

The platform was legit. It was really

1:00

easy to follow, really easy to do

1:03

stuff. Your transaction fee was very low.

1:05

I mean, it was

1:07

great. Begumshi had found out about the platform

1:09

the way a lot of people did, through

1:11

a Super Bowl ad starring comedian Larry David.

1:14

It's FTX. It's a safe and easy way to get into

1:16

crypto. Eh, I don't think so.

1:19

And I'm never wrong about this stuff. I

1:21

was like, oh man, Larry David's hilarious. Yeah,

1:23

who doesn't love Larry? Exactly, exactly. I mean,

1:25

come on. Begumshi works in IT

1:27

and he is a big believer

1:30

in blockchain technology. But he

1:32

says for investing, he just wanted an

1:34

easy way to buy and sell crypto

1:36

without having to deal with the blockchain

1:38

stuff himself. Over six months or so,

1:40

Begumshi built up over $200,000 worth of Bitcoin and Ether

1:42

and other crypto

1:45

in his FTX account. And

1:48

then one day in early November, he

1:50

started to hear some unsettling news. Chaos

1:52

in the cryptocurrency market. FTX, one of

1:54

the biggest players in the digital money

1:56

markets, is now on the verge of

1:58

bankruptcy. Over the weekend. Speculation rose

2:00

about the solvency of FTX calling into

2:03

question whether this was all house of

2:05

cards for several days now Crypto currencies

2:07

have been in a freefall when you

2:09

use the word collapse in the financial

2:11

world You're talking really serious stuff all

2:14

of a sudden there are allegations that FTX's

2:16

founder Sam Bankman freed and his colleagues May

2:19

have been using FTX customer deposits

2:21

the money that people like Baghamshi

2:23

had put on the platform to

2:26

make risky Investments now

2:28

there seem to be billions of dollars

2:30

missing from the company's books I

2:33

was just like oh my god. This looks like

2:35

it's a Ponzi or something in my head I

2:37

was thinking at that point you were like this

2:39

smells like foul play this smells really really bad

2:43

The Gramsci started trying to get his money out

2:45

of FTX along with a ton of other people

2:48

But then the company stopped allowing

2:50

customer withdrawals all together and

2:53

just nine days after all of this

2:55

started Sam Bankman freed signed over his

2:57

control of the company to a new

3:00

emergency CEO who almost

3:02

immediately filed for bankruptcy

3:05

Do you remember where you were when you heard

3:07

that they were declaring bankruptcy? I was in the

3:09

gym working out and I was just like so

3:11

depressed so then I worked out even harder that

3:13

day You got to

3:16

make your gains somehow Exactly exactly yeah, it

3:18

was a very very sad

3:20

workout day But

3:22

Gomeshi had managed to get some 40 or

3:24

50 thousand dollars worth of crypto out of

3:27

FTX before his account got frozen But

3:29

he still had more than a hundred

3:31

and fifty thousand dollars locked up inside

3:34

It seemed of a Gomeshi that FTX was

3:36

going down in flames and

3:39

that it was bringing the crypto market down

3:41

with it I was just like

3:43

oh my god I think I think

3:46

I'm gonna lose everything for Baghamshi his

3:48

FTX holdings were starting to feel something

3:50

like Toxic assets they seemed like they

3:52

might be worthless at that time.

3:54

I was in the lowest point in my life Okay,

3:57

and I was just thinking to myself. What the hell can I?

4:00

do with these toxic assets. I

4:02

had no clue what to do with them. So

4:04

he starts poking around the internet for a

4:07

way to get any sort of value out

4:09

of his frozen FTX account. When

4:11

he stumbles across this online

4:14

marketplace called Xclaim. He

4:16

gets on the phone with someone from

4:18

Xclaim who explains the new situation. Now

4:21

that FTX has declared bankruptcy,

4:23

Begumshi owns a bankruptcy claim.

4:25

Basically an IOU that FTX is

4:27

obligated to pay him back if

4:30

and when they can recover enough of the missing

4:32

money to do so. And

4:34

then the agent explains, Begumshi can

4:36

actually sell that IOU. I

4:39

was just like, wait, there's a way

4:41

to sell this toxic asset? I was

4:43

like, I was in disbelief. Hello and

4:45

welcome to Planet Money, I'm Alexey Horwitz-Gazi.

4:47

And I'm Amanda Aranche. For the last

4:49

year and a half, the story of

4:51

FTX has focused largely on the crimes

4:53

and punishment of Sam Bankman Frees. But

4:56

in the background, the actual customers he

4:58

left behind have been caught in this

5:00

financial feeding frenzy over the remains of

5:02

the company. Today on the show,

5:05

an anatomy of the FTX bankruptcy. We

5:08

dive into that feeding frenzy to meet

5:10

the vulture investors who make markets out

5:12

of risky debt and

5:14

hear how customers like Begumshi navigate

5:16

the murky world of bankruptcy

5:19

claims trading. This

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app store sitting. Here

6:22

is the crux of what went

6:24

wrong at Stx: when Fps customers

6:26

thought they were buying save one

6:28

bitcoin. It turns out Stx wasn't

6:30

always buying one bitcoin and setting

6:32

it aside for them. Sometimes.

6:35

They were using that customer money

6:37

to make risky investments. And.

6:39

When people found out and customer

6:41

started rushing to withdraw their crypto

6:43

Stx did not have enough. He

6:46

was like a run on the

6:48

bank if the bank were unregulated

6:50

and without government protections and. So

6:52

in November of Twenty Twenty Two,

6:55

embattled Stx founder Sandbag Been Freed

6:57

signed the company over to a

6:59

new emergency. Ceo named John

7:02

raise. John Ray has

7:04

separate had several The says company

7:06

through bankruptcy before was famously Enron

7:09

and almost immediately after taking over

7:11

Stx filed for bankruptcy. So to

7:13

understand this new world Stx was

7:16

entering be called up. Adam Levitan,

7:18

a bankruptcy scholar. At Georgetown Law

7:20

when using separates the bankruptcy nerds from

7:22

the rest of us, I think we're

7:25

the folks who always bring an umbrella

7:27

to appear to that specific were always

7:29

forget about how things could go wrong

7:31

and what would happen if they go

7:33

wrong. Adam explains the modern bankruptcy system

7:35

in the U S goes back to

7:38

the late nineteen seventies. Before that, Most

7:40

of the time if a company reached

7:42

a point where it no longer had

7:44

enough money to pay it's debts, he

7:46

could either try to get acquired or

7:48

it would generally be liquidated. and sold

7:51

off for parts. But liquidation can

7:53

be a messy and destructive process

7:55

because all the parties were owed

7:57

money that creditors the or screen

7:59

going to grab whatever pieces of the

8:01

company they can and that can

8:03

destroy a lot of the value that

8:05

is left in that company. So

8:08

in Nineteen Seventy Eight, Congress decided

8:10

to redesign the way the courts

8:12

handle companies on the verge of

8:14

financial collapse since that of having

8:16

the destructive piecemeal liquidation vaccine go

8:18

on and grab race. Bankruptcy law

8:20

says all of the claims against

8:22

the data has to be brought

8:24

into a single forum. That's the

8:26

bankruptcy court isn't and the bankruptcy

8:28

court is going to have. Control.

8:31

Over all the debtors assets no matter where

8:33

they're located and we're gonna be able to

8:35

have an orderly process. Congress redesigned

8:37

the law and created a

8:39

new kind of bankruptcy. Chapter

8:41

Eleven. Bankruptcy. And Chapter Eleven

8:43

didn't just streamline the liquidation

8:45

process is actually made. It easier

8:47

for a company to be reorganized with

8:50

the help of the bankruptcy court. A

8:52

distress company could pause all of it's

8:54

creditors demands. It could come up with

8:56

a plan for restructuring their assets and

8:58

paying off their debts any fear and

9:00

orderly fashion, and it could potentially rise

9:03

from the ashes as a new, healthier

9:05

version of the company. Adam. Says

9:07

the system is treated a sort

9:09

of financial ecosystem that springs up

9:12

around a chapter eleven bankruptcy. Proceedings

9:14

into this a bit like nature

9:16

show about life on the on

9:18

the Serengeti us I so distressed

9:20

company is the carcass of the

9:22

will, the beast or some distance

9:24

and then there's an order and

9:27

the animal kingdom and which ever

9:29

and seeds are on the carcass.

9:31

Delicious. In other words, once the

9:33

distress company declared bankruptcy, there is

9:35

an order of priority for which

9:37

creditors that people who are owed

9:39

money will get paid back. first

9:41

am at the top you have the

9:43

lions those are your really like are

9:46

secured creditors their creditors who as collateral

9:48

and that's going to be your banks

9:50

visit the lines in the world secured

9:53

creditors have contracts with the distressed company

9:55

that include collateral meaning if the company

9:57

does not pay their debts they have

10:00

the right to take some property.

10:02

And then there are the unsecured

10:04

creditors. Unsecured creditors are owed

10:06

money from the company, but their contracts

10:08

do not give them collateral. So this

10:11

could be a vendor who supplies the

10:13

company with services or materials, or

10:15

it could be a group of employees who

10:18

never got paid. You can think of

10:20

those as maybe, I don't know, the

10:22

hyenas and the jackals, and they pick

10:24

what's left of the corpse after the

10:26

lions have eaten their fill. And

10:29

at the very end, I don't know, if

10:31

we want to push this metaphor too far.

10:33

Always push the metaphor. You know, if

10:35

there's still some value left, it drips

10:38

down to the old equity holders, and

10:40

maybe they're the dung beetles. The last

10:42

group to get anything, the beetles holding

10:44

the dung, I guess, are the equity

10:46

holders. People who are invested in the company

10:48

and who own stock. Chapter

10:50

11 gives all these different groups,

10:52

secured creditors, unsecured creditors, and stockholders

10:54

a place in line to get

10:56

paid back. And creditors have the

10:59

right to a claim, a kind

11:01

of IOU. And Adam explains

11:03

one big, important element of the modern

11:05

bankruptcy system is that these claims can

11:08

be bought and sold. And

11:10

so there is a fourth and

11:12

final group circling above the bankruptcy

11:14

serengere, a flock of opportunistic investors

11:17

who buy bankruptcy claims in order

11:19

to extract as much profit as

11:21

they can from the feeding frenzy.

11:24

These are kind of your distress

11:26

specialists. Those are your vultures, right?

11:28

They specialize in spotting opportunity and

11:30

distress. And one of the

11:33

big opportunities these vulture investors are looking

11:35

for are bankruptcies that may look hopeless

11:37

at the beginning, but actually still have

11:39

a lot of hidden value inside. In

11:41

those cases, the vulture investors can make

11:43

a bet. They can buy claims on

11:46

the cheap in the hopes that they'll

11:48

get paid out more by the end

11:50

of the bankruptcy. to

12:00

bankruptcy after massive fraud. Or Lehman

12:02

Brothers, the investment bank whose collapse

12:05

helped fuel the global financial crisis.

12:08

Some distressed investors who bought bankruptcy claims

12:10

for those two companies were able to

12:12

make at least two or three times

12:14

their money. When FTX

12:16

filed for bankruptcy, it was folded

12:19

into a new legal entity, the

12:21

FTX bankruptcy estate. And

12:23

a few things made it an enticing

12:26

wildebeest on the Serengeti of bankruptcy. First,

12:28

the number of secured creditors,

12:31

the lions, was relatively small.

12:33

And second, there was

12:35

an enormous group of

12:37

unsecured creditors because tens

12:39

of thousands of FTX

12:41

customers became FTX unsecured

12:43

creditors. People like Bhagam

12:45

Shikhanagundla, our Larry David

12:48

Loving amateur crypto investor.

12:50

That meant that all of these

12:52

former FTX customers were well positioned in

12:55

the bankruptcy food chain. In November

12:57

of 2022, most people were watching what

12:59

was happening at FTX as this flaming

13:01

hot financial wreck and hoping to stay

13:04

as far away from it as possible.

13:07

But that, that is exactly the

13:09

moment when some people's phones started

13:11

blowing up with frantic messages in the middle

13:13

of the night. Do you ever

13:15

identify as a vulture investor? Yeah, I

13:17

don't have a problem with it. I

13:19

kind of liken it to like economic

13:22

dumpster diving. Thomas Brazil runs a small

13:24

distressed debt brokerage firm. He makes his

13:26

living, in part, facilitating trades between bankruptcy

13:29

claim buyers and sellers. Usually takes a

13:31

commission. At first, Thomas was getting

13:33

offers to buy frozen FTX accounts for more

13:35

than 30 cents on the dollar. But

13:38

he wasn't interested because FTX's

13:40

financial situation was still too

13:42

unclear. I was like, no, it's

13:44

just too much. It's a total black box. I

13:46

can't do those kind of trades. Like putting money

13:48

into black boxes and shooting from the hip is

13:50

a great way to like get burned

13:53

very quickly. Thomas says that at the

13:55

very beginning, FTX hadn't disclosed a

13:57

lot of the usual information that he would

13:59

tip used to figure out how much these

14:01

claims might be worth. FDX declared

14:04

bankruptcy so quickly and

14:06

so chaotically that at first, the

14:08

company didn't even file all of

14:10

the usual paperwork. But for Thomas,

14:12

that extra layer of chaos could

14:14

mean more opportunity. Some people have

14:16

this mistaken impression that distressed investing

14:18

and especially distressed crypto investing is

14:21

the riskiest thing they've ever heard of. But

14:24

risk is really not a function of what you do.

14:26

It's the price you pay. And I

14:28

just sort of thought like, you know, for the right

14:30

price, we would stick our toes in the water on

14:32

this. But in order to figure out

14:35

the right price to bother putting his

14:37

toes into it, to start bidding for

14:39

FDX's bankruptcy claims, Thomas needs to

14:41

figure out a couple of things. First,

14:43

there's the question of what he's actually

14:45

buying. Some FDX customers were

14:47

arguing that they were owed the

14:49

specific cryptocurrency in their frozen accounts.

14:52

But Thomas knew that previous case law

14:54

suggested that the ultimate payout would likely

14:57

be based on however much the crypto

14:59

was worth in US dollars at

15:02

the moment FDX filed for bankruptcy,

15:04

which was relatively low. Next,

15:06

you need to figure out what assets

15:08

FDX might actually have to see if

15:10

it could be in a better financial

15:12

position than it appeared. So

15:14

he does some online sleuthing. Pokes

15:16

around on Twitter, looks for splashy

15:18

investments and acquisitions by scouring through

15:20

the PR announcements from FDX and

15:22

its sister company Alameda Research. And

15:24

he sees the FDX estate could

15:26

have access to hundreds of millions

15:28

of dollars worth of Robinhood shares

15:30

they might be able to sell

15:32

and a bunch of other investments.

15:35

And Thomas is able to see they do still

15:37

seem to have a lot of crypto. All

15:40

of those are things the FDX estate should be

15:42

able to get their hands on. And

15:44

so I was like, there's assets here that are gonna

15:47

come back to the estate. I'll

15:49

bet this is at least five or 10 cents. So I'd

15:51

be willing to buy these things for three and six cents.

15:54

In other words, Thomas is making an educated bet

15:56

that it'll be worth the risk to buy the

15:58

bankruptcy claims at just three. to six cents,

16:00

that he'll be able to get paid out

16:03

more later when the bankruptcy pays its creditors.

16:05

Thomas starts bidding. He closes

16:08

one deal, an $8 million claim for

16:10

three cents on the dollar, and then

16:12

two more multi-million dollar claims for six

16:14

cents on the dollar. And I actually did

16:16

have like a big distressed guy call me.

16:19

It was like, what? You're bidding on

16:21

FTX claims? You're, you're crazy. And I

16:24

was like, I mean, look, I think you could

16:26

get 10 cents on the dollar and I'm bidding

16:28

five. And he was like, that's too high. You're

16:30

bidding too high. And I was just like, I

16:33

don't know, but I know I'm the only person

16:36

even putting in a bid. So that's

16:38

usually a good place to start. Thomas was

16:40

offering just a few pennies on the dollar

16:43

for bankruptcy claims. Now, some

16:45

people heard Thomas's offer and were

16:47

upset. They called him a vulture,

16:50

but he says other people were eager to

16:52

make the deal so they could cash out

16:54

as quickly as possible. Around the same

16:56

time, other brokers were getting into

16:58

the mix, which brings us back

17:00

to our IT consultant, the Gumshie

17:03

Kanagundla and his frozen FTX account.

17:05

I was thinking I would have to wait like maybe

17:08

four years before I get even some of

17:10

it back. But Gumshie says

17:12

he quickly found a prospective buyer through

17:15

that online marketplace X claim. The buyer

17:17

offered him 11 cents on the dollar for

17:19

his $170,000 bankruptcy claim, which meant he'd

17:23

be giving up a potential $150,000, 89% of his full claim. Which

17:29

sounds like a terrible deal, right? Like the

17:31

total value of the claim was already low

17:33

because of the price of crypto at that

17:35

time. And on top of that, he was

17:37

losing like almost 90%. But

17:39

he also knew it would likely take many years before

17:42

any creditors got paid at all. And

17:44

he wanted the cash out immediately. The

17:46

cryptocurrency market was in freefall in the

17:48

wake of FTX, and he wanted any

17:50

money he could get in order to

17:52

reinvest. I mean, Bitcoin was

17:54

below 20 grand. Ethereum was below

17:56

2 grand. That's amazing. So that's when

17:59

I was... was like, I'm selling

18:01

this bankruptcy claim because I will

18:04

never see these prices again. I'd

18:06

be an idiot if I didn't take advantage

18:08

of this. So Begumshe sells

18:10

his FTX bankruptcy claim, and he

18:12

gets around $19,000 in total. Over

18:17

the next several months, Thomas Brazil, the

18:19

distressed asset broker, starts to broker more

18:21

and more deals. Some are with amateur

18:24

investors like Begumshe, but a lot are

18:26

institutional creditors. Whole crypto hedge funds are

18:28

forced to shut down and sell off

18:31

their claims. And by

18:33

early 2023, the price of claims

18:35

starts picking up. Because

18:37

the FTX bankruptcy estate, led by

18:39

emergency CEO John Ray, who had

18:41

presided over the Enron bankruptcy, they

18:44

start to announce that they've been able

18:46

to track down assets that can be

18:48

sold to payback creditors. And that's when a

18:50

lot of the distressed firms started getting interested. They're

18:52

like, well, we know John,

18:54

we bought claims in Enron and did

18:57

very well. Thomas is helping

18:59

to broker bigger and bigger deals.

19:01

By the spring of last year, a

19:04

number of big distressed asset firms had

19:06

started getting in on the action, eventually

19:08

buying up hundreds of millions of dollars

19:10

worth of FTX bankruptcy claims. That

19:12

helped drive the price of the claims from 20 cents to

19:15

30 cents to 45 cents. And

19:18

then there were the announcements from the

19:20

FTX estate. All of 2023 was nothing

19:22

but good news. Every time

19:25

you'd wake up, they're, you know, oh, my

19:27

gosh, we, you know, they have this asset

19:29

they didn't know about, or they settled this

19:31

for $100 million, or they recovered that.

19:33

And that's another $50 million. Like, holy

19:35

moly. Holy moly. Could

19:38

FTX bankruptcy claims actually

19:40

be worth way more than even Thomas

19:42

had imagined? After the

19:45

break, the crypto market starts creeping

19:47

back towards the moon. We tally

19:49

up everyone's bets and

19:51

what all of this actually means

19:53

for FTX customers like the Gamshee

19:56

Kanagoon Club. This

20:00

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you can go to npr.org/app. Okay,

21:25

so it has now been almost 18 months since

21:27

FTX filed for Chapter 11 bankruptcy.

21:30

Chapter 11, you will recall, offers

21:32

a way for companies to either restructure

21:34

and rise from the ashes, or to

21:36

liquidate. In the case of

21:39

FTX, the estate announced a few months

21:41

ago they could not find a suitable

21:43

buyer and so they would not be

21:45

restructuring and restarting the FTX exchange. As

21:47

for the prospects for how much all

21:49

the FTX creditors are likely to get

21:52

paid back, there have been

21:54

a few major changes since the bankruptcy process

21:56

began. First, the FTX estate managed

21:58

to track down a surprise... surprisingly large

22:00

amount of assets pretty quickly Second

22:03

several of the investments that FTX

22:06

and its sister company Alameda made

22:08

in part illegally using customer deposits

22:11

Some of those investments have actually hit

22:13

pretty hard for instance in

22:15

2021 FTX bought a 500 million

22:18

dollar stake in an AI startup

22:20

called Anthropic and as AI

22:22

is taken off over the last year

22:25

So too has that investment a few

22:27

weeks ago the FTX estate announced they'd

22:29

sell a portion of that stock for

22:33

884 million dollars and the last

22:35

big thing that sort of changed the

22:37

game for the FTX estate Is that

22:39

the crypto market has seen a remarkable

22:41

rebound? Bitcoin for example had

22:43

been trading at about $16,000

22:47

around the time FTX declared bankruptcy. It

22:49

has recently shot to a new record high

22:51

of over $70,000

22:54

for people who made big bets on

22:56

the corpse of FTX like distressed

22:58

investor Thomas Brazil This is

23:01

pretty exciting FTX

23:03

still holds some major crypto assets

23:05

that have seen these big gains

23:08

like Bitcoin ether and Solana

23:11

they own 40 million Solana. I'm looking

23:13

at it right now. So like this December

23:15

30th 2022

23:18

Solana was just under $10 and

23:20

now it's on a hundred 86 dollars Wow,

23:22

that helped a lot Finally by

23:25

January of this year lawyers for the

23:27

estate had announced that FTX had recovered

23:29

more than seven billion dollars in assets

23:31

So far and that at this point

23:34

they could cautiously predict that they'd be

23:36

able to pay back the company's creditors

23:38

in full Meaning if

23:40

things go according to plan Everyone

23:42

holding valid FTX bankruptcy claims will receive

23:45

at least 100 cents for every

23:47

dollar They

23:49

are owed so they may receive a

23:51

hundred percent of their claim in the end

23:54

all of it Which sounds pretty great

23:56

so great in fact that lawyers for

23:58

Sam Bankman Fried use the news to

24:00

argue that he should get a lower prison sentence.

24:03

The judge, however, did not buy this argument.

24:05

He ended up sentencing Sam Beckman-Fried to 25

24:08

years in prison for fraud, conspiracy,

24:10

and money laundering. And others

24:12

point out that FTX customers aren't really

24:14

being made whole. Yes, they may

24:16

end up getting their full claims, but

24:19

the value of those claims were calculated

24:21

when the crypto market was collapsing. So

24:24

some customers who sold their claims early,

24:26

they won't benefit at all. And some

24:28

customers went into personal bankruptcy during

24:31

this whole long process. As

24:33

for Thomas Brazile and the other distressed investors

24:35

and brokers who got in on the action,

24:38

the FTX bankruptcy is shaping up to

24:40

be a huge money-making bonanza for them,

24:43

one that could potentially see 10X returns or

24:45

more for people who bought in at the

24:47

bottom of the market. I think this

24:49

is the biggest thing that ever happened to the

24:51

whole Creton backwater area

24:54

of bankruptcy trade claims. Since

24:56

the invention of the whole idea of buying these,

24:59

it looks a lot like Lehman. Lehman,

25:01

as in that Wall Street investment bank, Lehman Brothers.

25:03

When Lehman went under, everybody thought, oh my God,

25:05

this is horrible. All this stuff is toxic waste.

25:07

Who's going to want to buy any of these

25:10

assets? It ended up for some

25:12

distressed buyers. The

25:14

recovery of Lehman was about $140 on the dollar, but it took 10

25:16

years. And

25:19

so we joked that FTX is like Lehman

25:21

on speed. Now it still

25:23

isn't clear exactly how much FTX creditors

25:25

will end up getting paid or exactly

25:28

when, but creditors could

25:30

potentially start seeing the first round of

25:32

payments around the end of this year.

25:35

We should also say in 2021, Thomas

25:37

Brazile was accused of, among other

25:39

things, misappropriating funds from a bankruptcy

25:41

estate he was managing. He's admitted

25:44

to making mistakes in the case,

25:46

but he denies, quote, actual or

25:48

potential criminal liability. As

25:51

for Bagamshikana Gundla, the FTX customer

25:53

who sold his $170,000 bankruptcy claim

25:55

for just 11 cents

25:57

on the dollar, when I asked her to pay for the debt, she

25:59

said, she's going Did he regret selling his

26:01

claim for so little and missing out on

26:03

what could be big payments? He

26:05

told me he actually hadn't been following any

26:07

of the developments in the bankruptcy case after

26:09

I saw my claim I don't even think

26:11

about it. You were like, I'm out of

26:14

here. I'm done. I'm done because

26:16

here's the thing Focusing

26:18

on stuff that's been done doesn't allow

26:20

you to move forward You let it

26:23

go and then you move on to

26:25

the next Did it

26:27

feel like an emotional thing too of like if you

26:29

could get rid of this claim that kind of tethered

26:31

you to this loss You could

26:33

actually kind of emotionally move on in a

26:35

way that was better. Yes 100%

26:39

correct. I didn't want to be stuck in purgatory

26:42

When I released the claim and I got the

26:44

money. Yeah, I felt like as if a big

26:46

weight has been lifted off my shoulders I don't

26:48

have to think about it anymore The

26:51

gum she says he used his claim money

26:53

to reinvest into crypto largely into Solana and

26:55

he's been able to grow his $19,000

26:58

into about $60,000

27:01

which isn't close to erasing his

27:03

FTX losses But he says

27:05

who knows by the time the FTX

27:07

estate finally pays its creditors Maybe

27:10

his new investments could be worth

27:12

even more than his original claim.

27:14

What would Larry David say about that outcome? That's

27:17

pretty pretty good I

27:21

like I like the way you said it

27:23

though Are

27:35

you part of an international financial fiasco tell us about it send us

27:37

an email at planet money at NPR Or

27:39

also at Planet Money on all the socials

27:41

media James Snead and Samuel Horst Kessler produced

27:43

this episode He

27:46

was edited by Jess Jang and fact check by Sierra Juarez It

27:50

was engineered by Sino Lofredo and Alex Goldmark

27:52

is Planet Money's executive producer special. Thanks to

27:54

Jonathan Lipsen Jake Sacker Waldock,

28:00

Dianne Dick, Barclay Walsh, and Andrew

28:02

Glantz. I'm Alexi Horowitz-Gazi. Amanda Rodschak

28:04

And I'm Amanda Rodschak. This is

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