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Hey there, it's Michael Lewis. Before we get to this episode, I want to let you know that you can listen to each episode of Judging Sam The Trial of Sam Bankman Freed ad free by becoming a Pushkin Plus subscriber, and with your subscription you'll also get exclusive access to ad free and early bingeable podcasts like Paul McCartney's new podcast, McCartney A Life and Lyrics, Malcolm Gladwell's revisionist history, The Happiness Lab from Doctor Lorie Santos, and tons of other
top shows from Pushkin. Sign up an Apple Podcasts or at Pushkin, dot fm, Slash Plus. Welcome to Judging Sam The Trial of Sam Bankman Freed. I'm Michael Lewis. Bankman Freed was worth tens of billions of dollars before FTX, his cryptocurrency exchange came apart at the seams, and now he's being tried for financial crimes. They could send him to prison for the rest of his life. Lydia jan Cott hosts today.
I'm Lydia jan Kott. Since I started reporting this story, I've noticed something that made it a little different than other criminal trials. There hasn't been that much of a focus on the victims. While a few of ftx's investors and customers have taken the stand, including a commodities trader in London and a hotel owner in Canada, their testimonies so far, at least, have been short and honestly not
that dramatic. I kept expecting to hear from a grandmother in Topeka who lost her house or something like that. There are millions of people out there who lost money when FTX crashed. They're waiting to see if they'll recover some or all of their funds through the bankruptcy proceedings. And because that's something we're going to be talking about, I want to note here again that my boyfriend's a lawyer at one of the firms working on those proceedings
today on the show. Not quite a grandma in Topeka, but a tech worker in Portland named Jake Thacker. Jake, thank you for joining.
Us, Yes, thank you very much for having me.
Just to start, could you explain why you decided to invest in crypto in the first place.
Yeah, that wasn't even really that interested in crypto, especially in the early days like twenty ten eleven, twelve when I was really started to gain some traction, really didn't
understand it and didn't have a ton of interest. Wasn't until around the end of twenty seventeen my friends and had joined some communities and started doing some fun things with crypto and the way in which they were trading was intriguing to me, and the methods that they were using, and I really just kind of started to dabble very very infotesimaly around that, right, small dollar amounts here and there, just for kind of the fun of it, to see if I could have some successes and what that would
look like. And it was more of a hobby thing, and like, oh, hey, I invested ten dollars and I made twenty and I think it was just a fun kind of contest between myself and some of my friends. But you know, as time went on, realized that these successes could be translated into larger amounts, and so again it kind of snowballed into that over the course of a few years.
So you got interested in crypto and why did you choose to use FTX specifically as a cryptocurrency exchange.
Yeah, the type of trading that my friends and others in some of these communities that we participated in were very transactionally heavy, right, so thousands of trades a day, a week and that type of thing, and those those fees, if you are using a platform like a coin base or finance, can be very expensive and be a huge part of your margins at the end of the day.
And again when you're looking to kind of squeeze in a tough market, ftx was definitely appetizing in the sense that they were offering, at least in those terms, substantially lower transaction fees. And so that's what really drew me there. I'd say it was probably the end of twenty twenty one beginning of twenty twenty two. Again I really hadn't
had a need for it to tell them. But then again, as I mentioned, the market's turning, and when that happened, you know, you look to kind of optimize anywhere possible. And it seemed, at least from kind of the sniff testing that we had put it through, that was very legitimate, right, and it had all this backing. It seemed to work famously.
It seemed to be a skyrocket in the marketplace, and you know, there weren't any substantial red flags that we noticed that would indicate, you know, there were could have been something like the events of almost over a year ago.
And how did it go at first? You're trading on FTX?
At first it went famously. I wouldn't say that I did, like a ton of crazy trading that I was doing on other platforms, but for what I needed it for and for the coins that I was utilizing the platform for, it was it worked just as they.
Said judging, Sam will be right back, welcome back.
Can you walk me through what happened in November twenty twenty two? How did you first become aware that there might be a problem at FTX?
I actually should have been paying more attention. There were some obviously issues that had been flagged in people raising alarms on some of something in my community chat things.
And how were you guys communicating? Were you onlike were you messaging? How was there a message board?
Yeah? Yeah, it's like a community message board, right, So there's a community called bitscap and that's where I had used that platform to trade as well as interact with a handful of people and learn from them and vice versa. And so I was regularly on that and then a few of us had exchanged emails and like WhatsApp accounts, and so there was emails, there was I mean, on the day of I was getting just bombarded with messages
and all various sources of communication. The initial fear was that they were starting to limit access to the platforms because there had been a hack. That was kind of the narrative that was going around before any official announcement of like the collapse and you know, aankruptcy, that kind
of thing. So their support channels were bombarded to the point where eventually started getting messages of like, look, we're overwhelmed and we'll get back to you when we can get back to you, kind of a thing.
Like messages from FTX And was this do you remember what the date was? Was this November? It must have been early November twenty twenty.
Two, right, Yeah, it was like the sixth, and the seventh, and the fourth, like you know, the five or six days leading up to the actual quote unquote collapse.
Were you scared at this point? Did it occur to you that you might not be able to get your money back?
I was naive in thinking that I would be safe. There wasn't any conversation around oh, this is going to be a complete collapse and there's no money like It was more of timing.
And how much money did you have on the platform at that point.
At the end of the day, after all the tabulation and this was realized, probably around the end of December, it ended up being all of the money that I had, which is around two hundred and six thousand dollars that I had in that wallet total.
Tell me about the moment when you realized that this pertained to you, that you couldn't get your money out of your wallet.
It was probably the night preceding the announcement of the official collapse. The system was completely inaccessible. I couldn't get online, I couldn't on the app. It was just like this kind of spinning FTX logo and you could not access anything. Thinking to myself, Okay, there's either been some sort of massive system overload or something really bad has happened. Right, We've never seen this before. What does this mean when
this happens with a company like this. Everyone was kind of in the dark about it, and then it's people because of timing around the world, because we were FTX us versus. FTX started to get some messages in that Hey, there's a new flashes of a new message just coming up saying all transactions are now on hold for definite
period of time. And then and then that next day, some of the initial news reports started to be posted, started to come up and say, like, there's no money, they're filing for bankruptcy, the platform has officially crashed, like it's officially down, not being monitored, that kind of thing, like it's it's lights out for FTX officially, which was hard for a lot of us to accept.
Yeah, and what impacts did it have on your life that you lost what two hundred thousand dollars?
You said, well, yeah, but you know, I had again leveraged that essentially to be able to invest more. So yes, I had to borrow a little bit, but I, you know, had essentially tripled my money over the course of the years. It was it was a little more than I had borrowed to invest, but that money needed to be paid back, and so I lost the ability to do that complete right. I couldn't get the funds. I didn't know how to
get the funds. I borrow money from Chase, I had borrow money from Discover Card in order to be able to have the money to invest. And so these were institutions that obviously needed to have this money paid back to them at some point in time, and so that's that's where that money was set aside for and so again I had lost the ability to essentially even make monthly payments on those as well as payback the amounts initially borrowed.
So this essentially bankrupted you.
Well yeah, and I thought, well, you know, I had a good job. I was working for a company called New at the time. But then in January of this year, New laid off almost half of the workforce, I'd say, and I was an unfortunate member of that. And then I was then it was like, okay, now I'm in real bad shape. And so you're absolutely right. I had to file bankruptcy and had to offload a lot of assets, just personal assets like TV, piano, these types of things to try and kind of keep things on par. And
so it's been. It has completely changed the trajectory of what I thought my life would be, at least right now and especially for probably the next five six years.
I'd say, do you think you're going to get your money back? Oh?
Boy, that is the question. I don't know. I've seen some press recently circulating that FTX is hoping to pay back something around ninety percent of creditors. It's just it's hard to It's hard to say because it just doesn't seem like that is the case. And if it is, you know, what is the timeline of something like that. And the longer it takes, the less money it seems that would be available due to whatever commitments that they have.
I like to think that there'd be some that we get back, but right now I'm a little more skeptical than I am positive in regards to seeing any of my funds returning to me anytime soon, if at all.
I'm just curious. Out of the things you had to sell after FTX crashed, what's the thing you missed the most?
Oh, definitely the piano. I played from a very very young age and almost went to college or university for it, and music therapy for me is definitely a very positive and motivating stress reliever for me, and so that was very, very very hard to part ways with and something I mean, I had even brought it to Korea with me when I was living there. That's how much I enjoy and
play piano. Was definitely one that I wish that I had not had to and seek to hopefully have another one at some point in the future.
Stick around judging. Sam will be right back, welcome back.
What's it been like for you knowing that there's this criminal case against samankman Fred that's happening right now.
I mean, at the end of the day, you know, people have asked me, do you want to see him go to prison? Do you think that he's guilty? And I think those are all very valid questions, And of course, if somebody commits a crime, you don't want to say they shouldn't should be held accountable, absolutely, But in this instance, it's hard for me to have a serious investment in it either way, because again, his guilt or his innocence doesn't make anyone whole. It doesn't really service anyone's actual
need when it comes to financial stability. I wish that the punishment was instead him having to have a little bit more of a direct impact with the people that were victimized of this, as opposed to just having to go away and hide somewhere and not really having to face the music outside of isolation. And you know, retrospective and that kind of thing, right, Like.
Rather than go to prison, he should have to like work really hard to make the money back and be able to give it back to you.
Yeah, come clean my house and do my dishes for me, and you know, walk my dog, and that I can think, right, like face the people that were actually affected by this the most and realize that not all of us are sons of affluent parents, that you work at prestigious universities, or that all of us had billions of dollars handed
to us because we could sell things really well. A lot of people were average citizens, and some of them had their entire life savings wrapped up in these things, right, just to see it completely vanish with no with no roadmap for how to move forward.
Sam bankmin Fried is likely to take the stand this week in your you know what would you what would you like him to say? What would you like to hear from him?
Well, I would want him to say, in all sincerity, is that you know he wants to help and that he wants to you know, he sees the damage that has done and it really wants to try and rectify that. But from what I have seen so far, it doesn't seem like that is going to be the scenario.
Has this experience changed how you feel about crypto?
Oh? Of course, yeah, definitely. It has changed my understanding and kind of reliance on it as something I feel could benefit me and my active participation have taken all of my money out. I haven't paid attention at all. I haven't even thought about it, and I don't know if I will ever jump back into it. There might be a period time which I will, but I don't really trust that process anymore. I'm very, very, very very reluctant to try and jump back in at any point in time.
In what ways has this whole thing changed you as a person?
Do you think I have a very different relationship to people that they get into hard time. I realized through all of this how difficult it is when something like this happens and you know you're not in a position to be able to bail yourself out or there is no help on the back end. It's kind of a never ending spiral. I was sued by my creditors, Chase Discoverer, and then another private firm that does like personal loans
for these types of things. Almost immediately after I could make a couple of the payments, and I'm thinking to myself, why, like the few thousand dollars that I borrowed at the end of the day, these are billion dollar organizations, why did they care? And you know, that kind of aggressive stance really puts people in this situation of making more mistakes,
of becoming overly anxious and fearing that system. It has changed my perspective on that and changed, frankly, the way that I have had to live in the way I've had to manage my life and the things that I have had to accept and be willing to give up, like my house, my possessions and the house well, I don't know. Yeah, that's that's one thing that's still being
determined as part of the bankruptcy. If it is deemed a asset that is valuable enough to potentially cover some of the losses that I owe, then yeah, it would be. It would be part of the bargaining ships in that. I don't know how many people you've been able to get a hold of, but it seems like a lot of customers in my position have been very closed lipped about wanted to share.
So, yeah, why do you think that is.
My theory on it is it's like my parents are a little worried about this season, Like, aren't you worried about exposure? And I said, what exposure? Exactly? Like if people think that I'm an dumb person for investing in crypto and then losing all my money, which I think is kind of already the narrative, right, Yes, there's been a lot of fluctuation in the typt of markets, but like, people haven't had their entire lives destroyed by crypto at
this volume because of personal indiscretion. This is a whole other type of thing, and I think people are afraid to publicly be seen as you know, the face of what people already assume.
Yeah, yeah, it totally makes sense. I mean, I guess it's scary and hard to like to having been a victim of something.
Right, you know, people always have a hard time being or associated with something that people might have a thought of, like well, if you hadn't done this, you would be in this situation, and more of that guilt and association than like I'm sorry for you. That's not fun. There should be action taken other places. It's normally a victim blaming game, and I think people just wanted to avoid that take.
Zachery, thank you so much for your time and I hope one day you get your piano back.
Thank you very much, thanks for having me and appreciate it, and good luck with everything else.
This episode of Judging Sam was hosted by Lydia Jean Kott. Our court reporter Catherine Gerardau and Nisha Venken produced this show. Sophie Crane is our editor. Our music was composed by Matthias Bossi and John Evans of stell Wagon Sephanette. Judging Sam is a production of Pushkin Industries. Got a question or comment for me, There's a website for that atr podcast dot com. That's atr podcast dot com. To find more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts,
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