Speaker 1: Pushkin.
Speaker 2: Hey there, it's Michael Lewis. Before we get to this episode,
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Speaker 2: at Pushkin, dot fm, Slash Plus. Welcome to Judging Sam
Speaker 2: The Trial of Sam Bankman Freed. I'm Michael Lewis. Bankman
Speaker 2: Freed was worth tens of billions of dollars before FTX,
Speaker 2: his cryptocurrency exchange came apart at the seams, and now
Speaker 2: he's being tried for financial crimes. They could send him
Speaker 2: to prison for the rest of his life. Lydia jan
Speaker 2: Cott hosts today.
Speaker 3: I'm Lydia jan Kott. Since I started reporting this story,
Speaker 3: I've noticed something that made it a little different than
Speaker 3: other criminal trials. There hasn't been that much of a
Speaker 3: focus on the victims. While a few of ftx's investors
Speaker 3: and customers have taken the stand, including a commodities trader
Speaker 3: in London and a hotel owner in Canada, their testimonies
Speaker 3: so far, at least, have been short and honestly not
Speaker 3: that dramatic. I kept expecting to hear from a grandmother
Speaker 3: in Topeka who lost her house or something like that.
Speaker 3: There are millions of people out there who lost money
Speaker 3: when FTX crashed. They're waiting to see if they'll recover
Speaker 3: some or all of their funds through the bankruptcy proceedings.
Speaker 3: And because that's something we're going to be talking about,
Speaker 3: I want to note here again that my boyfriend's a
Speaker 3: lawyer at one of the firms working on those proceedings
Speaker 3: today on the show. Not quite a grandma in Topeka,
Speaker 3: but a tech worker in Portland named Jake Thacker. Jake,
Speaker 3: thank you for joining.
Speaker 1: Us, Yes, thank you very much for having me.
Speaker 3: Just to start, could you explain why you decided to
Speaker 3: invest in crypto in the first place.
Speaker 1: Yeah, that wasn't even really that interested in crypto, especially
Speaker 1: in the early days like twenty ten eleven, twelve when
Speaker 1: I was really started to gain some traction, really didn't
Speaker 1: understand it and didn't have a ton of interest. Wasn't
Speaker 1: until around the end of twenty seventeen my friends and
Speaker 1: had joined some communities and started doing some fun things
Speaker 1: with crypto and the way in which they were trading
Speaker 1: was intriguing to me, and the methods that they were using,
Speaker 1: and I really just kind of started to dabble very
Speaker 1: very infotesimaly around that, right, small dollar amounts here and there,
Speaker 1: just for kind of the fun of it, to see
Speaker 1: if I could have some successes and what that would
Speaker 1: look like. And it was more of a hobby thing,
Speaker 1: and like, oh, hey, I invested ten dollars and I
Speaker 1: made twenty and I think it was just a fun
Speaker 1: kind of contest between myself and some of my friends.
Speaker 1: But you know, as time went on, realized that these
Speaker 1: successes could be translated into larger amounts, and so again
Speaker 1: it kind of snowballed into that over the course of
Speaker 1: a few years.
Speaker 3: So you got interested in crypto and why did you
Speaker 3: choose to use FTX specifically as a cryptocurrency exchange.
Speaker 1: Yeah, the type of trading that my friends and others
Speaker 1: in some of these communities that we participated in were
Speaker 1: very transactionally heavy, right, so thousands of trades a day,
Speaker 1: a week and that type of thing, and those those fees,
Speaker 1: if you are using a platform like a coin base
Speaker 1: or finance, can be very expensive and be a huge
Speaker 1: part of your margins at the end of the day.
Speaker 1: And again when you're looking to kind of squeeze in
Speaker 1: a tough market, ftx was definitely appetizing in the sense
Speaker 1: that they were offering, at least in those terms, substantially
Speaker 1: lower transaction fees. And so that's what really drew me there.
Speaker 1: I'd say it was probably the end of twenty twenty
Speaker 1: one beginning of twenty twenty two. Again I really hadn't
Speaker 1: had a need for it to tell them. But then again,
Speaker 1: as I mentioned, the market's turning, and when that happened,
Speaker 1: you know, you look to kind of optimize anywhere possible.
Speaker 1: And it seemed, at least from kind of the sniff
Speaker 1: testing that we had put it through, that was very legitimate, right,
Speaker 1: and it had all this backing. It seemed to work famously.
Speaker 1: It seemed to be a skyrocket in the marketplace, and
Speaker 1: you know, there weren't any substantial red flags that we
Speaker 1: noticed that would indicate, you know, there were could have
Speaker 1: been something like the events of almost over a year ago.
Speaker 3: And how did it go at first? You're trading on FTX?
Speaker 1: At first it went famously. I wouldn't say that I did,
Speaker 1: like a ton of crazy trading that I was doing
Speaker 1: on other platforms, but for what I needed it for
Speaker 1: and for the coins that I was utilizing the platform for,
Speaker 1: it was it worked just as they.
Speaker 2: Said judging, Sam will be right back, welcome back.
Speaker 3: Can you walk me through what happened in November twenty
Speaker 3: twenty two? How did you first become aware that there
Speaker 3: might be a problem at FTX?
Speaker 1: I actually should have been paying more attention. There were
Speaker 1: some obviously issues that had been flagged in people raising
Speaker 1: alarms on some of something in my community chat things.
Speaker 3: And how were you guys communicating? Were you onlike were
Speaker 3: you messaging? How was there a message board?
Speaker 1: Yeah? Yeah, it's like a community message board, right, So
Speaker 1: there's a community called bitscap and that's where I had
Speaker 1: used that platform to trade as well as interact with
Speaker 1: a handful of people and learn from them and vice versa.
Speaker 1: And so I was regularly on that and then a
Speaker 1: few of us had exchanged emails and like WhatsApp accounts,
Speaker 1: and so there was emails, there was I mean, on
Speaker 1: the day of I was getting just bombarded with messages
Speaker 1: and all various sources of communication. The initial fear was
Speaker 1: that they were starting to limit access to the platforms
Speaker 1: because there had been a hack. That was kind of
Speaker 1: the narrative that was going around before any official announcement
Speaker 1: of like the collapse and you know, aankruptcy, that kind
Speaker 1: of thing. So their support channels were bombarded to the
Speaker 1: point where eventually started getting messages of like, look, we're
Speaker 1: overwhelmed and we'll get back to you when we can
Speaker 1: get back to you, kind of a thing.
Speaker 3: Like messages from FTX And was this do you remember
Speaker 3: what the date was? Was this November? It must have
Speaker 3: been early November twenty twenty.
Speaker 1: Two, right, Yeah, it was like the sixth, and the seventh,
Speaker 1: and the fourth, like you know, the five or six
Speaker 1: days leading up to the actual quote unquote collapse.
Speaker 3: Were you scared at this point? Did it occur to
Speaker 3: you that you might not be able to get your
Speaker 3: money back?
Speaker 1: I was naive in thinking that I would be safe.
Speaker 1: There wasn't any conversation around oh, this is going to
Speaker 1: be a complete collapse and there's no money like It
Speaker 1: was more of timing.
Speaker 3: And how much money did you have on the platform
Speaker 3: at that point.
Speaker 1: At the end of the day, after all the tabulation
Speaker 1: and this was realized, probably around the end of December,
Speaker 1: it ended up being all of the money that I had,
Speaker 1: which is around two hundred and six thousand dollars that
Speaker 1: I had in that wallet total.
Speaker 3: Tell me about the moment when you realized that this
Speaker 3: pertained to you, that you couldn't get your money out
Speaker 3: of your wallet.
Speaker 1: It was probably the night preceding the announcement of the
Speaker 1: official collapse. The system was completely inaccessible. I couldn't get online,
Speaker 1: I couldn't on the app. It was just like this
Speaker 1: kind of spinning FTX logo and you could not access anything.
Speaker 1: Thinking to myself, Okay, there's either been some sort of
Speaker 1: massive system overload or something really bad has happened. Right,
Speaker 1: We've never seen this before. What does this mean when
Speaker 1: this happens with a company like this. Everyone was kind
Speaker 1: of in the dark about it, and then it's people
Speaker 1: because of timing around the world, because we were FTX
Speaker 1: us versus. FTX started to get some messages in that Hey,
Speaker 1: there's a new flashes of a new message just coming
Speaker 1: up saying all transactions are now on hold for definite
Speaker 1: period of time. And then and then that next day,
Speaker 1: some of the initial news reports started to be posted,
Speaker 1: started to come up and say, like, there's no money,
Speaker 1: they're filing for bankruptcy, the platform has officially crashed, like
Speaker 1: it's officially down, not being monitored, that kind of thing,
Speaker 1: like it's it's lights out for FTX officially, which was
Speaker 1: hard for a lot of us to accept.
Speaker 3: Yeah, and what impacts did it have on your life
Speaker 3: that you lost what two hundred thousand dollars?
Speaker 1: You said, well, yeah, but you know, I had again
Speaker 1: leveraged that essentially to be able to invest more. So yes,
Speaker 1: I had to borrow a little bit, but I, you know,
Speaker 1: had essentially tripled my money over the course of the years.
Speaker 1: It was it was a little more than I had
Speaker 1: borrowed to invest, but that money needed to be paid back,
Speaker 1: and so I lost the ability to do that complete right.
Speaker 1: I couldn't get the funds. I didn't know how to
Speaker 1: get the funds. I borrow money from Chase, I had
Speaker 1: borrow money from Discover Card in order to be able
Speaker 1: to have the money to invest. And so these were
Speaker 1: institutions that obviously needed to have this money paid back
Speaker 1: to them at some point in time, and so that's
Speaker 1: that's where that money was set aside for and so
Speaker 1: again I had lost the ability to essentially even make
Speaker 1: monthly payments on those as well as payback the amounts
Speaker 1: initially borrowed.
Speaker 3: So this essentially bankrupted you.
Speaker 1: Well yeah, and I thought, well, you know, I had
Speaker 1: a good job. I was working for a company called
Speaker 1: New at the time. But then in January of this year,
Speaker 1: New laid off almost half of the workforce, I'd say,
Speaker 1: and I was an unfortunate member of that. And then
Speaker 1: I was then it was like, okay, now I'm in
Speaker 1: real bad shape. And so you're absolutely right. I had
Speaker 1: to file bankruptcy and had to offload a lot of assets,
Speaker 1: just personal assets like TV, piano, these types of things
Speaker 1: to try and kind of keep things on par. And
Speaker 1: so it's been. It has completely changed the trajectory of
Speaker 1: what I thought my life would be, at least right
Speaker 1: now and especially for probably the next five six years.
Speaker 3: I'd say, do you think you're going to get your
Speaker 3: money back? Oh?
Speaker 1: Boy, that is the question. I don't know. I've seen
Speaker 1: some press recently circulating that FTX is hoping to pay
Speaker 1: back something around ninety percent of creditors. It's just it's
Speaker 1: hard to It's hard to say because it just doesn't
Speaker 1: seem like that is the case. And if it is,
Speaker 1: you know, what is the timeline of something like that.
Speaker 1: And the longer it takes, the less money it seems
Speaker 1: that would be available due to whatever commitments that they have.
Speaker 1: I like to think that there'd be some that we
Speaker 1: get back, but right now I'm a little more skeptical
Speaker 1: than I am positive in regards to seeing any of
Speaker 1: my funds returning to me anytime soon, if at all.
Speaker 3: I'm just curious. Out of the things you had to
Speaker 3: sell after FTX crashed, what's the thing you missed the most?
Speaker 1: Oh, definitely the piano. I played from a very very
Speaker 1: young age and almost went to college or university for it,
Speaker 1: and music therapy for me is definitely a very positive
Speaker 1: and motivating stress reliever for me, and so that was very,
Speaker 1: very very hard to part ways with and something I mean,
Speaker 1: I had even brought it to Korea with me when
Speaker 1: I was living there. That's how much I enjoy and
Speaker 1: play piano. Was definitely one that I wish that I
Speaker 1: had not had to and seek to hopefully have another
Speaker 1: one at some point in the future.
Speaker 2: Stick around judging. Sam will be right back, welcome back.
Speaker 3: What's it been like for you knowing that there's this
Speaker 3: criminal case against samankman Fred that's happening right now.
Speaker 1: I mean, at the end of the day, you know,
Speaker 1: people have asked me, do you want to see him
Speaker 1: go to prison? Do you think that he's guilty? And
Speaker 1: I think those are all very valid questions, And of course,
Speaker 1: if somebody commits a crime, you don't want to say
Speaker 1: they shouldn't should be held accountable, absolutely, But in this instance,
Speaker 1: it's hard for me to have a serious investment in
Speaker 1: it either way, because again, his guilt or his innocence
Speaker 1: doesn't make anyone whole. It doesn't really service anyone's actual
Speaker 1: need when it comes to financial stability. I wish that
Speaker 1: the punishment was instead him having to have a little
Speaker 1: bit more of a direct impact with the people that
Speaker 1: were victimized of this, as opposed to just having to
Speaker 1: go away and hide somewhere and not really having to
Speaker 1: face the music outside of isolation. And you know, retrospective
Speaker 1: and that kind of thing, right, Like.
Speaker 3: Rather than go to prison, he should have to like
Speaker 3: work really hard to make the money back and be
Speaker 3: able to give it back to you.
Speaker 1: Yeah, come clean my house and do my dishes for me,
Speaker 1: and you know, walk my dog, and that I can think, right,
Speaker 1: like face the people that were actually affected by this
Speaker 1: the most and realize that not all of us are
Speaker 1: sons of affluent parents, that you work at prestigious universities,
Speaker 1: or that all of us had billions of dollars handed
Speaker 1: to us because we could sell things really well. A
Speaker 1: lot of people were average citizens, and some of them
Speaker 1: had their entire life savings wrapped up in these things, right,
Speaker 1: just to see it completely vanish with no with no
Speaker 1: roadmap for how to move forward.
Speaker 3: Sam bankmin Fried is likely to take the stand this
Speaker 3: week in your you know what would you what would
Speaker 3: you like him to say? What would you like to
Speaker 3: hear from him?
Speaker 1: Well, I would want him to say, in all sincerity,
Speaker 1: is that you know he wants to help and that
Speaker 1: he wants to you know, he sees the damage that
Speaker 1: has done and it really wants to try and rectify that.
Speaker 1: But from what I have seen so far, it doesn't
Speaker 1: seem like that is going to be the scenario.
Speaker 3: Has this experience changed how you feel about crypto?
Speaker 1: Oh? Of course, yeah, definitely. It has changed my understanding
Speaker 1: and kind of reliance on it as something I feel
Speaker 1: could benefit me and my active participation have taken all
Speaker 1: of my money out. I haven't paid attention at all.
Speaker 1: I haven't even thought about it, and I don't know
Speaker 1: if I will ever jump back into it. There might
Speaker 1: be a period time which I will, but I don't
Speaker 1: really trust that process anymore. I'm very, very, very very
Speaker 1: reluctant to try and jump back in at any point
Speaker 1: in time.
Speaker 3: In what ways has this whole thing changed you as
Speaker 3: a person?
Speaker 1: Do you think I have a very different relationship to
Speaker 1: people that they get into hard time. I realized through
Speaker 1: all of this how difficult it is when something like
Speaker 1: this happens and you know you're not in a position
Speaker 1: to be able to bail yourself out or there is
Speaker 1: no help on the back end. It's kind of a
Speaker 1: never ending spiral. I was sued by my creditors, Chase Discoverer,
Speaker 1: and then another private firm that does like personal loans
Speaker 1: for these types of things. Almost immediately after I could
Speaker 1: make a couple of the payments, and I'm thinking to myself, why,
Speaker 1: like the few thousand dollars that I borrowed at the
Speaker 1: end of the day, these are billion dollar organizations, why
Speaker 1: did they care? And you know, that kind of aggressive
Speaker 1: stance really puts people in this situation of making more mistakes,
Speaker 1: of becoming overly anxious and fearing that system. It has
Speaker 1: changed my perspective on that and changed, frankly, the way
Speaker 1: that I have had to live in the way I've
Speaker 1: had to manage my life and the things that I
Speaker 1: have had to accept and be willing to give up,
Speaker 1: like my house, my possessions and the house well, I
Speaker 1: don't know. Yeah, that's that's one thing that's still being
Speaker 1: determined as part of the bankruptcy. If it is deemed
Speaker 1: a asset that is valuable enough to potentially cover some
Speaker 1: of the losses that I owe, then yeah, it would be.
Speaker 1: It would be part of the bargaining ships in that.
Speaker 1: I don't know how many people you've been able to
Speaker 1: get a hold of, but it seems like a lot
Speaker 1: of customers in my position have been very closed lipped
Speaker 1: about wanted to share.
Speaker 3: So, yeah, why do you think that is.
Speaker 1: My theory on it is it's like my parents are
Speaker 1: a little worried about this season, Like, aren't you worried
Speaker 1: about exposure? And I said, what exposure? Exactly? Like if
Speaker 1: people think that I'm an dumb person for investing in
Speaker 1: crypto and then losing all my money, which I think
Speaker 1: is kind of already the narrative, right, Yes, there's been
Speaker 1: a lot of fluctuation in the typt of markets, but like,
Speaker 1: people haven't had their entire lives destroyed by crypto at
Speaker 1: this volume because of personal indiscretion. This is a whole
Speaker 1: other type of thing, and I think people are afraid
Speaker 1: to publicly be seen as you know, the face of
Speaker 1: what people already assume.
Speaker 3: Yeah, yeah, it totally makes sense. I mean, I guess
Speaker 3: it's scary and hard to like to having been a
Speaker 3: victim of something.
Speaker 1: Right, you know, people always have a hard time being
Speaker 1: or associated with something that people might have a thought of,
Speaker 1: like well, if you hadn't done this, you would be
Speaker 1: in this situation, and more of that guilt and association
Speaker 1: than like I'm sorry for you. That's not fun. There
Speaker 1: should be action taken other places. It's normally a victim
Speaker 1: blaming game, and I think people just wanted to avoid
Speaker 1: that take.
Speaker 3: Zachery, thank you so much for your time and I
Speaker 3: hope one day you get your piano back.
Speaker 1: Thank you very much, thanks for having me and appreciate it,
Speaker 1: and good luck with everything else.
Speaker 2: This episode of Judging Sam was hosted by Lydia Jean Kott.
Speaker 2: Our court reporter Catherine Gerardau and Nisha Venken produced this show.
Speaker 2: Sophie Crane is our editor. Our music was composed by
Speaker 2: Matthias Bossi and John Evans of stell Wagon Sephanette. Judging
Speaker 2: Sam is a production of Pushkin Industries. Got a question
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