Planet Money FTX and the Serengeti of bankruptcy
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Apr 19, 2024 Dive into the chaotic aftermath of the FTX collapse, where customers navigate the treacherous terrain of bankruptcy claims. Explore the rise and fall of the notorious crypto exchange through personal stories of loss and resilience. Discover the intriguing world of vulture investors capitalizing on risky debt. Learn about the transformation of the U.S. bankruptcy system, likened to a Serengeti of creditors. This journey reveals the complex emotional landscape faced by investors in a precarious financial ecosystem.
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Bagumshi's FTX Investment
- Bagumshi Kanagundla, trusting a Larry David FTX ad, invested over $200,000 in crypto.
- News of FTX's insolvency and potential fraud left him fearing a total loss.
FTX Accounts as Claims
- Frozen FTX accounts became bankruptcy claims, essentially IOUs from FTX.
- These IOUs represent the customer's right to be repaid if FTX recovers funds.
Chapter 11 Explained
- Chapter 11 bankruptcy aims to reorganize distressed companies, not just liquidate them.
- It allows restructuring and debt repayment plans under court supervision.