Money Rehab with Nicole Lapin - SBF's Takedown — and FTX's Comeback?

Episode Date: November 8, 2023

One of the highest-profile trials of the year, the trial of FTX founder Sam Bankman Fried, has come to an exciting and dramatic conclusion. To help Nicole break down the details of the trial, Nicole calls up blockchain and cryptocurrency expert Ash Bennington. They dig into the fate of SBF, crypto— and, not kidding, the potential comeback of FTX. Find Ash's book wherever you get your favorite books (like here!). Want to start investing, but don't know where to begin? Go to moneyassistant.com and meet Magnifi, your AI money assistant, designed to help you make a plan for your financial goals. Want one-on-one money coaching from Nicole? Book a meeting with her here: intro.co/moneynewsnetwork 

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I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no

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apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Well it happened. One of the highest profile trials of the year, the trial of FTX founder Sam Bigman Freed has come to an exciting and dramatic conclusion. To help me break down the details of the trial is blockchain and cryptocurrency expert Ash Bennington. Ash is such an expert that he wrote the book on SBF, literally. His book,

Crypto Crackup, is out now. I have linked it in the show notes. Now, let's dig into the fate of SBF and, not kidding, the potential comeback of FTX. Ash Bennington, welcome to Money Rehab. Thanks for having me. Holy shit, FTX. It has been, what, a year almost to the day since Sam Bankman Freed's crypto exchange FTX declared bankruptcy and the SEC started their whole investigation. What a crazy ass ride. I mean, we've covered some crazy things in the business world, but this one's a whole different level. Ben Felix Obviously, this has been a pretty ugly moment for the crypto space. But I think people who are interested in crypto, people who are passionate about crypto would probably say,

look, Sam Bankman Freed represented the antithesis of all the values of this space that people hold dear. This was about centralization. This was about a company and a person being in control of huge amounts of customer funds that we now know that he lent out essentially to a hedge fund that he also owned. I mean, it's just ugly top to bottom, Nicole. But for me, I think the bottom line is this looks like a traditional fraud, something that you might have seen in the banking space, something that you might have seen in terms of a hedge fund failure. There's nothing really about the underlying crime that was inherently cryptocurrency native. So let's refresh our memory for a second. So last

week, SBF's trial reached the conclusion after all sorts of drama. Before we dig into that, can you just help us remember all the mechanics of what the FTX fraud was? Adam Draper Yeah, there were a lot of moving parts, but essentially FTX is a so-called crypto exchange. An exchange in the crypto space means something a little bit different than it does when you're talking about stocks, for example. And essentially, it was a company that was taking in customer deposits, taking in people's money. And it turns out that Sam Bankman-Fried and his executive team were lending that money to a sister company called Alameda Research in a way that

violated the terms of the agreement that they had with their customers. And then Alameda Research was making speculative bets about the direction of cryptocurrency. And they were spectacularly bad at trading, Nicole. And they lost massive, massive amounts of money on some of their crypto positions. They had venture investments. It was just like a whole toxic soup of everything you're not supposed to do with customer money. Man, that's what happens when you work with your girlfriend or... I guess that's part of the story. So Alameda Research was run by a woman named Caroline Ellison, who Sam Bankman-Fried had historically dated. And so there's this weird kind of melange of personal, emotional entanglements

in addition to the fact that they were essentially running these companies together. She pleaded guilty to charges federal prosecutors had levied against her and then ultimately testified against her ex-boyfriend in this trial, Sam Bankman-Fried, which is part of the drama of the case. So let's talk about the trial. In that testimony, I'd love to hear more about it and double click on that. But if we zoom back out, what are the charges that were levied against SBF specifically? Well, it was a lot of different charges. It was bank fraud. It was wire fraud. It was fraud against investors. It was fraud against lenders. It was fraud against customers. It was essentially fraud against everyone that FTX touched. And an important part of the case was that SBF had to be proven to have directed the executives

who had pleaded guilty beneath them. So in addition to Sam Bankman-Fried, four other executives, Caroline Ellison being one of them, pleaded guilty to these charges. Three of them agreed to cooperate with federal prosecutors and testify against Sam Bankman-Fried. So what you saw in this case was these three executives saying, not only did we commit fraud, not only did we commit securities fraud, wire fraud, this whole spectrum of different frauds, but Sam Bankman-Fried, the CEO of FTX and majority owner of Alameda, directed us to commit those crimes. So it was all the frauds. Literally, can you think of a different kind of fraud that wasn't charged here?

They were very comprehensive. All right. So some of the pivotal moments of the trial, what were some of your favorites? What were the most dramatic moments? Well, one of the challenges about covering this case was there were no cameras in the courtroom. So we were relying on accounts that had been written. But I would say far and away, the most spectacular moment was Caroline Ellison testifying against her ex-boyfriend and boss, since he owned 90% of Alameda Research, saying, hey, this guy directed me to commit very serious securities fraud, bank fraud, wire fraud.

Essentially, he directed me to steal customer funds, if you want to use that term quite bluntly, and gamble them with FTX funds, gamble them with Alameda's trading scheme. So just this weird dynamic of having your ex-girlfriend be on the opposite side of this conversation directed to commit fraud is a surreal moment. I mean, I would love to testify against some of my ex-boyfriends. That seems like the ultimate victory. All right, I'll leave it there. So Sam himself testified, right?

What were some of the big takeaways from his testimony? And damn, I wish that cameras were allowed in the courtroom. Yeah, it's just the trial was here in New York and the federal system. But Sam essentially his defense looked something like the dog ate my homework, right? He basically said, look, I was grossly incompetent as a CEO. I had absolutely no idea what I was doing. These weren't crimes. This was just ridiculous incompetence on my behalf. The real world is complicated. And I failed miserably at my job. Obviously, 12 jurors did not buy that argument. It took them less than four hours to return guilty verdicts on all seven charges against him.

All the counts, he was found guilty. He'll be sentenced in March, right? What sentence can we expect for SBF? Well, he faces up to 110 years in prison. Most people don't think he's going to get that much. There is also this other weird wrinkle that there's a separate trial that's scheduled to begin in March. It's unclear whether the government is going to continue to pursue those charges since they got seven convictions here, but we'll have to see. I was on a Twitter spaces a couple of days ago with Martin Shkreli. Remember him, the pharma bro who was convicted of running a company and committing fraud? Stacey Schauffler Also, do you remember Twitter? Dr. Justin Marchegiani Well, X, I guess now. But he was

saying that in prison, he spent a couple of years in prison for the fraud that he committed in the pharmaceutical industry. And he said in prison, they talk about prison sentences in two different terms, their baseball scores and their football scores. So a football score would be like 45 to 21. That's a long sentence. A baseball score would be like 45 to 21. That's a long sentence. A baseball score would be like three to five. Sam's getting football numbers on this. That's the consensus view of most of the lawyers that we talked to, former federal prosecutors, who I interviewed, by the way, for my book, which I co-wrote with Arthur Sinsky and Elizabeth Bachman talking about this. It's called Crypto Crackup, where we detail the actual mechanics of how Sam and the other folks at

FTX and Alameda committed this fraud. And we can now say that it's a fraud. It's no longer alleged. We have, as I said, we have these four people who pleaded guilty to these charges and Sam has now been convicted. What do you think is realistic though? But the consensus opinion is that Sam is going to be doing a lot of time for these crimes. But it's not like a camp cupcake situation. It is probably not a camp cupcake situation. This is a reference to where Martha Stewart was committed during her time in the federal system. These are looking at some big numbers here, at least according to people that we've spoken to. Again, there's always the potential for surprise, but he is facing 110 years in prison, which suggests a relatively long sentence. I just

learned this myself, actually, which is that the level of prison that you are committed to is not about sort of the type of crime you've committed. It's largely about the number of years you've faced. Wait, say that again? Say that last part again? It's the number of years you've faced. So if you're facing a 50 to 100 year sentence, you might have to do it in a federal penitentiary, a place that is the opposite of Camp Cupcake. Ah, I see. OK, so it's more intense the longer your sentence is. Yeah of Camp Cupcake. I see. Okay. So it's more intense the longer your sentence is. Yeah, that's right. The general idea is you don't want people in prison who are

facing like six months with people who are facing a hundred years because the guy who's facing a hundred years has nothing to lose. They try and segregate those populations. That makes sense. How has this affected the crypto market? Crypt Mosserop, The Crypto Market has been rallying pretty greatly here the last couple of weeks, largely on the expectation that we're going to get a spot Bitcoin ETF approved by SEC. But I think also there's a sense in the space that Sam Bankman-Fried, obviously, as you might imagine, was not a terribly popular guy. And there is a sense that a bad actor and a bad company has been pushed out of the system, that the system worked. I don't think anyone can really disagree that he was a bad actor. And of course,

he is now charged. But what do you believe? You've been covering this for a long time. Do you think he knew what he was doing? Or do you buy his dog ate my homework type defense? Well, look, he had a trial. He had the opportunity to put on a defense and a jury of his peers convicted him in less than four hours. I think it's pretty clear that he committed a series of crimes. He's now sort of the Bernie Madoff of the crypto space. And quite clearly, this has been a bad moment for crypto.

But look, one of the things that I get yelled at all the time about on Twitter is Sam is a very unusual guy. He clearly does not seem like he's able to have a conversation the way that you and I are. I've interviewed him, I've met him in person. He's a seriously weird dude. And the question I think that people often raise is like, well, he seems atypical in some ways, and is that going to be a mitigating factor in his sentencing? Maybe, maybe not. But the reality is the guy ran a company. He directed his executives, as they've testified in court, to commit a series of crimes.

He's been convicted. And I think the verdict speaks for itself. How weird are we talking? What do you mean? Well, look, I'm not a doctor, but certainly people have suggested that he does not seem to relate to other human beings, maybe the way that you and I do. It's really interesting. And I think one of the things that came out in the trial and something that we reported

on in our book is the idea that he seemed to use his sort of oddness to his advantage. At one point, we have a conversation in the book, Crypto Crackup, where essentially one of his executives is like, dude, you're wearing a pair of shorts and a ratty old t-shirt. Can you just put on a suit? And Sam essentially says, no, looking this way creates value for the company. And what he's saying is like, hey, my sort of weird, frizzy haired, eccentric genius look that I've been putting forward has helped because people think, oh my God, he must be too smart to put on a suit and tie. And I feel like to a certain extent, that's something that we now

can see through. It seems like it was part of his deception. It was part of his ability to manipulate people. Yeah, it was part of his shtick. Do you think where there's smoke, there's fire? Do you think this is the beginning of a lot more charges, trials in the crypto world? Is this a life sentence, in other words, for crypto? I don't think so. I think crypto is something that is on a decades-long trajectory. I mean, look, it's 15 years we just celebrated on Halloween since the Bitcoin white paper came out. There's this sort of George Soros axiom where if there's something that should have been killed numerous times and nothing seems to kill it, it's probably likely that it's going to stick around for a while. I mean, look, crypto over

the last 15 years or so, or 14, however long it's been up and running, has had its ups and downs, certainly. But the idea of what crypto is fundamentally about, I would say, has nothing to do with what FTX was doing. It's this kind of weird thing, Nicole, where the people who are passionate about cryptocurrency see it as something that's truly a kind of a watershed moment in finance, that we're going to see this transition from the financial services ecosystem that we see today, which is run by banks and large financial institutions to a more decentralized internet based type of money. And the reason that you get these places like ATX that pop up is to figure out how that transition takes place. And it's not an easy one. It's probably one that takes decades,

but no, I don't think this is a death sentence for crypto. I mean, you can see the price action right now. It's obviously rallied pretty substantially since the conviction, again, probably on ETF rumors rather than on Sam's outcome in the trial. But it certainly seems like this is something that's not going to kill crypto. But when you say rally, you mean Bitcoin, right? In a past life of yours, you worked with our friend Nareel Ardini, who's been on the show, and he calls the rest of them shit coins. So when you talk about it rallying, are you really talking about Bitcoin, Ethereum, maybe Ripple? Bitcoin, Ethereum, Ripple, Solana is up, I think, 300% year to date. There's a lot of broad-based positive sentiment in the space right now. But look, this is the way crypto works. It's just incredibly volatile. It goes up 100%. It drops down 85%. This is the nature of the space.

If you're invested in crypto or speculating in crypto, you have to expect that it's going to be a wild ride. That's what we've seen historically. That's probably what we're going to see going forward. Yeah. I talk about in my last book, a crypto king, I said, who shall remain nameless, but you know who it is. And when I was dating him, he had security guards around because if somebody kidnapped him, he was going to have to give the passwords or something. And then that whole currency would get fucked. And that really scared me. One man and his passwords could cause havoc in all of the crypto markets. I mean, this was a million and a half years ago, but that's still

possible. That's scary. Yeah, it is scary. And it is still a thing that hasn't been solved yet. Look, again, I think this is a decades long transition. I think there are going to be ups and downs in the price. But look, the idea of being able to have internet native money, money that trades essentially as a network itself. It's just an incredibly powerful idea. And what you're talking about, this idea that when you have the private keys, you essentially have access to the crypto. This is very different than what we see today, right? If someone goes and gets your bank account, they get your bank account information, you can change it. You can go to the bank and say, hey, listen, my credit card has been stolen. I want to cancel this

account. You can call them on the phone. You can do it on the internet. You can do it on your smartphone in 30 seconds. That is certainly a set of advantages that the existing system has. People who are really passionate about this talk about self-sovereignty. They talk about individuals being essentially able to custody their own money without financial institutions standing between them and their assets. That's the dream. Now, what you're talking about here with the crypto king that you dated, the idea that if someone got him, they could get the passwords, these are problems that they're working on technical solutions to. One of them is something called account abstraction, which, for example, would put

limits on how much money could be transferred from one account to another, from one crypto wallet to another, and would limit or minimize some of the risk that you would have in an individual having all of their keys if that was what they wanted to do. So people who are passionate about this space would say it's all about individuals being able to take charge of their own financial lives, which is I know something you talk about on Money Rehab pretty regularly. And that's the dream. That's the passion. I suspect that it's going to be a rocky ride to get there. And I think it's going to take decades. There's still security problems that need to be solved in this space. There are certainly legal problems that need to be solved in this space, securities laws, issues that need to be worked out. I mean, there's a whole lot of barriers

to this. Make no mistake about it. There are a lot of challenges in crypto, but simultaneously, there are also a lot of opportunities. These two things are just constantly colliding. And that's what makes the crypto space so fun to watch. Yes, it's like a dialectic. Like you can have great opportunities and it can be messed up. Both can coexist at the same time. Yeah, but if like somebody kidnapped J-PAL, which I don't advocate at all. I don't advocate crime or kidnapping, just to be clear. The whole financial

system would not crumble in the same way as if somebody kidnapped or put a gun to the head of some crypto CEO. That's frightening. True or false? True. Certainly true. But again, I think these are things that the technology will minimize as we go forward. I think people are aware of these weaknesses, are aware of these vulnerabilities. You don't want to have a system where, for example, one individual controls the fate of the entire ecosystem. That's what decentralization is about. But that's an evolution to get there.

That's not something where you can just snap your fingers and overnight arrive at this kind of future system where there is more stability. It takes time to evolve. I mean, if you think about it, it's like the internet, right? I know you're young enough that you don't remember the beginning of the internet, but it was just like an incredibly clunky, difficult, unpleasant experience. You could get information across it, but it wasn't where we are today where everyone can just pick up their smartphones and instantly send files and send money. It took a long time to evolve to something that was useful, something that like my mother, for example, feels comfortable interacting with. My mom does not have a crypto

wallet, right? It's not something that she's interested in doing right now. But my mom also wasn't on the internet in the early days. And it takes time. It's an evolution. And eventually it plays out. And as the technology advances, as it becomes simpler, as it becomes more user-friendly, more people come into the system. I don't know how old you think I am, but of course I remember Dial-Up. You remember Dial-Up? You had an AOL account? Yeah, of course. I was Tiny Dancer on AOL Instant Messenger. I did not know that. Anyways, you also text me a bunch about the developments with the SEC and some of the regulations that are in place. What's the latest there?

So securities laws in the United States are roughly 90 years old. This is something that literally dates back to the Roosevelt administration. They were further elaborated by a series of court decisions in the 1940s and 1950s that don't interest anyone other than securities lawyers. But the bottom line is this, Nicole, this is a system, a regulatory framework that's literally been in place for 75 plus years. And you have these new technologies that just don't fit into the categories that currently exist in federal law. And the challenge is human nature has not changed. People are greedy. People defraud other people, as we saw with the FTX Alameda case and Sam Bankman Freed. But also, the properties of these technologies are very different.

And unfortunately, I think one thing that everyone agrees on in 2023, whether they're Democrats or Republicans, is that Congress is tremendously dysfunctional. And in order to really update the securities law infrastructure to reflect the underlying reality of how cryptocurrency works, you need to get legislation through Congress. I think that's the consensus view of everyone in the space so that you can find ways of protecting people from bad actors like Sam Bankman-Fried. You can find a way to regulate this technology in a way that is pro-growth, that helps the United States maintain its global competitiveness.

People who are in the space don't talk about it as cryptocurrency. Often they use the phrase Web 2.0, Web 3.0, this idea that Web 3.0 is something that we've been evolving toward. Folks out in Silicon Valley did very well. The United States did very well with Web 1.0, did very well with Web 2.0. And the idea here is that for the United States to be competitive, you can't have all this development moving to Europe or Asia. You need the laws to be updated so that Web 3.0 development can happen here in the United States to be competitive, you can't have all this development moving to Europe or Asia. You need the laws to be updated so that Web 3.0 development can happen here in the United States. This technology that people are passionate about, cryptocurrency, Web 3.0, can evolve here in the US in a way that benefits Americans as the last two waves of the internet have benefited us. And in order to get there, you're going to need legislation. That's a challenge right now.

Obviously, we're coming up to an election year. It's a rather politically intense time. You have Democrats and Republicans who disagree about everything. It's probably not surprising that they disagree about cryptocurrency and Web3. Hold on to your wallets. Money Rehab will be right back. I love hosting on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your

home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future

and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener

by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bank Corp Bank N.A. or Stride Bank N.A., members FDIC. Spot me eligibility requirements and overdraft limits apply. And now for some more money rehab. So now FTX is actually suing SBF's parents? Walk us through that.

They're currently being sued by FTX for their civil proceeding, for their role in the advisory capacity that they had, and for the fact that assets were transferred, according to the lawsuit, from Sam to his parents. So they are now named in this civil complaint from the FTX new management and creditors. I think most people assume that when FTX went up in flames, it literally burned to the ground. But there's a new CEO and this company has enough infrastructure to sue. So talk us through the state of FTX right now. I thought it was done, but it's not. Well, essentially, the question is what's going to happen to FTX? By the way, the CEO of FTX now is a gentleman named John Ray, who is the CEO of Enron, who was brought in after the collapse of Enron to help unwind it. So whenever you see a very large bankruptcy, you have someone who's brought in to attempt to

essentially recover for the creditors, in this case, the depositors, but also banks and other people who extended credit to FTX to try and recover the most amount of money that they possibly can. And in that process, a new management at FTX has sued Joe Bankman and Barbara Freed, who are Sam's parents. When you have an entity that fails, that becomes bankrupt, you have creditors who lent it money, who have a higher priority than the common stockholders you try and recover assets from. You bring in a new management team. John Ray is an attorney who did this for Enron and some other companies dating back 20 years. And they're there essentially to see what they can do about recovering money for the people who lost money. Remember, the people that we haven't talked about yet here is the FTX depositors,

FTX customers, people who thought their crypto assets were safe because they were dealing with a company that ran Super Bowl ads, Larry David, Tom Brady, all these very well-known, familiar faces. And you had individuals who maybe weren't very sophisticated who went, deposited their hard-earned money on the exchange, wanted to buy Ethereum, wanted to buy Bitcoin, wanted to buy Ripple, and they lost money because the underlying company, FTX, went bankrupt. Those are the folks that new management is trying to recover funds from. And they're people who are still, obviously, as you might imagine, Nicole, very upset with SPF. Yeah. These bankruptcies and unwinding all this is super complicated. Where are the people that put their hard-earned money into this exchange on the list of creditors?

The very top of the stack. And we don't really know how much money is going to be... Yeah, typically when you have customers in case of depositors, employees who are owed back wages are very high up in the stack. This is the way the bankruptcy law works. This is what makes these cases so interesting. In the case of Bernie Madoff, I think the ultimate recovery for people who were the victims of Mr. Madoff was something like 88 cents on the dollar. So there were assets that were recovered. Hopefully,

that's what's going to happen in this case. You don't really know. One of the challenges here is that because crypto is such a volatile asset class, the price declining can be catastrophic. If you essentially have to set a particular mark in a calendar and say, okay, we're going to go and recover as of that date, there's the greater potential for loss because of the volatility of the underlying assets. But we're still too far away to know what the workout, workout is the technical term you use in a bankruptcy, what the workout looks like for customers, how much money that they deposited they're going to get back. But where is this money coming from?

It's coming from the assets that the company still has. Some of those are claims on digital currencies like crypto and others are, for example, the real estate portfolio that FTX is currently suing the Bankman Freeds and others over. So their apartments and stuff? Yeah, there's real estate down in the Bahamas. There was some very expensive real estate that FTX owned and that essentially executives were living in the Bahamas. There was some very expensive real estate that FTX owned and that essentially executives were living in at the time. So creditors are going to have to sell all of that stuff in order to find money. There's no money right now. There's assets that need to be liquidated.

Yeah. Cash is an asset, but there are real estate portfolios and other things that need to be unwound. And the challenge with this is when you never know exactly what you're going to be able to get, especially when you have to liquidate something very quickly. There is cash or there isn't? I suspect there's probably some nominal amount of cash on the balance sheet that they had. The problem was that the liabilities massively exceeded the assets of the company. And that's why Sam Bankman Freed declared bankruptcy. It's interesting, Sam Bankman Freed always maintained that his greatest mistake, if you asked him and you saw some of the bizarre rantings that he had on Twitter,

he spoke to reporters. And one of the things that he said was that his biggest mistake was declaring bankruptcy. This was a constant leitmotif that he would maintain. The biggest mistake he made was declaring bankruptcy. The reality is you have no choice when you have essentially your liabilities exceed your assets. It's something that has to happen. It's not like something that's voluntary. Nobody wants to declare bankruptcy. You only do it when you have no choice. Tanya Brown- So is the exchange actually operating right now? Jason Lowery Well, it's not operating as an ongoing business. If you go to the FTX website, you can't log into your account, you can't transfer your assets. But it is currently the new management is doing this transitional phase where they're trying

to liquidate the assets. That's what Mr. Ray is presiding over. Are there bids to restart this thing? There are some folks out there who want to do that, but it seems as though it's a toxic and poisonous name. Would you invest in Bernard L. Madoff securities if they spun it up again? I don't think there's a whole lot of people who would feel really happy or secure about putting their assets on FTX. That's fair. I certainly would not. But I've said this for a very, very long time, henceforth why I'm currently wearing one of our hoodies that says, told you so, crypto bro.

So Nicole, do you own crypto? I own such a small amount of Bitcoin. And do you actually have your own wallet, your own private keys? Did you go through that whole dance of getting into the ecosystem? I just bought it on Public, which is an app I like to use to buy crypto treasuries. They're really easy to buy there, unlike treasurydirect.gov, which is where fun goes to die. So no, I don't have the whole wallet. So you own it basically through an app. You have a custodial wallet where somebody else

controls your private keys. That's right. But it's negligible. If I lost my Bitcoin, it would be fine. And that's constantly what I say to people who are asking how much should they buy of crypto? And I say, keep it to the big boys and no more than 1% of your net worth. And everybody has a net worth, Ash. It's not just rich folks. Some have negative net worth. So then you should invest negatively in crypto. You're saying it's basically like it's Vegas money for you? It's money you could afford to

lose at like a practice table. Totally. Do you disagree? I mean, I'm not a financial advisor. I mean, most people who are responsible in the space who talk about asset allocation would say things like 1%, 2%, 3% of your total net worth invested in crypto. How much do you have in crypto? I get a little bit. I get a little bit, but I actually play with it. That's what's fun, right? Is to be able to go and have, for example, an Ethereum wallet and be able to transfer funds and actually see how it works. To me, that's the interesting part. It's not about whether the price goes up today, tomorrow, next week, next year. It's the technology. It's the being able

to actually interact with the network. That's what's super fun. And I think that's what the techie folks who really love crypto are interested in. They can sort of see this evolution in their minds of where we're going to be in five years or 10 years. That's what's exciting about the space. That's what's fun. So Ash, I end my episodes by giving listeners one tip they can take straight to the bank, do you have a piece of advice on how to protect yourself from financial fraud or a bad investment specifically in crypto? Look, for me, I think the fun is about trying to interact with this stuff. And if you're interested, if you're curious, if you're not thinking about this as an investment, if you're just thinking about it as like an experience, to me, what's really fun and interesting is setting

up your own non-custodial wallet and going through the process of seeing how this network works. That's what's interesting about it to me. And I get it. It's a little bit nerdy. It's a little bit wonky, but it's fun. It's interesting. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Levoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News

and TikTok at Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make. Thank you.