<\/p>\n
The FTX collapse was an unmitigated disaster for everyone involved, from retail normies buying their first Sats to capital allocators with significant exposure to the doomed platform.<\/p>\n
For investors big and small, recovery from such bankruptcies can be a long and arduous process, Ryan Zurrer says. So instead of waiting for a resolution that could be years away, a creditor can immediately take a claim at a potentially lower value than the future payout. Such a claim only recovers a portion of lost funds, with current offers running around 40 cents on the dollar, according to Zurrer.<\/p>\n
On the Empire podcast (Spotify<\/a>\/Apple<\/a>), the Dialectic and Vine Ventures founder wonders aloud if it\u2019s better to take the claim now and hope for a better return on future investments than to take the actual payout that could be handed down in two or three years.<\/p>\n \u201cOr,\u201d he asks, \u201cdo you stay patient \u2014 and now you\u2019re an indirect owner of Anthropic, hoping for that to have a hundred billion dollar payout<\/a> \u2014 and then you get made whole?\u201d<\/p>\n \u201cIt\u2019s kind of wild how Anthropic came out of left field\u201d and could potentially make creditors whole, Delphi Digital co-founder Tom Shaughnessy says. He adds that he\u2019d rather take the 40 cent claim and put it into liquid crypto today.<\/p>\n It\u2019s not just for the money, Shaughnessy says, but for the betterment of his mental well-being that he would so so. \u201cI just wouldn\u2019t want to mentally have to wake up every day for the next two or three years wondering what my payout is going to be.\u201d<\/p>\n \u201cIt would just kill my energy and mental state,\u201d he says.<\/p>\n Angel investor Santiago Santos says the right approach to the problem all depends on the type of person involved. \u201cSome people are just not good at managing their portfolio,\u201d he says.<\/p>\n Soon after the FTX<\/a> collapse, creditor claims traded at only eight cents to the dollar, Santos says, adding that \u201ca lot of people picked them up.\u201d<\/p>\n On the other hand, Santos notes that savvy and sophisticated players well-versed in litigation finance might prefer to wait things out and see where the dust settles. \u201cThey\u2019re looking at the book. They\u2019re looking at the investments. They feel fairly comfortable.\u201d<\/p>\n Having said that, Santos admits that he, too, would take the claim at 40 cents. \u201cI have more confidence in my ability to outperform and manage my own capital,\u201d he says.\u00a0<\/p>\n \u201cWhat worries me here the most is the people that always win in this process is the lawyers. They are charging an arm and a leg.\u201d<\/p>\n Read more:<\/strong> Sam Bankman-Fried scores rare victory in Singh cross-examination<\/a><\/p>\n If the process drags out for years, the continuously mounting expenses could significantly diminish the final payout to creditors, Santos says. He expects things to get \u201cmore complicated,\u201d adding he is \u201cnot confident [that] lawyers understand key management better than people that have been in the space for longer.\u201d<\/p>\n \u201cI worry about their ability to really custody these assets [and] put them in a safe spot. So, for all of those structural reasons, I\u2019d rather take the money.\u201d<\/p>\n Zurrer warns, \u201cas much as FTX was an all time grift<\/a>, the unwind is going to be just an absolute fiesta of grift, and these lawyers are just skinning the thing.\u201d<\/p>\n Santos replies, \u201cConferences and crypto lawyers have been the most profitable, highest enterprises in the industry.\u201d<\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\nLawyers win big no matter what<\/h2>\n
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