Congrats to @ZekeFaux on the publication of his rip-roaring fun book on the crypto con game, NUMBER GO UP, which is out today. The whole thing is great; here's a little sample from his @NYMag excerpt https://t.co/UFvZaAZriJ
— Andrew Rice (@riceid) September 12, 2023
Mad props to Zeke Faux, at NYMag — “With Sam Bankman-Fried, Gisele, and a credulous Michael Lewis at the zenith of crypto hype”:
“Three years ago, nobody knew who you were. And now you’re sitting on the cover of magazines. And you’re a gazillionaire. And your business is, like, one of the fastest-growing businesses in the history of the planet.”
Sam Bankman-Fried giggled and nodded nervously, shaking his messy crown of curly hair, as the writer Michael Lewis lavished him with praise. They were onstage at a resort in the Bahamas for a conference put on by the 30-year-old billionaire to celebrate the success of his crypto exchange, FTX. It was April 2022, and pretty much everyone who mattered in the world of virtual currencies had flown in for the occasion — plus Bill Clinton, Katy Perry, and Tom Brady for good measure.
Bankman-Fried was dressed slovenly as usual, in gray shorts and a gray FTX T-shirt. Lewis looked like a prep-school headmaster, wearing a blue blazer with peak lapels and a white button-down with blue accents, his floppy hair parted perfectly to the side. The way he was talking about Bankman-Fried, he sounded as if he were presenting a prize to his star pupil. “You’re breaking land-speed records,” Lewis said. “And I don’t think people are really noticing what’s happened, just how dramatic the revolution has become.”
I’d heard that Bankman-Fried was going to be the subject of Lewis’s next book. But the author’s questions were so fawning they seemed inappropriate for a journalist. Listening from the packed auditorium, I started to question whether Lewis was really writing a work of nonfiction or if FTX had paid him to appear. (Lewis later told me that he was there as a reporter and that he was not compensated.)
I’d come to the Bahamas because I was about a year into an investigation of the crypto world. I wanted to understand why the prices of bitcoin and hundreds of lesser coins — with ridiculous names like dogecoin, solana, polkadot, and Smooth Love Potion — were going up and up. Crypto boosters claimed they were in the vanguard of a revolution that would democratize finance and create generational wealth for those who believed. The roar of the rising prices drowned out the skeptics. Incomprehensible jargon became inescapable. Blockchain. DeFi. Web3. The metaverse. What these terms meant was beside the point. Newspapers, TV, and social media bombarded readers with stories of regular people who invested and got rich virtually overnight.
Crypto seemed like a giant slot machine that had been rigged to pay out almost every time. Hundreds of millions of people around the world gave in to the temptation to pull the lever. Everybody knew somebody who’d hit it big. And the more people who bought in, the higher prices rose. By the time of the conference in the Bahamas, the total market value of all of crypto was $2 trillion.
From the beginning, I had thought that crypto was pretty dumb. And it turned out to be even dumber than I imagined. There was no mass movement to actually use crypto in the real world. The crypto apps hyped as the future of finance and art barely worked. As I crisscrossed the globe, from El Salvador to Switzerland to the Philippines, all I saw were scams, fraud, and half-baked schemes. By the end, I’d find myself in Cambodia, investigating how crypto fueled a vast human-trafficking scheme run by Chinese gangsters…
Bankman-Fried’s other turns onstage at the conference were similarly mindless. He stumbled through an interview with the former British prime minister Tony Blair and Clinton, who at one point extended a fatherly hand of support. He exchanged banalities about charity with Gisele Bündchen, with whom he’d posed for an FTX ad campaign that ran in Vogue and GQ, and platitudes about leadership with her husband, Tom Brady…
It was depressing to see that many people whom I had admired had been co-opted by Bankman-Fried to promote crypto gambling. I’d later learn Brady and Bündchen were paid about $50 million in stock for their endorsements. Clinton was reportedly paid at least $250,000 to appear at the conference.
The crowd there lacked the quasi-religious fervor I’d seen at more plebeian crypto gatherings. Instead, the attendees fell into three groups. There were the venture capitalists, who’d gotten in early, watched the tokens they bought climb to ludicrous heights, and now believed they could predict the future. There were the founders of crypto start-ups, who’d raised so many millions of dollars that they seemed to believe their own far-fetched pitches about creating the next generation of finance. Then there were the programmers, who were so caught up with their clever ideas about new things to do inside the crypto world that they never paused to think about whether the technology did anything useful.
At a party for a project called Degenerate Trash Pandas, I asked one coder if crypto would ever be helpful for regular people. “Why is it that you think that is important?” he said to me, in total sincerity. “I really would like to know.”…
Another crypto executive showed me a digital image of a sneaker that he’d bought for $8 and that he said was now worth more than $1 million. He told me that recently, all owners of these imaginary sneakers had been issued an image of a box, which was itself worth $30,000. When he opened the box, he found another picture of sneakers and another box, each of them valuable in their own right. “It’s this never-ending Ponzi scheme,” he said happily. “That’s what I call Ponzinomics.”…
The next time I saw him was in November 2022, in the lobby beneath his $30 million apartment. It was eight days after FTX declared bankruptcy with $8 billion of his customers’ money gone missing. On the way over, I had imagined Bankman-Fried’s mood would be grim. I’d even worried that he might be suicidal. But when he greeted me, shoeless, in his familiar wrinkled uniform, he seemed surprisingly upbeat.
“It’s been an interesting few weeks,” Bankman-Fried said, and together we rode the elevator up to his penthouse.
I’d think that right now, among the myriad people looking to strangle SBF, Michael Lewis would not be in the rearguard.
Sam Bankman-Fried's philosophy led him to some dark places says 'Number Go Up' author and Bloomberg reporter @ZekeFaux https://t.co/wfEF73k7xA pic.twitter.com/fA9u4NLor8
— Bloomberg (@business) September 14, 2023
ok, so previously… SBF leaked his ex Caroline's diaries to the NYT (and got his bail revoked for witness tampering)
but turns out SBF also leaked his own diaries to @TiffanyFong_ who now leaked them to the NYT too?
amazing shenanigans!!!!! 😂https://t.co/mLIDBFgl8R
— Tracy Wang (@0x_tracy) September 14, 2023
investigative journalism is still being kept alive and well by the likes of reporters like @ZekeFaux
in this clip, zeke describes traveling to cambodia to investigate "pig-butchering" crypto scams
oftentimes, these rackets are put on by chinese gangsters holding workers captive pic.twitter.com/9lElhkcUMo
— This Week in Startups (@twistartups) September 14, 2023
War for Ukraine Day 568: Russian Occupied Crimea Under Threat
Alison Rose
I’m glad I never put in the effort to understand crypto.
Omnes Omnibus
Michael Lewis has had a bad couple of weeks.
wjca
Single best financial move I ever made was telling my financial advisor “No crypto.” Not that he would have. He’s a pretty bright guy.
West of the Rockies
@Alison Rose:
Same.
Jeffro
Crypto, NFTs, voting for Republicans…it’s all just a feel-good scam
rikyrah
@Alison Rose:
It was a grift from the beginning
Villago Delenda Est
Bullshit.
Villago Delenda Est
@rikyrah: Is it any wonder that war criminal scum and shitty excuse for a businessman Elno Muskrat got involved in it?
BlueGuitarist
@Alison Rose:
Classic description of crypto:
”imagine if idling your car all night produced solved sudokus that you could use to buy heroin”
(alas, don’t recall whom to credit)
Alison Rose
@BlueGuitarist: LOLOL!!!
Ken
There’s an interesting recent discussion of “Number Go Up” with Zeke Faux over at Crypto Critics’ Corner. You don’t need any knowledge of crypto to follow along — basically the theme is “why did anyone participate in such an obvious scam” (spoiler: those who got out early made money, as in every Ponzi).
In related news, Molly White looks at Sam Bankman-Fried’s jail conditions on her blog. On the one hand, he’s not being treated any better than other prisoners; on the other hand, that’s pretty bad treatment.
Ukai
@Omnes Omnibus: No kidding. Doesn’t take away from how good Liar’s Poker and Moneyball are, of course, but I’m sure he would rather not have had his name in the news like this.
Old Dan and Little Ann
“Another crypto executive showed me a digital image of a sneaker that he’d bought for $8 and that he said was now worth more than $1 million.”
This is so fucking dumb it makes my brain hurt.
MattF
I’ve been reading chapters from the book for the past few days. It gets a bit repetitive, but still worth reading. I recommend Molly White’s web3 ‘news’ site for a running detailed narrative of the various scammy operations still going on.
The Pale Scot
I need to apologize to ya’ll, a couple of days ago I wrote something so nasty that WaterGirl deleted. I don’t remember what it was because I was deep in my cups. I stopped drinking a few years ago (diabetes). But I lost a lot of weight and my blood sugar is ridiculously normal so I started up again. Obviously can’t hold it anymore ‘cause I woke up in my undies on the living room floor. I’ve pretty much left the internet other than BJ and LGM. Before I comment here I just wanted to Mea Culpa. Sorry guys,
Have ao good night
Mr. Bemused Senior
Like all speculative bubbles, those who get in early and have the sense to cash out before the crash can make money.
Computer security folks knew from the beginning this is a scam. Krugman pointed that out too.
frosty
@Omnes Omnibus: Yes. Indeed. He’s done a lot of good work, and I won’t dismiss it all from a couple of bad weeks, but he’s got to tighten up his reporting.
Elizabelle
Crypto. Set Fyre to your money.
Villago Delenda Est
@Mr. Bemused Senior: One would think (ha!) that people would have remembered the internet crash of the late 90s, which caused me to think of tulipmania in the 17th century.
HumboldtBlue
Are we really sure Zeke is the real deal?
laura
@The Pale Scot: I wish you a gentle night. I hope you know that there is support and care. You take all due care, and know that there’s help if you reach out your hand.
dmsilev
The only thing of value created by crypto was a whole long set of object lessons on why financial regulations exist.
Tehanu
@Alison Rose:
Me too. And the bit about why would anyone care if crypto helped “regular people” is the heart of it for me. SBF & the like-minded cohorts are sociopaths.
RSA
Good God. I remember when I was young and naive and would argue with libertarians online. I especially remember one exchange, when I asked how some stupid libertarian policy would affect the less fortunate. “Why do you care so much about poor people?” they said. I could only dredge up a Mystery Science Theater 3000 riff: “It’s a human thing–you wouldn’t understand.”
MattF
@Villago Delenda Est: Except that crypto makes tulipmania look like conservative financial management. Considering that the tulips actually exist.
JCNZ
@Elizabelle: Brilliant.
laura
@MattF: All my Apes are gone!11!
eclare
@Omnes Omnibus:
What a downfall from The Big Short.
Villago Delenda Est
@MattF: It’s telling that Bitcoin won’t accept bitcoin for payments for membership; you need to send real fiat money.
JCNZ
@BlueGuitarist: Yolo Contendere (@theophite) on Reddit.
JCNZ
@laura: Why I love this place.
Shalimar
@frosty: The couple bad weeks expose horrible judgment and ethics over the last 2 decades. I don’t think Lewis’ reputation will recover.
eclare
@Elizabelle:
Hahaha, that’s good!
wjca
Not only that, you can always plant the bulbs and end up with something beautiful. Nothing beautiful comes from crypto.
Chetan Murthy
@Omnes Omnibus: I’m actually pretty disappointed to hear that he got taken in. I mean, he’s been around the finance business long enough to understand that lots of people sling bullshit and use impenetrable jargon to ward off (let’s call it) invasive fisking. I’d have thought that the minute he realized he was in over his head (which surely he did, or he’s a *moron*) he’d have called in an expert from the “opposing camp” (there are quite a few who are well-known) and had them take apart anything he’d been told …. at least, after each meeting with the crypto shitbirds.
Something inside me wants him to surface with a bunch of date-stamped videos wherein he reveals that he was never taken in. But somehow, I fear that the truth is much, much, much worse.
Sigh.
zhena gogolia
@JCNZ: Me too!
Rusty
Who would have guessed that something invented to allow criminals to have an untraceable way to buy and sell drugs, evade taxes and avoid any financial regulation, would turn out to be a scam. I’m just shocked
Another Scott
@BlueGuitarist: Theophite, as cited by Major Major Major Major:
HTH!
[ slow again!! ]
Cheers,
Scott.
Boris Rasputin (the evil twin)
@The Pale Scot: I feel your pain. You can get back on the wagon, trust me.
This may be one of the few instances where the Jackals can sincerely say “thoughts and prayers.”
Chetan Murthy
@BlueGuitarist: I’m still partial to Krugthulhu’s “Dunning-Krugerrands”.
Alison Rose
My oldest friend Rachel (known her since we were 9, so 34 years!) is an opera singer and she’s amazing. This is from a few years ago (pre-pandemic), and she hasn’t been able to do much recently what with having a lot else going on, but the video came up in my FB memories today and I enjoyed watching it again and thought some of you might like it, too.
BlueGuitarist
@JCNZ:
thanks!
BlueGuitarist
@Another Scott: thanks!
Omnes Omnibus
@Alison Rose: She’s very good. Thanks for posting it.
BlueGuitarist
@Chetan Murthy:
hahahaha! Excellent!
zhena gogolia
@Alison Rose: That’s beautiful!
BlueGuitarist
@Elizabelle:
excellent!
Alison Rose
@Omnes Omnibus: @zhena gogolia: Glad you enjoyed! She’s incredibly talented. She also teaches guitar and singing to little kids.
Ksmiami
@Mr. Bemused Senior: nah – it was a classic Greater Fool scam wrapped up in a Technobabble wrapper
Ksmiami
@wjca: you can even eat tulips!
mrmoshpotato
But I thought this bitchass was a billionaire!
Oh, wait, he can’t even afford a $20 haircut!
Cellmates with the orange shitstain?
Barbara
@Alison Rose: I first heard Solveig’s Song when my husband’s cousin sang it as part of her college graduation recital.
Thanks for the link.
Timill
Thinking of opera:Birgit Nilsson and Grane
I knew of this: I didn’t know there was film.
waspuppet
Not only could no one tell me how crypto would actually make my life better, but I served on a federal grand jury for six months in 2021-22. If cryptocurrency is used for anything but sex trafficking, drugs, child pornography, illegal guns and hoping someone will pay you real money for it, someone’s gonna have to show me.
Chetan Murthy
I’ve talked with a number of folks in the crypto world over the years. One thing I’ve noticed about *all* of them, is that they always
That a guy like Lewis couldn’t see this is …. disappointing.
wjca
TIFG would find himself green with envy. Even allowing for more years of successful grifting.
Roberto el oso
@wjca: they could braid each other’s hair and be besties.
Barbara
@Chetan Murthy: It’s unfathomable. Like, he should call it a day and retire.
Soprano2
It was obvious to anyone with common sense that crypto was a scam. I thought it was started by people who thought it could be used to avoid taxes. NFT’s are the dumbest thing I’ve ever heard of, but kudos to the people who used them to separate wealthy people from their money. If you’re dumb enough to think an internet picture of something is worth millions of dollars you deserve to get ripped off.
Brachiator
@Soprano2:
Cryptocurrency will be around for a while. The IRS is also introducing a new form, 1099-DA, to show information for transactions involving digital assets.
karen marie
@The Pale Scot: This breaks my heart. I hope you’re able to get back on the wagon and figure out another way to manage.
Old Man Shadow
We really to tax the shit out of rich people. They have too much money to flush on obvious scams.
Frankensteinbeck
I am completely not surprised that Bill Clinton was there. Forget cryptocurrency. People were schmoozing, and schmoozing is Bill Clinton’s passion.
@waspuppet:
That was nine tenths of it. A vast game of speculation, where people owned vast fortunes on paper that they would never be able to cash out.
Kelly
I have a cousin that sold a bunch of animated jelly bean NFTs. He and son netted a several 100k in a couple months. His original background was graphics. He’d recently retired from the computer game industry. His son put him up to it as a lark. Pleasant bump to the retirement nest egg.
Dangerman
I lived in Tulare (CA) for a year (this is where I met Devin Nunes a couple of times, well before he was infamous; 2005ish).
Anyway, Tulare is know for a few things. One is the smell of cows, i.e., I consider myself a bit of an expert on the smell of bullshit.
Crypto was olfactorily offensive to the point how could anyone have been taken in by that bullshit?
I did get a deal on same good Tulip futures, however.
Shalimar
@Brachiator: As @waspuppet points out, the only real uses of cryptocurrencies are for illegal transactions you don’t want the IRS to know about. I’m not sure that form is gonna get much use.
Villago Delenda Est
@Elizabelle: ISWYDT
Chetan Murthy
@Shalimar:
This is something that has always bothered me. I mean, this is certain knowledge: there’s no doubt about this. And yet, so many otherwise normal people think nothing of participating in what is literally an anonymized chain of fences for laundering dirty money. For facilitating all manner of crimes. For facilitating our enemies as they try to destroy our Republic.
I couldn’t do it. But evidently, many millions have no objections at all.
HumboldtBlue
If you haven’t met Poppy the prairie dog ya here ya go.
mvr
Did this Zeke F guy do an interview on Marketplace on NPR about a book related to this? I heard such an interview this summer with some guy who was skeptical and good. I was driving back from fishing in Yellowstone so that would have put it in early to mid-July..
Embir
NFTs are so much dumber than they appear. You don’t own an image, you have no copyright, there is zero intellectual property involved. You pay someone to “own” a URL that points to a digital image that anyone can see and use and copy a million times. That URL is not guaranteed to exist even 5 minutes after you buy the right to say you “own” it. Also, 99% of the “art” involved is aggressively worthless dreck, and the other 1% is just plain ugly. But blockchain AI ooga booga alakazaam [waves a hand in your face while fishing for your wallet with the other].
eclare
@HumboldtBlue:
Awwww…
NotMax
Excuse me for a few minutes, off to give my pet rock its monthly polish.
//
JWR
Scab of the week: Little Billy Maher. But he’s only doing it for the little people, natch. (From CNN)
smike
@NotMax:
At least pet rocks are real, in-hand things. And unique – not another on like it in the world.
Villago Delenda Est
@JWR: Scabs like Barrymore and Mahar deserve nothing but eternal scorn for their perfidious actions.
Fled the US
Many of the resources used to mine crypto are not focused on AI. It’s the same people just pivoting to their new grift.
ColoradoGuy
That crypto was the only acceptable currency for data thieves and hostage-takers surely gave the game away. It was invented by criminals, for criminals, and relentlessly shilled by the Libertarian grifter community. Everything else was techno-bullshit.
lowtechcyclist
@eclare:
When I saw Lewis’ name above, I had to go check to make sure that was the same guy who wrote The Big Short, because it was hard for me to believe that someone who wrote that would be taken in by crypto.
How bizarre.
lowtechcyclist
@wjca:
Even worse, astounding quantities of electricity are consumed in the ‘mining’ for bitcoin. Not exactly helpful as global warming continues to heat up.
Anne Laurie
I’ve seen it referred to as the Al Capone Form: Now that the regulation exists, if you don’t declare your illicit profits, the government can bust you for tax evasion and *then* investigate what you’ve been doing that you didn’t want to see daylight.
Betty
@HumboldtBlue: Did you see John Thune justify the need for AR-15s as necessary to kill prairie dogs? Sad.
Ken
@lowtechcyclist:
New crypto projects commonly offer a “no-risk X% return”, where X is 15, 20, or even higher.
Other projects say that their business model is to accept crypto deposits and pay X% to their depositors, and will lend those assets to borrowers at a much lower — even 0 — rate.
Now, even the most tyro of bankers or investment advisors will recognize that both of those are impossible. If Lewis did not, he’s not all that bright despite his earlier books. If he did recognize that but pushed crypto anyway, he was very likely part of one of the scams.
Ivan X
Bought this the day it came out. Fantastic read so far. Well written, entertaining, and I keep admiring the author’s relentlessness and resourcefulness in trying to get an answer his one question, and just how far he’ll go to try.
Bugboy
@BlueGuitarist: I’m SO stealing that…
azlib
@Villago Delenda Est: AT least the Internet crash left useful stuff behind, like all the underseas fiberoptic cable with mind boggling bandwidth which form the backbone of our current global communications network.
Crypto just burns electricity uselessly.
Geminid
@Ken: I wonder if celebrity wenyt to Lewis’s head and affected his judgment.