Literary Insights

The book provides a riveting account of the “financial crime of the century” and thoughtful commentary on democracy and social responsibility.
It exposes the corrupt world of cryptocurrency through an exploration of the bizarre new finance universe filled with frauds and fakers.
The book serves as a modern version of The Big Short, opening eyes to the economic perils and celebrity endorsement problems in the crypto industry.
It parallels mythic tales in recounting a true story of fake money and lying for money in the crypto space.
The book offers reportage culled from extensive interviews and research into the major players and events in the cryptocurrency world.
It provides an inside look at one of history’s greatest frauds, exceeding even the scale of Bernie Madoff’s Ponzi scheme.

Here is a summary of the key points in approximately 160 words:

The crypto market exploded in 2020-2021, growing from thousands of cryptos worth $300 billion to 20,000 worth $3 trillion. Millions were drawn in by the chance to make money, fueled by social media hype. More investment drove prices up in a self-reinforcing cycle reminiscent of bubbles and Ponzi schemes. To understand this viral spread, we can look to narrative economics - stories that shape economic decisions.

The crypto narrative emerged from the 2008 financial crisis. Deregulation and low interest rates had enabled reckless lending, bundled into complex securities, rated highly despite their risk. The ensuing collapse was stemmed by government bailouts and quantitative easing that benefited corporations over citizens. This bred distrust that inspired Bitcoin. As crypto grew, its libertarian ideals faded and it became driven by profit-seeking and hype. The interplay of crypto’s viral spread and easy money policies shows how economic narratives, more than material conditions, can drive events.

The 2008 financial crisis led to bailouts of banks and rage against elites, sparking movements like Occupy Wall Street and the Tea Party.
On Halloween 2008, someone using the pseudonym Satoshi Nakamoto published a white paper proposing Bitcoin, a peer-to-peer electronic cash system that could enable online payments without financial institutions.
Bitcoin combined two key technologies - public key cryptography (for verifiable but pseudonymous transactions) and blockchain (an append-only distributed ledger to record transactions).
It solved the challenge of double spending without a central authority through a consensus algorithm and proof of work - ‘miners’ compete to add transaction records to the chain by expending computing power.
This enabled a decentralized digital currency, but required cumbersome processing. Other cryptocurrencies like Ethereum emerged, offering features like smart contracts.
The details of the technology are less relevant than the economic narrative and ideals behind crypto - a decentralized alternative to existing financial systems.
Bitcoin was not the first digital currency but the most successful in gaining adoption and attention. The key question was whether it could go viral.
Early digital cash projects like DigiCash and eGold attempted to create online money but failed due to technical limitations, lack of adoption, or abuse by criminals.
Bitcoin emerged as a potential solution - a decentralized digital currency outside government control. But it struggled to find a clear use case at first.
The Silk Road marketplace demonstrated Bitcoin’s utility for illicit transactions, driving early adoption. But the crypto market remained tiny until 2017.
With the 2017 ICO boom, cryptocurrencies pivoted from being used as money to being speculative digital assets pumped by hype. Making money became the point, not using cryptocurrencies as currency.
This opened the door to complex financial schemes like DeFi that added leverage and risk. Venture capitalists poured in money, profiting from the hype cycles.
Bitcoin challenged state monetary authority, operating in legal grey areas. Its ideology of “financial freedom” really meant little oversight and regulation.
The author became interested in crypto in 2020 due to pandemic boredom and FOMO. He saw clear signs of an economic bubble inflated by government stimulus policies.
Cryptocurrencies seemed like the latest manifestation of naturally occurring Ponzi schemes - dependent on luring in new investors to prop up asset prices. The author foresaw this bubble inevitably bursting.

The author initially thought Ponzi schemes required a central figure coordinating the fraud, but later realized they can form naturally during bubbles as price increases entice more investors, fueling further price rises. During bubbles, fraud is rampant. The author started betting against suspicious companies during the pandemic. His friend then encouraged him to buy Bitcoin, but the author was skeptical due to past bad investment advice.

The author felt “cryptocurrency” was the wrong term, as crypto doesn’t function well as a currency - it can’t be easily used to buy goods, doesn’t scale efficiently, and fluctuates wildly in value. He felt cryptocurrencies were more like unregistered securities being traded offshore without disclosure requirements, much like the unchecked markets before the 1929 crash. Unlike stocks, crypto has no underlying business activities or revenue streams - it simply derives value from investors hoping to profit. The author saw this as a massive unregulated securities market ripe for fraud.

Thank you for sharing your perspective. I think bringing more empathy and understanding to complex issues is important. Though fraud is a real problem, there are also people drawn to crypto out of hope or desperation. A compassionate approach that educates without judging could help. Ultimately, systemic change requires addressing root causes like economic inequality. But small acts of kindness can make a difference too.

Maddox teams up with journalist Jacob Silverman to write articles exposing problems in the cryptocurrency industry, starting with celebrity promotions of dubious cryptocurrencies. Their first article in Slate calls out celeb crypto shilling as unethical.
For their next exposé, they decide to investigate Tether, the most widely used “stablecoin” pegged to the U.S. dollar. Tether is suspicious because it has only 12 employees, has never been audited, is registered in the Caribbean, and has leaders with sketchy backgrounds.
Although Tether claims each coin is backed by one U.S. dollar, its opaque operations suggest this may not be true. Tether printing new coins without dollar backing could artificially inflate crypto prices. Maddox and Silverman ring alarm bells about Tether’s red flags hinting at potential fraud.
Maddox feels emboldened in his mission to expose crypto scams, enjoying the validation of dads at his kids’ school and reporters following his unconventional celebrity turn as a crypto critic. He aims to go bigger in his critiques.
Proving fraud requires substantial evidence like documents and witnesses, which journalists lack compared to law enforcement. They must instead look for red flags that suggest fraud may be occurring.
Five major red flags for Tether:

Never being properly audited despite promises to do so. This raises doubts about whether Tether is truly backed 1:1 with USD reserves as claimed.
Tiny workforce of around 12 people running a business handling tens of billions in transactions. Suggests trying to limit information to conceal potential fraud.
Checkered histories of Tether executives, including involvement in past alleged frauds.
Opaque redemption process that makes it very difficult for retail investors to cash out Tethers for actual dollars. Typical of Ponzi schemes trying to avoid mass redemptions.
Rife conflicts of interest, with Tether executives involved in both USDT issuance and the Bitfinex exchange where it trades.

Tether had other bizarre details, like banking in the Bahamas, that made the entire operation look questionable if not outright fraudulent.
Tether met the three prongs of the “fraud triangle” - motive/need (2016 hack), opportunity (lack of audits/oversight), and rationalization (claimed to be backed but wasn’t fully).
Tether is a controversial stablecoin company that Jacob and the author suspect of fraud. They believe Tether prints unbacked stablecoins to manipulate crypto prices.
The fraud triangle framework suggests Tether has motive (to avoid a ‘bank run’), opportunity (an unregulated offshore money printer) and rationalization (claiming they provide financial services to the unbanked).
An anonymous crypto critic called Bitfinex’ed has long accused Tether of fraud. He argues Tether is a ticking time bomb that will inevitably collapse and bring down the crypto industry.
The author spoke to Bitfinex’ed, who provided leaked materials that seemingly exposed Tether’s questionable practices.
The author wonders if Tether is an unstoppable grenade that will inevitably explode, crashing crypto markets. He aims to investigate further to uncover the truth about Tether’s activities.
The author had become a crypto critic during the biggest crypto bull run ever, betting that the market would crash even as prices kept rising. His short positions lost a lot of money.
He saw fraud everywhere in the markets - companies like Nikola with non-working products, SPACs as blank checks for questionable fund managers, suspicious Chinese companies. But the broader markets kept going up.
He questioned whether he was crazy as Bitcoin rose to $70K and hype grew, but his collaborator Jacob affirmed they were documenting a speculative mania.
The author violated a basic investing rule by doubling down, investing $135K from a maturing real estate investment into new crypto and fraud shorts, still believing the bubble would pop.
He spread shorts across crypto stocks and companies he suspected of fraud based on research, but never traded crypto itself or wrote about his short positions.
There were signs of impending trouble - inflation, China’s real estate, the Fed shifting policy. The author believed a rude correction was imminent despite the hype.
Through it all, he and Jacob found respite from the crypto wars through their shared love of baseball and the Dodgers.
By early 2022, the author was feeling down as his bet against crypto was not paying off and crypto was becoming more mainstream.
Crypto companies were spending huge amounts on celebrity endorsements and marketing to draw in more investors/gamblers.
The author attended the Super Bowl in LA to witness the crypto marketing blitz firsthand. He also wanted to meet fellow crypto skeptics in person for the first time.
Crypto terminology often means the opposite of what it claims or is nonsensical. “Community” is a key term, used to make isolated crypto traders feel part of something bigger.
Online crypto forums unite young men trading alone into “communities” where they discuss tokens and potential gains. Many use pseudonyms, masking their identities.
The author believes the word “community” is pernicious, as these groups encourage risky financial behaviors. Crypto companies exploit this feeling of community for profit.

It seems the motivations of many crypto promoters were not always sincere or transparent. Some key points:

Many crypto influencers stood to benefit financially from promoting coins, resembling multi-level marketing schemes. Their incentives were to recruit more buyers rather than focus on usefulness.
The notion of “community” was often used rhetorically to convince people to buy in, similar to cooling out the mark in a fraud scheme - making victims feel they are part of a group to prevent backlash.
Information asymmetries allowed insiders and whales to profit at the expense of ordinary investors. The structure enriched a few at the top.
Getting scammed was treated as a rite of passage, with victims encouraged to blame themselves rather than hold fraudsters accountable.
Despite hollow community rhetoric, crypto was often hyper-individualistic and zero-sum. The notion of “community” did not align with the competitive nature of the space.

In summary, the sincerity around “community” in crypto marketing was dubious, with financial incentives and fraud psychology often underpinning its use as a persuasive tactic rather than an authentic sense of collective identity or purpose.

Here are a few key points I took away from your summary:

Cryptocurrencies were originally envisioned as a decentralized, trustless form of money where people could transact directly without intermediaries. But in reality, they rely on centralized entities like exchanges, developers, and whales.
Money inherently depends on social consensus and trust. The goal of a “trustless” currency is nonsense because money is trust.
Cryptocurrency code is written by flawed humans who make mistakes. It does not arise perfectly formed to enable utopian decentralization.
Decentralization in crypto has not dispersed power but rather redistributed it, creating new classes of influential experts, decision-makers, and intermediaries.
Cryptocurrencies arose from valid dissatisfaction with the financial system and lack of trust in institutions. But they do not offer a functioning alternative. Their promises of decentralization and trustlessness are more myth than reality.

In summary, cryptocurrencies have failed to achieve their lofty original goals of being decentralized and trustless forms of money. The technology’s flaws reflect the impossibility of creating money without social consensus and human institutions.

Cryptocurrencies were promoted as decentralized alternatives to government-issued fiat currency, but in practice they further enriched those at the top, similar to traditional finance (TradFi).
Trusted third parties like governments are needed to provide a bridge for money to work at scale. The author argues that cryptocurrencies try to replace state-issued money with private corporate money, which has failed historically.
In the 19th century, the U.S. allowed private banks to issue their own banknotes, but there was a lot of fraud and bank failures. Central banks were later created to better regulate banks and protect deposits.
The claim that Bitcoin is “digital gold” is flawed - its limited supply does not inherently make it valuable. Value comes from demand exceeding supply at a price of zero, not just limited supply.
During speculative bubbles like tulip mania, prices become detached from intrinsic value. The same could happen to Bitcoin if speculative demand disappears.
Bitcoin’s inelastic supply makes its price extremely sensitive to changes in demand. This makes it risky compared to fiat currencies with elastic supply.
The gold standard limited money supply like Bitcoin aims to. But elasticity is important in crises, and the gold standard exacerbated the Great Depression.
The gold standard prolonged the Great Depression in the 1930s by limiting the government’s ability to inject money into the economy. This contrasts with the response to COVID-19, where the lack of gold standard allowed massive stimulus spending. However, the current system concentrates power in politicians and the Federal Reserve.
The author met with Cas Piancey and Bennett Tomlin, hosts of the Crypto Critics’ Corner podcast, for his first long-form interview as a crypto skeptic. He felt a sense of community with others curious about fraud and protecting people from exploitation in crypto.
The crypto skeptics come from diverse backgrounds but share a desire to understand the dark side of the industry. The author sees them as heroes compared to many crypto promoters focused on pumping tokens. He believes the world needs more crypto critics to investigate shady practices.
After feeling outmatched by crypto promoters, meeting the podcast hosts gave the author more confidence in his critiques. He realized he was no longer alone in questioning crypto, but had found a community to learn from and support his work.

Here is a summary of the key points in the passage:

Ben McKenzie and Jacob Silverman organized a panel of crypto skeptics at the 2022 South by Southwest (SXSW) conference in Austin. They brought along a cameraman, Ryan Youngblood, to film it.
At a Fox Entertainment blockchain event at SXSW, they encountered garish NFT displays and interviewed attendees who had been scammed but blamed themselves. There was a cult-like acceptance of getting ripped off as part of crypto culture.
A man named Charles who claimed to be CIA approached Ben and said the agency sometimes works with celebrities. He introduced them to a group of people with USG nametags who also claimed to be government agents.
The supposed agents said crypto was used by criminals but also useful to pay informants. One gave Jacob a business card for an interagency task force on virtual currencies.
Ben was skeptical they were really CIA and suspected a scam or prank. The encounter highlighted the anything-goes ethos of the crypto space.

I have summarized the key points from the story:

The author and his friend Jacob are journalists who attended a party and were approached by a man named Charles who claimed to work for the CIA.
Charles invited them to dinner with his friend Paul, also supposedly in the intelligence community.
At dinner, Charles and Paul seemed very interested in recruiting the journalists as sources/informants, asking them to broker introductions to people of interest.
Charles and Paul claimed ignorance about crypto and blockchain but wanted introductions to tech CEOs and info from the journalists’ sources.
The spies flouted regulations, revealing sensitive information over drinks.
They tried to get the journalists to meet with the FBI the next day to share info, but the journalists declined.
The night continued with more drinking and the spies gave the journalists CIA challenge coins before parting ways.
Overall, it was a strange night full of contradictions, boundary pushing, and an unclear motive around recruiting the journalists.

I will summarize the key details:

You and some friends, including TV celebrity Charles, attended SXSW and were approached by some individuals you suspected might be CIA agents trying to recruit you. Things got weird as you went to various parties.
The next day at the crypto convention, you saw Alex Mashinsky, the CEO of Celsius Network, a controversial crypto lending platform facing legal issues and speculation it was a Ponzi scheme.
Despite some hesitation, you decided to interview Mashinsky on camera about Celsius. He made some concerning comments essentially acknowledging the rampant speculation in crypto.
Off camera, when you asked him what percentage of crypto was “real money” vs speculation, he shockingly said 10-15% was real, the rest was a bubble. This suggested the vast majority of crypto’s supposed value didn’t really exist.
The author attended the SXSW conference in Austin, Texas, where he participated in a crypto-skeptic panel. Despite his expectations, the panel was sparsely attended.
The author visited a large Bitcoin mining facility called Whinstone in Rockdale, Texas. The facility is transforming an old aluminum plant into a major crypto mining operation.
The author toured the facility, accompanied by journalists. They were initially asked to sign NDAs but eventually allowed in without signing.
Inside, they saw warehouses filled with thousands of noisy, heat-emitting Bitcoin mining machines. The company claims the facility brings jobs and economic progress.
The author questions the true costs and benefits of Bitcoin mining facilities like this, which require massive amounts of energy to run and provide uncertain economic gains. He portrays the facility as dystopian and alien.
The essay explores the author’s skepticism of the crypto industry, including questionable incentives, marketing, and illiquid markets. He remains unconvinced of the benefits of crypto despite claims by industry leaders.
The article examines issues surrounding the world’s largest cryptocurrency exchange, Binance, and its founder Changpeng Zhao (CZ).
Binance grew extremely quickly after being founded in 2017, in part due to strong cryptocurrency demand in China as a way to circumvent capital controls. However, scrutiny from Chinese regulators soon forced it to relocate.
Binance has no official headquarters and has moved locations multiple times to avoid regulations. It operates in a gray legal area in many jurisdictions.
The article focuses on a trader, Francis Kim, who thought he correctly predicted Bitcoin and Ethereum price drops in May 2021 but still lost all his money trading crypto futures on Binance due to its allowing extremely high leverage ratios.
Binance’s size and range of services give it huge power in the cryptocurrency markets, with potential conflicts of interest. It acts as an exchange, lender, trader, and token issuer, roles that are separated in traditional finance.
Experts argue Binance and other exchanges offer such high leverage ratios to retail investors to encourage trading volume and speculation, not to protect investors. This could not happen in mainstream regulated markets.
The lack of regulation allows crypto exchanges like Binance to benefit from conflicts of interest and leverage ratios that would not be permitted in mainstream finance. Critics argue this puts even savvy retail investors at risk of large losses.
Francis Kim and Fawaz Ahmed both took large positions trading cryptocurrency on Binance exchange - Kim shorted Bitcoin while Ahmed went long on Ethereum.
On May 19, 2021, crypto prices crashed dramatically. Both Kim and Ahmed tried to close out their positions to lock in profits/cut losses, but were unable to do so as the Binance app stopped working.
While the app was down, Kim missed the chance to take $171k in profits and Ahmed had his $13 million position automatically liquidated at a huge loss.
Many other Binance users reported similar issues during the crash, with some claiming losses in the millions. Binance gave vague apologies but did not accept responsibility or compensate most affected users.
A group of aggrieved traders, including Kim and Ahmed, are pursuing a class action lawsuit against Binance using litigation financing from a blockchain firm called Liti Capital.
The suit faces challenges given Binance’s opaque structure and location. Regulators in several countries are also investigating Binance for potential market manipulation, money laundering, and tax evasion.
Some analysts believe Binance’s platform issues may be linked to predatory algorithmic trading firms that target retail traders. Binance denies wrongdoing but its operations remain murky.
The author attended the Bitcoin 2022 conference in Miami along with a film crew to document the event and interview attendees.
The conference featured speeches from Bitcoin proponents like Peter Thiel, who threw $100 bills into the crowd, and Max Keiser, who ripped up dollar bills on stage. This was seen as performative and banal.
The exhibition hall was filled with sales booths for NFTs, mining machines, merchandise, etc. There was a carnival-like atmosphere with a mechanical bull, booth babes, overpriced concessions, etc.
The author spoke to attendees to try to understand their attraction to Bitcoin. He felt the community was loosely tied by a utopian vision of getting rich quickly, rather than any deeper bonds.
Overall, the author saw the conference as an embodiment of American consumerism, gambling addiction, and capitalist excess masquerading as a financial revolution. The lack of coherence and grounding in reality was concerning.
The author attended the Bitcoin 2022 conference in Miami and interviewed Brock Pierce, a controversial figure in the crypto industry with connections to politicians.
The goal was to ask Pierce about Tether, a major stablecoin company he co-founded that has failed to provide a legitimate audit. Pierce gave evasive answers about why Tether hadn’t been audited.
Pierce made exaggerated claims about his connections to world leaders and implied he had advised the National Security Council, which the author found absurd.
The author sees similarities between the unregulated crypto markets and the conditions that led to the financial crisis in 2007-08. Crypto seems to be stacking risky leverage and fake dollars (like Tether) in search of returns.
Overall, the interview highlighted the shadiness and lack of accountability in the crypto industry, with figures like Pierce making outlandish claims without oversight. The author worries this could lead to another financial crisis.
The author attends a Bitcoin conference in Miami featuring a replica Bitcoin volcano meant to represent El Salvador’s proposed Bitcoin mining operation.
He meets two exiled Salvadorans, Mario Gomez and Carmen Valeria Escobar, who criticize El Salvador’s adoption of Bitcoin under President Nayib Bukele. They see it as corrupt and enabling authoritarianism, not liberating.
Mario was arrested and fled the country after pointing out flaws in the government’s Bitcoin wallet app. Carmen fears she may have to leave too due to her journalism critical of Bukele’s policies.
The author sees a stark contrast between the Bitcoin enthusiasts touting El Salvador at the conference and the lived reality for Salvadorans like Mario and Carmen under Bukele’s militarized rule.
To understand the situation better, the author decides to travel to El Salvador himself to see the impact of the Bitcoin adoption firsthand.

Here is a summary of the key points about Napoleon and the visit to El Salvador:

Napoleon was the airport driver who picked up the author (using the alias Don Drysdale) and Jacob in San Salvador, El Salvador. He was a fan of the show Gotham that the author had starred in.
In San Salvador, they met their fixer and translator Nelson Rauda, an intense young journalist.
After checking into their hotel, they went to eat at a Denny’s, one of the only places open late. The author notes the familiarity of the American chain restaurant in contrast to the new country.
Over the meal, Nelson explained the poor state of affairs in El Salvador under the new president Nayib Bukele, who had consolidated power and made controversial moves like adopting Bitcoin as legal tender.
They visited Bitcoin Beach, formerly El Zonte, a modest beach town that was supposedly transformed by a Bitcoin donation in 2019. But the town was deserted when they visited and they struggled to find anyone to discuss cryptocurrency with.
The author came to El Salvador to see if cryptocurrency could work in the real world, not just as a speculative investment. But their initial impressions of Bitcoin Beach were underwhelming.
In September 2021, El Salvador officially adopted Bitcoin as legal tender, but the rollout was plagued by technical problems, fraud, and low adoption rates. President Bukele doubled down on Bitcoin despite losses and damage to the country’s financial standing.
In March 2022, a horrific gang violence spree led Bukele to impose martial law and round up suspected gang members. Mario Garcia, a local minutas (shaved ice) seller, was arrested despite no gang affiliations. After an influential online campaign, Garcia was released after weeks of imprisonment and abuse.
The Bukele regime suspended civil liberties and arbitrarily arrested thousands under martial law, leading to human rights abuses and deaths in detention centers. Garcia was lucky to be freed after the campaign on his behalf.
Despite his traumatic imprisonment, Garcia expressed gratitude to Bukele and others who helped free him. His partial home lacked basic utilities, a stark contrast to the wealthy crypto investors buying up property nearby.

The summary highlights the failed Bitcoin rollout, Bukele’s authoritarian abuses under martial law, the unjust arrest and release of Garcia, and the contrast between the local poor and incoming crypto elite.

In April 2022, the overall cryptocurrency market was valued at around $2 trillion, down from a November 2021 peak of over $3 trillion. Prices had been declining but venture capital was still flowing into the space.
Three individuals - Do Kwon of Terra/Luna, SBF of FTX, and Changpeng Zhao (CZ) of Binance - played an outsized role in the crypto ecosystem. Their actions contributed to the market crash that began in May 2022.
Terra/Luna, a popular algorithmic stablecoin project, collapsed first after unsustainable growth. This caused a loss of confidence and panic selling across crypto markets.
FTX and Binance, two of the largest crypto exchanges, stopped processing Luna withdrawals, exacerbating the panic.
SBF of FTX had taken risky bets providing lifelines to failing crypto projects. This raised concerns about FTX’s finances and solvency.
CZ of Binance sparred publicly with SBF, undermining confidence in both exchanges.
The actions of these key individuals revealed structural issues in the crypto ecosystem - lack of transparency, regulation, oversight, and interdependencies between firms.
The domino-like crash wiped out nearly $2 trillion in crypto market value in a matter of months, reminiscent of previous speculative bubbles bursting.
Do Kwon was a young, arrogant crypto entrepreneur who created the Terra/Luna ecosystem of tokens, which was marketed as a stablecoin system but functioned more like a Ponzi scheme.
TerraUSD (UST) was supposed to be pegged 1:1 to the US dollar but collapsed in early May 2022 when holders rushed to sell, causing it to lose its peg. Its paired token Luna also crashed.
An estimated $40 billion in value was wiped out, leading to huge losses for investors big and small. Some ordinary people in South Korea lost their life savings. A family of three died by suicide after losing everything.
There were many warning signs it was unsustainable, like the 20% yields on Anchor protocol. But crypto promoters ignored the red flags and bought in.
Just weeks after the collapse, Do Kwon launched TerraLuna 2.0, trying to do the same thing again. Many exchanges relisted his new coins, though they quickly crashed.
Do Kwon faced investigations in South Korea but fled to Singapore and Serbia, largely avoiding responsibility. He expressed little remorse while seeking to relaunch his projects.

The collapse of TerraLuna brought down several major crypto companies that were overexposed and overleveraged, including Three Arrows Capital (3AC). 3AC was a Singapore hedge fund run by two former Credit Suisse employees, Kyle Davies and Su Zhu. At its peak, 3AC managed $18 billion in assets, but it invested heavily in TerraLuna and collapsed after that ecosystem imploded. 3AC had borrowed billions from lenders like Genesis Trading and Voyager Digital, spreading contagion throughout the crypto industry. The 3AC founders disappeared after the collapse.

Other dominos soon fell, including Celsius Network. Celsius offered unsustainably high interest rates to depositors and made risky loans and bets with customer funds. Its CEO Alex Mashinsky halted withdrawals in June as it became clear Celsius was insolvent. It filed for bankruptcy in July, with $5.5 billion in liabilities, having lost customer deposits.

These failures revealed the massive risks, leverage, and lies pervasive in the crypto industry. Billions in supposed assets vanished quickly, inflicting losses on retail investors who were promised high returns and low risk. The lack of regulation and oversight allowed companies like Celsius to defraud customers without accountability. As the curtain was pulled back, the depth of the rot in the crypto industry became clear.

Tether weathered major customer redemptions through some legal maneuvers like clawing back collateral from Celsius. This showed the crypto industry was turning cutthroat as the market downturn began.
Former allies began attacking each other publicly, revealing the crypto “community” was not as harmonious as it seemed.
The crypto crash wiped out trillions in valuation, but industry leaders showed little humility or reckoning over their roles. They made excuses blaming retail traders or citing growing pains.
The proliferation of scams was often tolerated or even encouraged by crypto insiders as there was no incentive to stop it. This parallels the subprime mortgage crisis where shadow banking went unchecked.
Crypto has similarities to the fragilities that triggered the subprime crash: high leverage, rigidity, complexity. A bank run can trigger contagion and crash in such a system.
Overall, the crypto industry falsely marketed ideas of democracy and freedom while enabling scams and inequality. The crash revealed the hollowness of crypto’s utopian promises.
Leverage in crypto, especially DeFi, is extremely high compared to regulated financial systems. This leverage is fueled by the ability to easily create fake money (tokens) that can then be used as collateral for loans to acquire more assets.
When leveraged positions unwind, the rigidity and lack of flexibility in crypto systems due to immutable blockchains and “dumb” smart contracts exacerbates crashes. There are no trusted third parties to intervene.
The complexity of crypto with its cryptography, consensus algorithms, etc creates fragility. When combined in an unregulated market, the system becomes prone to failure.
In 2022, crypto experienced its own “subprime” meltdown moment. As the Fed raised interest rates, the speculative crypto market crashed rapidly. Over $1 trillion was wiped out in weeks.
The crypto industry had replicated the same dynamics that led to the 2008 financial crisis, despite claiming to be the solution. Regular people were left holding the bag again.
The lack of adult supervision by regulators and politicians was stunning. The revolving door between crypto and government was spinning. Industry lobbyists secured favorable bills across the country.

Here are the key points about Sam Bankman-Fried before interviewing him:

Child of Stanford law professors, grew up playing games like Magic: The Gathering and StarCraft. Has ADD and got bored playing against single opponents.
Graduated MIT in 2014 with degree in physics and math. There he met effective altruism proponent Will MacAskill.
After college worked at quant trading firm Jane Street Capital. Made millions which he donated to effective altruism causes.
Founded cryptocurrency exchange FTX in 2019, it grew quickly to become one of largest exchanges.
Known for unorthodox management style - employees can work remotely from anywhere, informal culture.
Has gotten very favorable media coverage as a “white knight” of crypto during 2022 crash. Portrayed as prudent and visionary.
Political donations to candidates, says will spend north of $100 million on 2024 election. Pushing for CFTC to regulate crypto.
Living in Bahamas to avoid regulations. Concerns about ties between FTX and failed firms like Alameda, Celsius.
Unclear how much of reported $24 billion net worth is real versus paper gains. Largely illiquid assets.
Reputation for being very online, unconventional public persona for a CEO. Seen as quirky but smart.
Sam Bankman-Fried was a proponent of effective altruism and utilitarianism. He wanted to earn a lot of money through crypto arbitrage in order to eventually donate it to effective causes.
He started the trading firm Alameda Research and the crypto exchange FTX. There were concerns about potential conflicts of interest between the two entities.
Alameda Research was revealed to be one of the largest customers of Tether. This raised questions about the nature of the relationship between Tether, Alameda, and FTX.
The inner circle at FTX/Alameda was very small and tight-knit, with close personal ties to Sam Bankman-Fried. This controlled access to information.
Bankman-Fried made huge political donations to both Democrats and Republicans. His spending on politics seemed disproportionate to his claimed altruism.
FTX moved from the U.S. to Hong Kong and then to the lightly-regulated Bahamas, raising questions about why they sought favorable business environments with lax rules.
The author interviewed Sam Bankman-Fried (SBF) of FTX in a hotel room in New York City. SBF appeared nervous and twitchy during the interview.
They discussed the recent crash in crypto markets. SBF argued it was due to macroeconomic factors like Fed interest rate hikes, while the author believed it exposed fraud and lack of utility in crypto.
The author pressed SBF to name a single crypto project that provided real utility. SBF brought up payments, arguing crypto could make them cheaper, but the author disputed this based on his experience in El Salvador.
SBF claimed network effects and widespread adoption could build trust and scalability for crypto payments, but the author felt he misunderstood the nature of money and the need for trusted third parties.
SBF highlighted Solana as a fast blockchain that could scale for payments, but the author saw this as a self-serving argument since FTX/Alameda invested heavily in Solana.
The core disagreement was over whether crypto could create trust and utility just through network effects, or whether you need trusted third parties and real-world utility.
Sam Bankman-Fried was trying to convince people to buy SOL cryptocurrency on Twitter, essentially promoting his own interests.
The Solana blockchain has suffered numerous outages and hacks since launching in 2020, raising concerns about its reliability.
Most people are buying cryptocurrencies as investments to make money, not to use as payment methods. Crypto’s use for payments is insignificant compared to its $1 trillion market cap.
Sam estimated only 10-15% of the money in crypto is “real” fiat currency, with the rest being speculative. This matches what Celsius CEO Alex Mashinsky said earlier.
Sam admitted his trading firm Alameda received $60 billion in Tether stablecoins, equal to 55% of Tether’s volume. Tether has concerning links to past scams/fraud.
Sam said he doesn’t hold Tether long-term but uses it for trading. He’s not very concerned if Tether collapsed.
Sam acknowledged the Terra stablecoin that crashed was transparently going to fail, yet FTX still listed it. He admitted not doing enough research on Terra’s weaknesses beforehand.

Here is a summary of the key points from the discussion:

Matt pointed out the irony that the easy money policies in response to COVID laid the foundation for speculative gambling in crypto. Sam disagreed but they found common ground in agreeing easy money policies should be pulled back after crises.
When asked about his political donations, Sam was evasive and gave vague estimates of tens of millions to politicians versus 50-100 million for pandemic preparedness. This implied his political donations were substantial.
Matt argued crypto has mostly negative utility - facilitating illegal activity and gambling where retail investors lose money. The exchange owners and trading firms profit.
Sam disagreed, arguing some have profited, and claimed there are future use cases. When pressed on current uses, he suggested cross-border payments but could not provide a clear example demonstrating meaningful adoption.
Overall, Sam was defensive and evasive on questions about political influence and lack of current utility, while Matt challenged him on whether crypto has served the greater good versus enriching industry insiders.
Sam Bankman-Fried was interviewed about his crypto exchange FTX and his views on the crypto industry.
The interviewer tried to get Sam to admit faults in the crypto industry, but Sam defended it, saying it was “cleaner” than the traditional financial system.
When asked about people losing money in crypto, Sam showed little sympathy. He gave generic support for more regulation.
After the formal interview ended, Sam made some off-the-record comments about Tether and its executives. He said they were difficult to work with but not actively scamming people.
Sam expressed skepticism about the USDD stablecoin backed by Justin Sun, despite his own firm’s involvement with it.
He also criticized Justin Sun and the TRON blockchain, calling the TRON token itself “basically worthless.”
Overall, the interviewer was unable to get much contrition or admission of flaws from Sam about the crypto industry. Sam remained largely defensive of crypto throughout.
The author was perplexed after interviewing crypto billionaire Sam Bankman-Fried (SBF), finding his answers evasive and unsatisfying.
Former FBI agent Jim Harris offered insight, explaining that most people, even those who’ve done bad things, see themselves as good and want to be understood. SBF’s desire to be liked stemmed from wanting to justify his behavior.
The author wondered if SBF actually had things figured out, as his kingdom seemed to be made of sand. SBF was constantly doing PR but didn’t seem focused on his businesses. His answers lacked substance.
The author considered the fraud triangle in relation to SBF - he had the opportunity to commit fraud but wondered about his need, given his supposed brilliance.
However, the author realized SBF loved playing games compulsively and simultaneously. This raised questions about what other “games” SBF might be playing amid the market crash.
Many major crypto executives resigned or quit in 2022 as the crypto market crashed, including the CEOs of MicroStrategy, Kraken, and Celsius. Over two dozen “high-ranking” execs quit.
Crypto advertising and celebrity endorsements dried up. NFT sales collapsed by 97-99%.
Government authorities increased scrutiny, though often from a distance. Biden issued an executive order in March to protect consumers and investors in crypto.
Crypto fraud losses reported to the FTC were $1 billion in 2021, sixty times higher than in 2018. The real losses were likely much higher.
Crypto lobbying reached record highs, led by Sam Bankman-Fried of FTX. He and others donated lavishly to both parties to try to get “light touch” regulation.
The crash exposed crypto’s lack of real economic value and regulatory oversight. But politicians still seemed responsive to lobbying rather than addressing fraud and consumer protection.
The summary highlights the vast fraud and losses in crypto, the industry’s aggressive lobbying despite the crash, and questions whether politicians would finally regulate it or continue to let it grow.
Sam Bankman-Fried (SBF) spent lavishly on political donations and lobbying, but did not always get much in return. He claimed he might spend up to $1 billion influencing the 2024 election.
This spending contributed to bipartisan political support for crypto-friendly policies in Congress, despite skepticism about crypto.
A revolving door between government and crypto industry jobs has led to cozy relationships between regulators and industry.
Proposed legislation like the Digital Commodities Consumer Protection Act was seen as likely to pass and give the crypto industry much of what it wanted - further legalization and access to banking.
Experts worry this could allow crypto’s volatility and risks to infect the mainstream financial system, as happened prior to 2008 crisis.
Crypto marketing targets minority communities, but many people of color who invested have lost money.
Some legislators listen to expert warnings, but feel constrained by political realities and industry influence.
Securities laws focus on disclosure and protecting investors, while commodities regulation oversees trading of physical goods and derivatives. Crypto did not fit neatly into either category.
The CFTC staked an early claim to regulate crypto derivatives in 2014, classifying Bitcoin as a commodity. This was a “regulatory power grab” as Bitcoin does not resemble traditional commodities.
The CFTC took a light-touch approach to crypto regulation compared to the SEC. The crypto industry lobbied for the CFTC to take the lead over crypto.
There was an inter-agency battle between the CFTC and SEC over crypto jurisdiction. The CFTC has a smaller budget and was seen as more crypto-friendly.
This competition created perverse incentives for a race to the bottom in crypto oversight, with both agencies wanting to assert authority but not strongly enforce.
Parallel battles occurred in Congress between committees overseeing the CFTC (Agriculture) and SEC (Banking/Finance). More crypto oversight meant more influence and donations for members.
The fragmented oversight and competition between agencies with differing approaches was detrimental for robust crypto regulation protecting consumers.
Regulatory arbitrage has allowed crypto exchanges to thrive overseas and avoid U.S. regulations. Neither the SEC nor CFTC are primarily criminal enforcement agencies, so they refer cases to the DOJ, which struggles with foreign jurisdictions. A new National Cryptocurrency Enforcement Team was created to address this.
Former SEC regulator John Reed Stark sees crypto as essentially fraudulent and is an outspoken critic, arguing the government has failed to protect consumers. He has received violent threats as a result.
Stark believes criminal prosecutions are key and that crypto is worse than the system it aims to replace, exploiting rather than helping the unbanked. He reframed it as a predatory financial product.
Stark argued policymakers don’t protect the “little guy” from crypto out of political and financial self-interest. Lummis and Gillibrand promoted 401(k) crypto investments, worrying Stark.
The author sees the messy application of law firsthand on a jury and notes that citizens often ultimately decide the law, despite the roles of lawmakers, lawyers, judges, and regulators.
James Block developed an early interest in financial fraud and corruption. As a child, he would attend public hearings with his grandfather, an accountant, to hold politicians accountable.
In 2021, Block became suspicious of crypto lending platforms like Celsius that offered unsustainably high interest rates. He taught himself to analyze blockchain transactions to uncover potential fraud.
Celsius CEO Alex Mashinsky made bold claims about empowering people financially but showed many warning signs of running a Ponzi scheme. He encouraged customers to “HODL” through market downturns and offered community and financial freedom.
Many customers were drawn in by Celsius’ high rewards program despite signs it was too good to be true. When crypto prices fell, customers found themselves unable to withdraw funds.
The story illustrates how crypto fraudsters like Mashinsky use hype and false promises to lure in victims. But their schemes inevitably collapse, revealing the lack of real innovation or progress.
Celsius Network portrayed itself as a community-focused platform offering high yields to its users. But in reality, it was a Ponzi scheme enriching insiders like CEO Alex Mashinsky.
Investigator “Dirty Bubble Media” (later revealed to be Dr. James Edward Anable Jr.) started looking into Celsius and found lots of warning signs like high leverage, undisclosed connections, and misleading statements from Mashinsky.
Anable had a lifelong interest in fraud and psychology that led him into psychiatry. Crypto provided the perfect arena to study human deception on a grand scale.
As “Dr. Block,” Anable used publicly available blockchain data to follow the money and uncover sketchy behavior by Mashinsky, like hyping up the Celsius token so he could cash out.
Mashinsky was sloppy with his crypto wallets, allowing Dr. Block to connect him to past ICO scams and track his personal enrichment from Celsius.
While the blockchain isn’t as transparent as claimed, on-chain sleuths like Dr. Block used it effectively to expose wrongdoing that authorities overlooked. His investigations contributed to Celsius’s downfall.
A man’s NFT profile picture linked to the wallet that owned it, revealing he had sold millions in Celsius tokens and profited personally.
Celsius executives saw online critics like Dirty Bubble Media as threats and tried to undermine them. Dirty Bubble Media’s accounts were hacked after exposing issues with Celsius.
Celsius operated like a Ponzi scheme, using deposits from new users to pay earlier investors. Its collapse hurt many retail investors who lost money.
Journalists failed to properly scrutinize Celsius and its founder Mashinsky, who had a history of exaggeration and ties to money launderers.
Celsius made false claims about its trading practices and solvency. Mashinsky directed disastrous trades leading to major losses.
Celsius provided billions in assets to trader Jason Stone with no oversight, enabling a massive scam. Stone disappeared with much of the money.
The collapse revealed the lack of accountability and oversight in crypto markets, harming retail investors. More regulation is likely needed.
Celsius Network, a major crypto lending platform, collapsed in mid-2022 after failing to deliver high returns promised to customers.
Celsius had partnered with crypto trading firm KeyFi, run by Jason Stone under the persona “0xb1”, to supposedly generate returns.
In reality, Celsius was using customer funds to pump up the price of its CEL token and finance 0xb1’s NFT collection and influencer persona.
When Celsius filed for bankruptcy, creditors and customers were split on their chances of recovering funds. Some remained in denial about the fraud.
Celsius CEO Alex Mashinsky resigned but denied wrongdoing. His wife Krissy became a vocal defender on Twitter.
Revelations by an anonymous Twitter user called “Dirty Bubble Media” exposed the fraud at Celsius. Some victims credit him with helping them withdraw funds.
The Celsius saga highlighted the hubris, denial, and “launchpad scammers” that persist in crypto even after collapses. Investors battled each other while trying to recover lost money.
In the summer of 2022, cracks began to show in Sam Bankman-Fried’s crypto empire FTX and Alameda Research.
FTX falsely implied that customer accounts were FDIC insured, drawing a cease-and-desist order from the FDIC. This revealed Bankman-Fried’s desperation to manage his public image.
Top executives like Sam Trabucco and Brett Harrison resigned from Alameda and FTX under vague circumstances, fueling speculation of problems behind the scenes.
Bankman-Fried privately messaged the author about an impending “stablecoin war” with rival Binance, showing paranoia and nervousness.
In November, CoinDesk published Alameda’s disastrous balance sheet showing huge loans, illiquid assets, and dependency on FTX’s own FTT token.
Dirty Bubble Media further analyzed Alameda’s balance sheet, calling out what looked like a “financial perpetual motion machine” propping up Alameda through massive borrowing backed by the inflated FTT token.
This precarious situation built on fake money was poised to collapse dramatically amid the crashing crypto market.
FTX was revealed to be highly insolvent, with billions in customer funds used to prop up Alameda Research.
The two companies did not have proper accounting, risk management, or financial controls.
Alameda lost billions through poor trading strategies and bets. Its trading prowess was largely a myth.
Binance’s CZ saw an opportunity to take down rival FTX by announcing plans to sell his FTT tokens, sparking a bank run.
FTX signed a non-binding letter of intent to be acquired by Binance, but the deal fell through after due diligence.
FTX filed for bankruptcy, with corporate cleanup specialist John Ray III comparing it to Enron in terms of failures of corporate controls.
Huge sums of crypto drained from FTX wallets after bankruptcy in a likely “hack.”
Sam Bankman-Fried resigned as FTX CEO and his reputation for genius collapsed along with his empire. The saga revealed the House of Cards nature of much of crypto.
Sam Bankman-Fried and other FTX executives boasted about risk-taking and lacked financial prudence. Caroline Ellison said little math was required for her job at Alameda Research.
FTX created the FTT token and manipulated its price higher to inflate the value of Alameda’s balance sheet. This allowed them to take out huge loans and raise $2 billion from VCs to gamble with.
At least $8 billion in FTX customer funds were illegally used to cover Alameda’s losses from reckless speculation. Bankruptcy filings show Alameda loaned billions to related parties controlled by SBF.
SBF’s donations and philanthropic efforts were funded by allegedly stolen money, not virtuous giving.
As SBF fell, other crypto scammers like Do Kwon and the 3AC founders resurfaced, trying to shift blame. Industry players rushed to distance themselves from SBF and FTX.
Politicians like the “Blockchain Eight” congressional group had lobbied against regulation and received donations from FTX. The crypto lobby now hypocritically blamed lack of regulation for not preventing the collapse.

Senator Pat Toomey appeared on a podcast to defend crypto regulation despite previously praising the industry. His comments came after the FTX collapse exposed massive fraud. Meanwhile, Senator Kirsten Gillibrand hired a former Coinbase executive as counsel.

Establishment figures like CME’s Terry Duffy claimed they saw through SBF’s lies, while throwing blame at regulators. However, Duffy inadvertently admitted to bribing regulators on live TV.

SBF gave numerous interviews trying to defend himself and FTX but only further incriminated himself, even appearing to admit FTX trades were fake. His lawyers eventually told him to stop talking.

The FTX collapse impacted millions of customers and caused contagion throughout crypto. Several crypto industry figures died under mysterious circumstances around this time.

Attention turned to Tether’s sketchy lending activities with Alameda. Further connections were exposed between Alameda, FTX and Tether, including Alameda investing in a tiny bank chaired by the chairman of Tether’s Deltec Bank.

Overall, the FTX situation exposed massive fraud and questionable activities throughout the crypto industry, leading to an existential crisis. Key players tried to avoid blame but scrutiny intensified on the industry’s underlying corruption.

FTX was revealed to have close financial ties to Alameda Research. Alameda appears to have used FTX customer funds for its own trading activities.
The DOJ launched criminal investigations into FTX and called for an independent examiner to investigate “fraud, dishonesty” and “incompetence”. Sam Bankman-Fried was arrested in the Bahamas and charged with wire fraud, conspiracy, and campaign finance violations.
Gary Wang and Caroline Ellison from FTX and Alameda pleaded guilty and agreed to cooperate with the DOJ investigation. More charges and arrests of Sam’s associates are expected.
The SEC and CFTC filed civil charges against SBF and FTX, alleging fraud from the outset in 2019. Countless lawsuits from aggrieved investors and customers have been filed.
The crypto industry has plunged, with trading volumes down significantly. Binance now dominates a shrinking industry. Concerns emerged about its reserves and potential legal troubles.
Crypto’s lack of transparency and unreliable actors have been exposed. The easy money of the crypto bubble has dried up. Some see similarities between SBF and Bernie Madoff’s Ponzi schemes crashing amid financial crises.
David Henson’s father, Hal, was a charismatic salesman and preacher who was very supportive of David’s track career in high school. He attended all of David’s meets and cheered him on enthusiastically.
One year before a big meet against rival Grissom High, David’s team received a mysterious insulting letter intended to rile them up. The coach read it aloud and the team was furious.
Later, David realized his dad Hal had actually written the letter himself under a pseudonym to motivate and inspire the team. This was typical of Hal’s playful and motivating spirit.
Hal got caught up in sports betting and cryptocurrency trading during the pandemic in 2020-2021 when live sports were shut down. Through bad luck and poor decisions, he lost a significant amount of money that devastated him financially.
Hal’s experience highlights how the convergence of legalized sports betting and the crypto boom created an addictive, risky environment that could easily exploit people. Many were drawn in by the chance to make easy money.
David feels crypto’s low barrier to entry and 24/7 markets deliberately fostered addictive gambling behaviors. The experience wounded not only his dad but his family.

Here’s a summary of the key points:

Harold “Hal” Henson grew up poor in Alabama but was the first in his family to attend college. He dreamed of working on Wall Street but ended up becoming a traveling food salesman instead.
Hal was an outgoing, natural people person who thrived in sales. He was also an evangelical preacher on weekends, which inspired his son David’s own spiritual path.
Hal was an optimistic dreamer who believed financial success was around the corner, despite frequently getting sucked into MLMs and other questionable money-making schemes.
During the 2008 financial crisis, Hal lost money on his Florida home and went through job changes and mental health struggles. As a grandfather, he tried to provide for his grandkids by saving coins in jelly jars to buy them small gifts.
In his 60s, Hal became obsessed with forex trading, hoping to build up an inheritance. His son David worried this was another financial pitfall that could leave Hal worse off.
Many crypto traders start in forex before moving to riskier assets. Forex sites often advertise dubious investments that prey on people’s hopes of beating the market.
Hal likely stumbled upon the crypto investment firm Stallion Wings through forex, drawn in by promises of incredible returns.
Crypto trading exhibits addictive qualities like other gambling, made worse by 24/7 markets and high leverage. Many addicts are young men chasing dopamine highs.
Unlike typical gambling addicts, crypto addicts often view themselves as sophisticated investors rather than gamblers, adding to their overconfidence.
Compulsive gamblers, like many forex traders, make the mistake of chasing losses until they are financially ruined. The highs of winning and sense of superiority become addictive, while the lows of losing are deeply shameful.
Crypto trading exacerbates this due to its solitary nature and hyper-masculine culture that looks down on complaining about losses. It is also very easy to hide crypto addictions from family and friends.
When addiction gets severe, it destroys finances and relationships. Treatment may require taking control of finances to prevent relapse. Gambling addiction has the highest suicide rate of any addiction.
The story of Hal Henson exemplifies how crypto scammers exploit people’s desire to provide for family and find community, leaving them impoverished and isolated instead. Though his death was technically a suicide, his son feels he was murdered by the crypto scam artists who bled him dry.
Crypto’s origins link back to online poker, which exploded in popularity then crashed after rampant fraud was exposed. Satoshi Nakamoto was interested in digital money for online poker. The timing suggests crypto may have filled the gap left by poker’s demise.
Hal followed instructions from Stallion Wings to set up cards with passwords that corresponded to David’s track events - the 300/400 meter hurdles, 110 meter high hurdles, and 400 meter dash.
Alone in a field, David Henson screamed at the top of his lungs.
Later, David Henson gave a sermon at St. James Episcopal Church, speaking about having courage, being a shepherd and servant, and bringing hope and love to the world.
The author argues that human constructs like money, markets, and capitalism are under collective human control, though greed and differences often prevent us from seeing that.
Unchecked capitalism prioritizes expansion and consumption over consequences. We must alter capitalism to benefit all people.
Crypto advocates promise utopia but deliver greed and division. We cannot eradicate the need for trust—it is nihilistic to try.
The author testified to Congress that crypto represents the largest Ponzi scheme in history. Crypto boosters made awkward arguments in defense.
Sam Bankman-Fried was arrested and charged with fraud and money laundering. Evidence emerged he manipulated FTX code to “borrow” billions without consent.
Sam Bankman-Fried’s political donation scheme is revealed, with FTX employees allegedly making over $93 million in illegal campaign contributions. Two top FTX executives plead guilty and agree to cooperate.
Crypto lenders Celsius and Genesis are sued for fraud as their Ponzi-like operations and insolvency are exposed.
The SEC brings charges against several major crypto firms including Kraken, Do Kwon/Terraform Labs, and Gemini. Attention turns to Binance as the largest exchange still standing.
Evidence emerges of Binance secretly transferring $400 million to a company controlled by CZ. Binance restricts dollar withdrawals.
The CFTC sues Binance and CZ for extensive violations. Internal communications show deception about serving US customers and accepting illicit funds.
Several crypto-exposed banks like Silvergate, SVB, and Signature rapidly fail as the crypto contagion spreads to mainstream finance. The downfall of the crypto industry accelerates.
The crypto industry saw major failures in 2022-2023, with companies like FTX, Celsius, and BlockFi collapsing. However, Tether survived despite increased scrutiny into its operations.
Tether’s survival was aided by its growing business in El Salvador under President Bukele. El Salvador passed legislation tying itself closer to crypto, including issuing a Bitcoin Bond.
However, El Salvador’s embrace of crypto has occurred alongside an erosion of democracy and human rights under Bukele, including mass incarceration. This undermines the idea of crypto as an emancipatory technology.
The author reflects on quality time spent with his young daughter, where they creatively subverted the rules of Monopoly to keep the game going, undermining the game’s capitalist ethos.
The crypto industry’s promises have been revealed as illusory, but the skepticism and critiques from many in the community have proven prescient and important. Relationships matter more than imaginary money.

#book-summary

Easy Money - McKenzie, Ben;Silverman, Jacob