Zeke Faux | Into To The Belly Of Crypto Mania.. Number Go Up?

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Number Go Up - Zeke Faux

#155 - The general consensus for Zeke’s book is that is that it’s the better half of Michael Lewis’s ‘Going Infinite’. 

‘Number Go Up’ documents, first hand, from the Bahamas to Cambodia to El Salvador to the halls of power of US, the wild mania of crypto and the insanely eclectic, deranged and interesting characters that colour in those lines. 

Zeke opens up unlike he has for a podcast before. 

His answer to the role of serendipity in his life at the end is beautiful, his reflections of what is required for good journalism is amazing, and his documentation of crypto’s wild ride and its consequences is perfect.

There is plenty for everyone is this.

• 00:00 – Introduction
• 01:47 – Has ‘Number Go Up’ Been Overshadowed? & Why Zeke Always Dreamed Of Doing An Adventurous Non-Fiction Book
• 09:17 – Why Crypto Is A Goldmine Of Content
• 23:28 – Tether
• 31:12 – Listing Crypto’s Damages
• 41:48 – Pig Butchering (Horrible Stuff Also Mentioned In Matthew Freidman Episiode)
• 53:37 – SBF Exclusive + How Crypto Enables The Scale Of These Scams
• 1:02:55 – Offshore Finance & Crypto
• 1:14:33 – How Collapsed Is Crypto?
• 1:19:47 – a16z Rug Pulling Everyone?
• 1:27:47 – Zeke’s Relationship With Michael Lewis
• 1:35:10 – Comparing Bubble Mania’s Over History
• 1:37:17 – Trying To Extract Every Possible Thing From The Interview With SBF
• 1:47:59 – How Journalists Get The Best Stories + How The Book Has Changed Zeke’s Career
• 1:53:41 – Hindenburg Research
• 1:57:57 – Serendipity In Zeke’s Life & Discussing David Grann
• 2:11:57 – County Zeke Is Bullish On & Conversation Between Any Two People Of History

Curious Things Mentioned During The Episode

• Scott Patterson
• Bradley Hope
• Matthew Friedman (Pig Butchering)
• David Grann

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Transcript

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SPEAKER_00 0:01

The following is with an investigative reporter for Bloomberg Business Week and Bloomberg News. His name is Zeke Fau, and he just published his debut book to immense critical acclaim. It's called Number Go Up, and the general consensus so far has been that it's the better half of Michael Lewis's Going Infinite. This book documents firsthand from the Bahamas to Cambodia to El Salvador to the halls of power of the US, the wild mania of crypto, and the insanely eclectic, deranged, and interesting characters that colour in between those lines. Zeke opens up unlike he has for a podcast before. His answer to the role of serendipity in his life at the end is beautiful. His reflections of what is required for good journalism is amazing, and his documentation of crypto's wild ride and its consequences is perfect. There is plenty for everyone in this. A bit of gossip about Michael Lewis, who authored the big short Moneyball, um Lies Poker, The Blind Side, his like potentially one of the most famous journalists in the world. Um Mark Andreessen and A16's role in the crypto bubble, the damage, the overall damage that crypto has caused, and the incredible characters at the heart of Tether, SBF, journalism and more. So join the newsletter, drop your email in the very top link, and publishing behind the scenes sort of stuff to each of these episodes, plus additional things, and leave a sly five stars in all of the algorithms, which for longtime listeners, they know now that means to pump a good juice with five stars in a Spotify and five stars in Apple. And with absolutely no further ado, here is the great Zeke FL. I wanted to start by reading you a tweet from Ashley Vance, um biographer of Elon Musk before Walter Isaacson. Um because it seems like you and your book hit a nerve with some of your journalistic comrades. So this is the tweet, Ashley Vance. Every major review of Michael Lewis's SBF book is the same. They chastise Lewis for taking it too easy on SBF, and then spent two paragraphs saying Zeke wrote a much better book in number go up, but none of them reviewed Foxx's book on its own. That was then retweeted by Scott Patterson, former guest on this podcast. I'm familiar with this phenomenon, and then liked by Tom Wright, uh, the co-author of Billion Dollar Whale, an amazing just like top-of-the-mountain investigative journalism piece. So you really struck a nerve with your comrades, but do you feel like the book has been overshadowed by the floodlights that is Michael Lewis?

SPEAKER_01 2:40

So, first off, it has been amazing part of putting this book out to get to meet and talk to some of these other like nonfiction authors who I'd really admire. I mean, Billion Dollar Whale, I was so jealous of when it came out, and I wish that I could I could do something like that. Um, it's like always been my dream to write one of these adventurous nonfiction books, so that has been really cool. And while I was writing the book, I became aware that Michael Lewis was also working on a book about crypto. And this is definitely like bad news, right? Like you don't want to be uh whatever he does is gonna be a number one bestseller, and it and it was his book going infinite. But as I worked on it, I kind of realized I just couldn't worry about that. And I was actually just having so much fun writing this book and doing this investigation, and I I realized I was like, it doesn't matter what he does, just get to the do whatever it it takes to get to the bottom of this crypto thing. Write the best book that you can, and what does it matter like if if uh what what his book what his book is like? And once I I finished the book, I was really proud of how it came out, and I thought, you know what? If Michael Lewis does a better book, I will tip my cap to him because I'm I think mine's pretty funny. I think people like it. Um and so it it did come out. Um and Michael Lewis's book did get a lot of attention, but it actually worked out kind of well for me because a lot of the despite the what um Ashley said in that really nice tweet, um a lot of reviews like New York Times, Wall Street Journal, Economist, LA Times, uh some others that I'm not even including, everybody's reviewing Michael Lewis's book because it's just like a big deal. Michael Lewis wrote a book. The the guy who wrote The Blind Side has something new. So these reviews have been getting a lot more attention than like a review of some random book by a first-time author would get. And they're all saying, quite amazingly, um, hey, you should check out Zeke's book instead. Like, number go up is really funny, and you you might like it better than Michael Liss's book. So it's been um beyond like my wildest dreams for how this would be received. Um I sort of thought I'm a little bit of a cynical guy. So I thought um maybe somebody, just to be contrarian, would write one book, what one review that said, you know, I kind of like this part of Zeke's book better than Michael Lewis's book. And then just that, you know, just somebody would do it, just to have like a hot take. Um, and then I could seize on that and put it on the cover of my second book. Um so like the the reception has been um just like way better than I expected, and I just I get a kick out of seeing it at like at the airport, at the bookstore. Um I told I I told my wife uh we were taking the subway to Manhattan, and I um she was asking me how I felt about how things were going, and I said it would be really cool. The one thing I really want is to see somebody reading my book on the subway. And then the subway doors opened, and a friend of mine from high school who I had not seen in more than a decade walked in through the doors reading the book uh on his phone, so it was not a hardcover, but he showed me. Um, so that was pretty sweet. So um so yes, I have not felt overshadowed by the Michael Lewis book in the even not nearly as much as I had expected.

SPEAKER_00 6:54

Congratulations, mate. What an incredible moment to experience that.

SPEAKER_01 6:58

Oh thank you. I mean, I just feel really happy that people are enjoying the book, and I feel like I really tried to do whatever when I was thinking about where to go in this investigation. I tried to think if I was reading this book, what would I want the author to do? It's sort of like a weird choose your own adventure. Yeah. And I was like, yeah, you know, if when I got to because you face these choices, there's times when you in a book, you could just sometimes you could just write a chapter summarizing things that other people had written. You don't need to go see it for yourself necessarily, but for me, I feel like I do gain something by investigating things myself. And I just want to see things with my own eyes, and I feel like I notice things that in a different way than other people do. So, for example, there's a chapter about this particular cryptocurrency mania in the Philippines. Uh this game called Axie Infinity that became like a national craze, and people were quitting their jobs to try and earn money playing with these this game all day. It's a little like uh like a knockoff Pokemon, but people really thought they could earn a living playing this game on their phone and winning crypto coins. And so I, you know, I had to see it for myself. It's just too crazy to believe. And uh because I it's my book, I'm the boss, I I went to the Philippines and worked with, I hired a local reporter who named Gil Ramos, who is really amazing, and she helped me get to the bottom of this and find like patient zero of this crazy bubble. Um and yeah, and because I thought, you know what? The the reader doesn't just want to hear, like, oh, this happened. They want to go there and like I'm the I'm their representative going to check all these things out.

SPEAKER_00 9:04

Um and most of the humorous anecdotes, apart from your description of all the colourful characters that just decorate the crypto world, is your interactions with them and the scenarios that you find yourself in because you go to the place.

SPEAKER_01 9:22

Yeah, I mean, I had initially thought that crypto would not be a good thing for me to investigate. I felt like okay, so many of these coins are just transparently silly. And like I'm like a veteran fraud investigator. That's my thing at uh at Bloomberg, where I have my day job. I specialize in investigating shady things in the world of finance. And so it crypto would have seemed like a natural fit, but I felt like these coins, so many of them, it was just like some kind of annoying guy being like, buy my coin, it's gonna go up and up and up to the moon. And then it would. And I just I didn't see what I would bring to the table there as an investigative journalist. But then, like you said, once I threw myself into it and I started meeting these people, I just found them to be really amusing characters. And I was having a great time talking to them, and and I realized that in even though crypto, I do think it largely proved to be a silly thing, with like some exceptions, I realized this was like a silly moment in history, and I had this cool opportunity to have the latitude to capture it how I saw fit. And so I really wanted to meet all the top people and see them in action, like on their on their yachts, or totally man at their office, or yeah.

SPEAKER_00 11:05

I mean, you you you get I I got the sense from the book that you really captured between the lines the mania, which was crypto. Um and so, yeah, to your point of sort of capturing this weird moment in history, like that's so cool. It's amazing that you got to do it and it's been done well.

SPEAKER_01 11:30

Well, thank you. I'm I'm now kind of coming down from it, and I'm feeling um a bit sad because I'm thinking where will I find another cast of characters like this? Like what um and I'm sure something else will come along, but right now I'm just thinking, wow, the crypto bubble was just like I was dead wrong that it was bad to investigate. It was like the best thing to investigate that I ever came across. And I can't help but think about the chapters that I didn't write, the frauds that I came close to but did not expose. And there were just so many the characters who I never met who are now in jail or and not ready to talk to me. Um and like I'm proud of how the book came out, but I I I kind of wish I had like another year of crypto bubble to to keep working on it.

SPEAKER_00 12:29

Well, um maybe it's worthwhile introducing maybe uh the the Italian guy. Um don't tell me, I got it here. They've assigned me. Like just as maybe an archetypal example of the weirdness at the core of crypto.

SPEAKER_01 12:52

Sure. So my first crypto assignment at work from the editor of Bloomberry Business Week, Joel Weber, he came by my desk and he said, Have you ever thought about stable coins? And I didn't know that much about crypto. I looked into this a little bit, but the biggest stable coin is the is a company called Tether. And Tether, basically all the coins are supposed to go up and up and up, except for Tether, which is supposed to stay at $1, and each Tether is worth a dollar because it's backed by real money in the bank. And in theory, you should be able to go trade in your Tether tokens for cash, you know, real US dollars. And when I started looking into it, Tether had gotten so big that it had something like 50 billion tokens outstanding, which meant that this company was supposed to have 50 billion dollars in the bank somewhere. And that's a lot of money, um, even though, yeah, like it would make it one of the biggest banks in the US if it was a bank. And so as someone from used to investigating traditional financial companies, you would expect a certain level of professionalism from a company like that, which held so much money. And as I just like a quick Google search on Tether revealed that so many red flags. I write in the book that Tether was like quilted out of red flags. And one of the red flags is that the top two executives at the company were almost never seen in public. They never gave it, they still have yet to give. Well, one of them gave me an interview for the book, but uh they never give interviews. And I learned that the the real boss at Tether was this guy, Giancarlo Di Vicini. And he had a bio on Tether's website that said um he'd run a successful electronics business. And but when I started looking into him, he just had like one of the most unusual careers I've ever come across. You one of the only pictures of him that I found was from a photography show in Milan from about 2014, and he had posed for some photos at that time, and the photo showed uh I don't uh a man staring in the mirror with half his face covered in shaving cream, like he'd only shaved half his face, and he was about to shave the other half, and he's sort of staring at himself in the mirror. And there was a little essay posted with the photo, and it the photo showed the theme of the show is people was turning points, and his turning point had come when he was 25 years old. He had been a plastic surgeon in Milan, and then he just had this awakening, and he wrote that he'd realized his whole career was a sham and he just couldn't do another boob job, and he ran away to China where he got into the electronics business. So, and then as I looked into his electronics career, he'd been charged with counterfeiting at one point. He denied wrongdoing, but he seemed like he was a really low-end operator who was like buying, you know, discarded RAM chips and sorting them to find the good ones, or selling like his own brand of laptops in Italy. And his Italian financial records revealed that his companies did not appear to be nearly as successful as his official bio had claimed. But this is the guy who's running Tether, which is the company at the center of this whole crypto bubble. And this is just like one of the red flags. So I found all this out early on, and I thought, you know, this is the sort of thing I could dig into. And the and the big question was where are they keeping this money? Does this money really exist? You know, do they really have $50 billion? And the more you learned about these guys, the more you thought, hmm, are we sure they really have the $50 billion? They seem like uh um questionable characters. Um and another great one was the co-founder of Tether, not who plays no role in its operations now, um a guy named Brock Pierce, who is a child actor from The Mighty Ducks. He misses a penalty shot right at the beginning and like a flashback. Um and then when I went to go look for the money, the only bank that I could find that would admit to holding any money on Tether's behalf was this bank called Dell Tech in the Bahamas. And it was run by a wealthy Frenchman who had created the cartoon, his his wealth came from creating the cartoon Inspector Gadget. And I was just having so much fun looking into all these characters that I realized that's when I realized like this crypto world is clown world underexplored. Yeah, yeah. But I mean it that's that was the great contrast was you had these crazy characters, but then right around that time I was starting to look into them, I learned that Janet Yellen, the Treasury Sector Secretary of the United States, had called a meeting of all the top financial regulators. They'd all trooped over to the Treasury Department in Washington, D.C., you know, a big gothic building. And they had been talking about the mighty duck sky, the plastic surgeon's coin, and they were like, do it, does it really have the $50 billion? What'll happen if it if it fails? Could it crash the crypto, the whole crypto market? Um so I love this contrast between big amounts of money, big potential consequences, and characters with like very colorful, the most colorful resumes I'd ever come across.

SPEAKER_00 19:45

An incredible moment in the chapter on Devassini is um this blog post that he writes in admiration of Bernie Madoff.

SPEAKER_01 19:56

Oh I I love that um I was at a very fancy Starbucks in Milan, and I had been to the plastic surgery clinic, and I had been to places where Giancarlo, his former residence is, I've left him notes, but I felt like I wasn't really finding anything. But then I just uh Google is a powerful investigative tool. Top a secret, let you in on a secret of the investigative reporter game here. Um yeah, you can't just look at page one. You know, this is why you know I'm a serious investigative reporter. I'll go to page three, page seven. Um and I think because I was in Italy, Google showed me I because I've I've clearly had I'd been through all the pages before, but Google started show was showing me different things. I think because I was accessing Google from Italy, it was showing me more Italian sources, and um I came across there was a blog for a political party called the Five Star Movement that Di Vicini liked. And under his real name, he'd been writing in the comments um about his support for the Five Star Movement, and he had linked to his personal blog. And I went to this blog, and it was just like a treasure trove of funny writing because I mean he kind of fancied himself a writer, and he shared his he was going through another turning point in his life. He'd he'd gotten divorced, his um CD production factory had burned in a fire, and he seemed to be like kind of at loose ends with his life. And yeah, he hated central banks, he had misogynistic attitudes. Toward women, and he was writing about all this stuff. And when Bernie Madoff's fraud was exposed, he wrote this uh this post about it. And I wouldn't go so far as to say, you know, he's endorsing Bernie Madoff, but I felt like he was saying, you know, he's he compares uh the regulators, I think, to you know, Homer Simpson at his nuclear plant, you know, just pressing buttons and ignoring what's going on. And he's he's sort of marveling at the size of the fraud and wondering how um how Bertie Madoff would have gotten away with it. And then he's like, well, maybe just everybody is so stupid. That was another theme of the blog was that everybody was really stupid except for Giancarlo. And having spent a long time looking into him by this point, when I came across that blog, um, and he hadn't been willing to speak with me, it was just this amazing window into his mind and the way he he saw the world. But sadly, um there were some comments on the political blog in 2012 or so, he started making comments about Bitcoin, and then he stopped blogging because he had found a new purpose in life, which was cryptocurrency.

SPEAKER_00 23:21

And Tether now still is yet to crash. This was your this was your ticket into the into the crypto world, right? You were gonna be the journalist that oversaw the downfall, and everything has collapsed around it except for uh tether still standing there. So some of the details on Tether that are just unbelievable, like billions and billions of dollars of profit and so forth.

SPEAKER_01 23:47

Yeah, I mean things really did not play out how I thought at all at all when I went into this. I in my years of investigating, what I've found in general is that you are not always going to completely nail the fraud. A lot of times, the best you can do is write a story that points out some red flags, and then people take it and run with it. And if you go back and look at even like the stories that brought down Enron, they were not um like, hey, this energy trading company is a huge fraud. They're more just like, hey, some of their off-balance sheet entities appear suspicious. And so based on what I had seen, it was it wasn't much long into my digging on Tether that I felt like I could I could write about enough red flags that it would give people pause about about dealing with this company. And it's not like my goal to my goal is just to write the truth as best as I know it, and then people can do what they may with that information. And so, but I felt like I'd exposed Tether certainly more than I'd exposed other companies that I'd written about in the past. And the crypto world just totally shrugged it off. Because I I published midway through writing the book, or actually very early on in the process, I published a cover story in Business Week about Tether, which pointed out about these crazy characters. I did not have the diary, sadly, at that point. Um, but I also pointed out I obtained some documents about Tether's financial situation from an anonymous source, and they showed that Tether had Um made invested billions of dollars in loans to Chinese companies. And it just seemed like there was enough there that usually if I find one thing, there's probably a lot of other things that I did not find. And it just seemed like there was enough there that if I had to bet like which crypto company will survive, it would not have been Tether. But like you said, now so many crypto companies have collapsed. So many of the people that so many of the most prominent people in the industry are now bankrupt, being sued for fraud, in jail, you know, not just Sam Bankman Fried. Um but Tether's thriving, and they still have not. There's this great community of people who are it's become like its own little world of investigators who are suspicious of Tether. And these people are still not satisfied. They still think that Tether, they still post about how Tether's a fraud, but um, and they still say, hey, Tether has not produced the financial records that it's been promising for years. Because it's this long-running thing where Tether always says, oh yes, very soon we will give you audited financial reports and put the haters uh in their place. But they they have they've been saying that for maybe six or seven years now, and they haven't done it. Um but they do put out uh a lesser financial statement that is signed off on by a real accounting firm. And if those numbers are correct, Tether is now this crazy company run by the ex-plastic surgeon, is now one of the most profitable companies in the entire world. It makes more than a billion dollars a quarter. Insane. Jean-Carlo is a billionaire, and so are several other people associated with Tether. It makes more money than Nike. Uh and it so in what happened, it all depends on uh benchmark interest rates. Interest rates are very boring, but it turns out very, very important to uh a lot of things in the business world. And so, like a lot of this crypto bubble was driven by interest rates being at zero and it being very so people were just trying to invest in anything. There's just so much money sloshing around that all these crypto startups could get big funding from venture capitalists, and anything that had the potential of making money in the future was very valuable now because uh interest rates were so low. But now interest rates have but it was bad for Tether when interest rates were low, because let's say your business is Tether's basically just sitting on a giant pile of money, and it might it sounds pretty cool that you could sit on fifty billion dollars, but if interest rates are zero, it's not that great to sit on fifty billion dollars. You might actually incur costs trying to keep the fifty billion dollars safe. And that's what drove Tether to try to eke out a little extra money by investing in things like Chinese commercial paper, and that um it seemed to me at the time that they were putting the savings at risk with these weird investments and making loans to other crypto companies. But now you can invest in US treasuries and earn 5%. And that's been really bad for the crypto world as a whole because investors are pulling back from risky assets and investing more in safe things, and it's more costly for companies to borrow, so they can't uh these really speculative companies can't fund themselves cheaply. But for Tether, it's awesome because now you can take your pile, which has grown to $80 billion, you can invest it in US treasuries, and you can earn $4 billion a year. And it's like a tiny operation, very little staff, so that's practically pure profit. So even if Tether had financial problems before, it could, in theory, earn its way out of any hole now. So the way that I mean, spoiler alert, the way the book ends is not where I thought it would. And Tether kind of comes out as the the winners of this crypto boom and bust.

SPEAKER_00 30:21

I was just gonna say, uh, what an incredible irony that Tether, this cryptocurrency, uh, is making its wealth off the very system that it is uh purposed to replace.

SPEAKER_01 30:35

Yes, and also kind of funny that tether, I mean tether is the most popular cryptocurrency in terms of daily transactions, and it's the one that's like barely a cryptocurrency at all. You know, it's just like a dollar-based token. It's sort of like PayPal, you know?

SPEAKER_00 30:55

Alright, so hilarious anecdote with Devasini, obviously, and Tether. Um, but you know, the book is about between the lines of the cryptomania, because between the lines, uh crypto has enabled a lot of horrific stuff. So this is just a couple of things I was writing down as I was listening to the book. Um one in one year, Bitcoin mining consumed as much energy as the entire country of Argentina. 85% of that energy came from coal and natural gas. And up until 2021, presumably the number is much higher now, three point two billion dollars were stolen. Straight up stolen in cryptocurrencies. Um and this is just the light stuff because we're not even uh taking into account the money laundering and the organized crime that crypto has enabled. So can you just give us a sense for the damage crypto is responsible for?

SPEAKER_01 31:57

So I think the the biggest thing is just it's a zero-sum game. So for everyone who made a billion dollars off cryptocurrency, there are a lot of people who lost their savings. And it's it's not a huge focus of the book because um I personally there's only so much I can read about um someone who thought that you know Dogecoin was I mean, I talked with uh so many people who got sucked in by like one coin or another. They were having fun trading Dogecoin, they ended up investing you know fifty thousand or a hundred thousand dollars, money that they had real plans for for retirement or to buy a house, only to see it stolen by some guy who yeah. Um I mean it's not just SBF. There was Celsius, Voyager, um so many of these crypto companies were uh went bust and and lost everybody's money. So that's like the biggest thing. But then when I'm investigating Tether, I my attention eventually turned from trying to find the money, which proved very difficult, to figuring out why people kept using Tether and like what would make someone like setting aside there's this big question, like, is tether a fraud? And I did not find like proof that it was, uh, but I also found a lot of reasons to be suspicious of Tether. And Tether doesn't pay interest, right? So if you are holding a lot of tethers, you're placing a lot of trust in this tether company, and they really haven't done much to deserve that trust. So like I'm wondering why is everyone so eager to use these tether coins? And one I kept hearing rumors or not little I kept finding little nuggets that suggested that a lot of people were using it for bad purposes. And just to give you one example, a human rights group had done an investigation that the people in Russia were using Tether to essentially transfer money out of the country and that they could get um like after buying tether, they could be delivered, they could send it to this exchange and they could get cash delivered to them in the UK. Um and like to be clear, Tether, the company, the Italian plastic surgeon, he just sort of created this coin, and then once these coins are out there, people can move them around in the crypto world. So he doesn't really know who's using it, and for better or for worse, so the tether company doesn't there's no evidence it has anything to do with like Russian money laundering, but they've created this system that's great for Russian money launderers if they want to use it. And they're they're like, as far as I know, you know, hands off. And and they have this way of saying that uh they they only essentially deal with wholesalers. So they're like, we we know all our customers, we know they're not criminals, we don't deal with criminals because there's only a small group of people that can buy and sell tethers directly from the company. But once those people acquire the tethers, they kind of go out into the world and they can be used for anything. And so like you and I could go buy tethers from on a crypto exchange or just from somebody who has some, and tether the company would have would be none the wiser. Um so I kept hearing these like little nuggets about criminals using it. I saw in a US criminal case against a Russian, a different Russian money launderer, they had some intercepted communications, and he was teaching this criminal about tether, and he was like, it's great. It's like email for money. Everybody does it. You know, get on it. So I wanted to write about this part of it, but I wasn't sure how because I didn't know any Russian money launderers, and travel to Russia seemed ill-advised. Um, but then I got this uh spam text message, which turned out to be like a great clue into illicit use of tether. Um it was uh, you know, it's one of those messages that that we all get, right? That that's just like, hey, David, uh, did you get the milk on your way home? And I I'd been hearing that these related to a crypto scam, and I decided to play along with one of them. So the person who was at the other end of the message told me her name was Vicky Ho, and she sent me some pictures of herself, and that she was an attractive young Asian woman whose face had been heavily face tuned so that she looked kind of like anime-ish. And I I was like, okay, I think if I play along, she'll reveal how this scam works, and I might learn something about illicit uses of tether. But for days, she just wanted to chat. And I'd wake up and she'd be like, Good morning, how are you? Wow, you look you look handsome. Um and she would send me uh no, I'm in I was I'm in I live in Brooklyn, and she made some mistakes that made her like clearly not the best scammer because I mean she said that she was in New York, but then she would send me all these pictures, and I could see out the window in the pictures, and she's not in New York. And she would talk to me about the weather, and she would be wrong. So, like, she definitely should have picked a different city, amateur mistake. Um, but she started in addition to like wanting to be my friend, she also talked a lot about her great lifestyle. She showed me pictures of her Ferrari, pictures of her golfing. She said she loved to travel, and she said like she had a rich uncle who was great at trading. And over a couple days, she revealed what she was really after, which was that she started saying, Hey, I've got this great trading system, and it's how I made all this money. And I was like, Okay, cool, the scam's about to start. But I practically had to beg her to show me. I finally I was like, Vicky, I really want a Tesla. It costs $142,000. Like, can you help me? And then she was like, okay. And she so she had me download this app, and she said that if I sent, she was like, step one, you need to sign up for like Coinbase or some sort of regular crypto app. And then this is when I hit the pay dirt. She was like, buy some tethers, it's a great coin, but it's always worth a dollar, so don't worry. And then once you get them on, because her app could not accept US dollars because she is a weird scammer, but she she was like, you need to go on a regular app like Coinbase or crypto.com, use your credit card to buy some tethers there, and then zap them over to me in Crypto World. And so I did that. And because the way that Tether or any cryptocurrency works is Vicky gave me like a 32-character address, which is just like a string of random numbers and letters. And she's like, this is the deposit address for my special app. And so from Coinbase or what crypto.com, I can't remember which one I used, I was able to zap the tethers over to Vicky. And this is where crypto. Some crypto people have criticized this. Like, if you if you wait a crypto guy here, he'd say, listen, you scams predate crypto. This scam doesn't have anything to do with crypto. There's like other, you know, there have been romance scams like this since the beginning of of the internet or even before that, which is true. But crypto has made it so much easier. Because, like, if I had to send Vicky money through uh a bank, the bank would flag these transactions as suspicious if she's overseas. Um, so Vicky would have had to recruit like a money mule in the US who would accept the transactions in their bank account, and that person would eventually get caught and face like criminal liability. With Tether, I could just zap him over.

SPEAKER_00 41:09

This is the key. The key point, like the financial opacity, it enables the scale of all of this cesspot of immorality anyway, which is gonna go on irregardless of crypto, but it scales it and leverages it. Like that has to be the point.

SPEAKER_01 41:30

Yes, and I mean and this is the really like most of the book is kind of is funny, but this is like a very dark chapter because I find out the truth about scams like these, which are called they're called pig butchering scams. And it it it's a phrase that originated in China, and it the idea is that they fatten up the victim with a fake romance, and they'll even if you send in money to this app, they'll even they'll show you, it looks like a regular crypto trading app, and it'll show you that you're making money, and they'll even let you take some out. So you really think people get really convinced, but they're the whole time they're sizing you up. And they might say, Okay, Zeke said he wanted a Tesla. He seemed to think it was realistic he might get there, so he's maybe good for $150,000. Yeah. So they'll do what it takes to get you to send in that much money, and then they sl then comes the slaughter where they just steal it and then you never hear from them again, and cut and all you have left is this crypto address that doesn't lead anywhere.

SPEAKER_00 42:38

We we uh we had on um Matthew Friedman a few episodes ago, who runs the Mekong Society, but he's doing so much in the private sector. Um uh to work with businesses to stop human trafficking and to reduce the indebted save slavery as much as possible. And he uh identified pig butchering on the podcast as being the like most depraved of all the scams he sees at the moment, and is convinced it wouldn't be possible without crypto at the scale it is.

SPEAKER_01 43:12

Well, yes, and that is because as I found out, people like Vicky are often victims of human trafficking themselves. And the person sending that message, I didn't figure out who Vicky was exactly, but the person sending that message was likely a young man in camp who'd been trapped in Cambodia. And it this is gonna sound like a well, if you've already heard a credible source, maybe it won't sound like a conspiracy theory. But when I first heard it, it was too crazy to believe. But it was like there are entire office towers with floor after floor of people, like hundreds of people, who they've been like a gambling company will post a job ad, and they'll say, like, come to my casino in Cambodia. And working customer service, you're gonna make a really great salary. And young people from around Southeast Asia will come there. Once they get there, the employer will have like armed guards and they'll be like, surprise, now you're a scammer. You're never leaving this building, you're sending messages around the clock. If you don't scam enough people, we will beat you, we'll shock you with like tasers, and you can't leave. You sleep here now, you're gonna have to pay a ransom if you ever want to go. And if you do poorly, like we'll sell you to another one of these scam compounds. And they're literally, according to the United Nations, there might be as many as 200,000 people who've been trafficked for these it's pig butchering scams, it's like gambling sites. Yeah, it's right. It's worse than I even knew when I wrote the book.

SPEAKER_00 44:58

It's out of the dystopian novel. Like that scene you just described is out of a dystopian novel.

SPEAKER_01 45:06

No, it I I couldn't have even imagined it.

SPEAKER_00 45:11

And so And it's happening, it's real, it's insane.

SPEAKER_01 45:15

Yes. I mean I I was uh the the problem first got really big in in Cambodia, and I went there because I just I felt like I needed to see this for myself and know for sure that this was really happening. And I met up with um people, I went to uh Ho Chi Minh City and I met up with um a Vietnamese man who'd escaped from one of the most notorious ones of these compounds, and I mean the stories he told me were unbelievable. He and he had like visible wounds from his time as a at this compound called Chinatown. And I went to Chinatown, I teamed up with two investigative reporters in Cambodia who like they've been exposing this problem for years, writing about it in in their newspaper, Mek Dorat and Danielle Keaton Olson. They've been doing amazing work, and instead of like you know, winning the Pulitzer and like the cops come in and shut down these criminals, in Cambodia, the government was like covering up the problem. They would do like some superficial raids, but then they'd just say the police would come check on some of these compounds, and then sometimes they would even um arrest the workers for illegal immigration. Um and they would often say they saw no evidence of forced labor. Even when you can go on like TikTok, you can watch TikToks that the workers are posting from these compounds where they're getting tortured. Or even uh I mean Durah showed me once where uh workers are committing suicide, like jumping off the off the roof of these buildings. Uh it's like truly horrific, it's horrible. And like I got to Chinatown to see, which is it's in Canookville in Western Cambodia. It's uh Canookville is like a used to be kind of a sleepy beach town where you'd go, like backpackers would go. And then a few years ago, it got transformed by Chinese investment. And there was this huge boom in in casinos uh funded by Chinese. The population like tripled and it became like a majority Chinese city, and it now has like I don't know, like a hundred big casinos in it or something. It's like a Cambodia and Las Vegas. And it the the casinos depended on this kind of semi-legal loophole where they could, I mean, there were Chinese tourists who would really come to the casinos, but then it they also would live stream casino games to China. So like the the dealer would be in Cambodia, but the players in China. Um and the China the Cambodian government shut shut this down. Like, I don't know if it was ever 100% legal, but it became more illegal. Then and COVID hit, so there was no travel for tourism. So this casino town that like sprung up overnight became like a ghost town, and you were left with a lot of people who a lot of empty buildings that were built for like casinos that were now no longer really in operation or like kind of dead. And then you had like there was already like an organized crime element in town from the casino development who were familiar with doing weird stuff on the internet, and it shifted into this more outright scamming, and it became like a hub for pig butchering. So Chinatown is a development of I'm trying I'm gonna say like at least like maybe four dozen tall office buildings that were all filled with these scam compounds. And it was crazy, it was crazy to see a lot of the buildings were built, like some of these were built to be um they were built to be like nice buildings. A lot of the rooms had balconies, and you could see that metal bars had been welded on the balconies to turn them into like cages so that the workers couldn't jump or try to escape. And they still would try. Like I've seen videos, I've talked to people who would spend time there. By the time I got there, it had been largely closed. But people who had been there during the peak would say, like, you could hear the workers screaming while you like drove down the street. What the fuck? Um I mean it was very I and like this particular area had become like a national embarrassment. So it was one of the ones that there was a big raid on it, and a lot of the workers were dispersed to compounds in other parts of Cambodia or in other countries. Um but I was surprised to see when I got there that it seemed to be kind of starting up again. And at night there were lights on in a lot of these buildings, and Durat and Danielle, who were the real experts on this, were like, we're still hearing reports of new scam activity there. Um and it didn't this like you know, doesn't prove anything, but I was just struck by when I got there. Um I mean, another weird thing was all the a lot of these business, these buildings had retail on the ground floor. And if there were restaurants, a lot of them had signs in Chinese because the people, the gangsters are like the people who are free to come and go are Chinese. So like the businesses cater to the Chinese. And you could even see in the restaurants that they would have um bars like in the middle of the restaurant, because they're sort of like office parks with um like uh the workers might come in from the back, and there were bars so that they couldn't go out the front. Like what you're trapped inside this office park. And so if you came in from the front like me, you couldn't go to the back either. Like it separates the restaurant into two halves. But one of these buildings had right at the entrance, there were it was closed, but there was a currency exchange, and it was advertising right on the billboard USDT, which is the symbol for tether. And like I traveled the world, yeah. I traveled the world investigating crypto. I and the the continue nearly everywhere I went, I would find that nobody liked crypto, nobody used it for anything. Even at crypto conferences, people didn't, you couldn't buy a hot dog with crypto. They'd always be like, ah, the crypto machine's broken. You know, so then I get to I get to the human trafficking compound, and it's like, yes, this is please uh bring us your tether. You can trade them here for cash. And um anyway, it was it was truly it was truly bizarre, and I'm really happy that this whole issue has be getting a lot more attention internationally. It's been raised at the United Nations, and I think that more international pressure is coming on to Cambodia to to stop these scam compounds and free some of these people.

SPEAKER_00 53:11

But Zeke, how do you explain how something like that at the scale, 48 towers you suggested at one stage? How do you explain how um a scamming operation like that can scale to the heights it does in 2020 plus, with the ubiquitousness of phones, technology, people being able to communicate to each other? Like it it just feels like there is a missing piece of the puzzle. How could it be so that such a horrific scam where people are taken, so they are slaves and they are beaten to scam other people? How is it enabled?

SPEAKER_01 53:51

So I mean, if you're I do think that it would be much more difficult for these people to move these big sums of money through the traditional banking system, and that their ability to use crypto really makes it a lot easier for them to rip off like some retired lady in Iowa and have her send hundreds of thousands of dollars over to you know a Chinese gangster's account in in Cambodia. And I also think I mean the internet makes it a lot easier for them to troll for victims, and they can use Google Translate to target people in whatever country. You'd be amazed. I'd see I I spoke with someone who lost like $500,000, something like that, and I had them send me the transcript of their conversation with the scammer, and it was very stilted. It was like the scammer, I probably had used like an online translation software, but this person was so desperate for a human connection they're willing to go along with it. And it I mean the real scary thing is, as far as I know, these people aren't using AI yet. Um but in the future they might be able to do this, automate this. Maybe they won't even um need so many low-paid workers to or trafficked workers to send these messages.

SPEAKER_00 55:23

Um to be able to read Chris Voss books and human communication books, and the AI will be able to actually employ like genuine psychological manipulation tactics on you.

SPEAKER_01 55:39

I mean, it's like a numbers game, I think. So even if they're the AI isn't able to do like a great job, it could um contact many more people and find the ones who are just like ready to send their money along. And I think crypto also helped by facilitating, like if somebody called you and said, Hey, I've got this. When when when Vicky told me, like, hey, I have this crypto trading system and you could make lots of money. I mean, I didn't I knew it was a scam, I didn't believe her, but it's at least kind of plausible because we've been fed so many stories about people who got rich on crypto. You know, it's like a to run a scam, you need a believable story or like a semi-believable story. And crypto is just was the for a few years has been like the best one. Right. They're just like, hey, it's the future of money. You're you know, it's the next Bitcoin. And we all know like people made a lot of money on crypto. We're all kind of like a little sad we missed out, you know. I think it really helped this imaginary Vicky's odds.

SPEAKER_00 56:46

Do you think um Brian Armstrong and Coinbase have an ethical obligation to refund people that lose money when they transfer to Tether? Or an ethical they should have some sort of responsibility for either offering Tether in the first place?

SPEAKER_01 57:07

I mean I it's a good question. Um I mean Coinbase is being uh sued by the Securities and Exchange Commission for offering coins that the gov the US government argues are technically securities. So essentially, there's like the US stock market used to be like a wild west like like the crypto world, and like a hundred years ago we passed laws to require that companies you know disclose financial information and you know not engage in manipulation and things like that, right? Like these are like time-tested laws that really improve the stock market and help the US become like a leader in the world in capital markets. And uh a lot of crypto companies do not follow these rules, and so Coinbase, a lot of the coins that it offers, the US says these coins are not following the rules. They're essentially similar to stocks, but are not following the stock rules, so you shouldn't be selling them to regular people. And I mean, tether could fall into that category where it's kind of similar to a money market fund, but it's not providing the disclosures that a money market fund would. So it's possible that regulators could get coin based on that.

SPEAKER_00 58:41

Um I think that Yeah, forget the regulators. Just do you think they have an ethical duty or responsibility?

SPEAKER_01 58:53

Well Sure, I mean I think that you should be you should do what you can to stop your customers from falling victim to these to these frauds, you know? And I I hope that they are doing a lot to um to warn their customers about this. I found that um I went, I mean, uh at the towards the end of the book, uh Sam Bakeman-Fried is also a main character in the book, the FTX founder. And toward the end of the book, I flew down to the Bahamas just before the cops got there, and I had this long sit-down with Sam in his uh apartment. But one of the things we talked about was these pig butchering scams, because some of the proceeds, you could tell that some of the money the scammers made was going to FTX, Sam's exchange, and also some of the FTX's customers were falling victim to these scams and sending their money to you know Chinese gangsters in Cambodia or whatever. And I asked Sam about this, and I mean to be fair to Sam, he was kind of distracted by um his own legal problems um and the fact that he was like probably about to get arrested and probably gonna go to jail for like his most of his adult life. So gonna cut him some slack here. But I said, uh, like what do you think about this? Like you're this is something that in in it's not like FTX is like actively involved in this, but you might be facilitating some of it, or you are facilitating some of this activity. And he was just like, hmm, yeah, that's pretty bad. Yeah. And I'm like, I think if you're all right, this is like a better answer to your question, but I think that if you're Coinbase, if you're FTX, if you're tether, you have a responsibility to police how your coin, how your company is is used. And so I think, I mean, I found this again and again in crypto. The people who create these crypto companies, like the guys who invented Axie Infinity, which became like the mania in the Philippines, they may have great ideas. They may have, I don't want to say they all have good intentions, but some of them might. But then they totally disclaim responsibility for how this their inventions are being used in the real world. Like, and I think you you need to investigate that. It's your job to know, and it's your job to try and ensure that whatever you're doing has a positive impact on the world, and that you're not, you know, facilitating scams and human trafficking.

SPEAKER_00 1:01:48

How much of that though comes back to the uh libertarian ethos at the core of crypto and most of the people that are super attracted to it? This kind of idea that it's each to their own. If you can't, you know, be responsible, you're not responsible for other people's actions, basically.

SPEAKER_01 1:02:09

I mean, I think that that's a big part of it, and they're there's a big anti-government ethos too, and they think that like regulations are bad, they're stopping people from doing uh things that would actually be good economically. And I I think the like the subtext of number go up is like no, we need these regulations. They may be kind of annoying, but they've been created over time to try to stop people from getting ripped off and to try to stop the financial system, make it harder for criminals to hide their money using the financial system.

SPEAKER_00 1:02:52

Um, so your career as being financial fraud. Given your expertise or your experience, how do you sort of think about the current state of affairs?

SPEAKER_01 1:03:08

I mean, fraud is you're never gonna there's always another fraud. There's always another person who wants to make a quick buck. Um I think in the for a few years, like I was saying, the crypto story was enabled a huge amount of fraud. It was like a golden age for fraud. And now I think the bubbles burst. I think people are just gonna be more naturally suspicious if they're pitched some sort of hot new coin, and that it may not be fraud, might be on the downswing now, especially in in the crypto world. But um, you know, the it's gonna have its day, and there's always gonna be um uh, you know, people are desperate to get on the in on the next big thing. Everybody wants to get rich, and every so often somebody comes along who's ready to like fill that demand and pitch some shady new investment. Um but at the moment I'm like I'm feeling a bit um uh I'm feeling a bit sad that the the I'm wondering where I'm gonna find another collection of crazy scammers like I did for in in the cryptoland.

SPEAKER_00 1:04:32

Yeah, maybe you are a hostage to fortune. Um who knows what's gonna be around the corner, you know. I I think you did a really, really uh good job at explaining how pig butchering, this horrific scam, is enabled by the money laundering, the financial secrecy aspect of tether. But this is this is like a driving theme on this podcast. Nick Shaq's and Jim Henry. Um a lot of people have built careers around trying to expose um tax avoidance, the tools of the offshore accountant, etc. Um, so the cancer nature of financial opacity is strong with this audience. So I just want to double down on it with you one more time. You've explained its role in pig butchering. Talk a little bit more about from your investigations the role crypto plays in money laundering, drug trafficking, and the scaling of these criminal organizations.

SPEAKER_01 1:05:32

So it's it's hard to say for sure, like just how widespread it is, but I think that the crypto world has been fairly successful at selling this narrative that crypto is not in fact good for crime and that it can be traced because of um because all the transactions happen on the blockchain. So like if If I have my wallet with my 32-digit address of random letters and numbers, and I send money to your 32-digit address of random letters and numbers, even if no names are associated with that, the transaction is like recorded there forever. And so if one day someone can figure out whose wallet is whose, they can like unpack a lot of these transactions. And criminals do get caught that way. But I think that just um I think it's quite logical to think that most the big cases, like when someone's if you if you hack a crypto exchange and you steal a billion dollars, like the whole crypto world will try and catch you. But there was just a case in New York I was reading about today where dudes were basically exchanging bags of cash on street corners for Bitcoin. And the US alleged it was like some Indian guys from Queens. And the US caught like one person and flipped them, and then had that person go make some undercover exchanges. And this guy, there's like one dude alone, had exchanged like 10 or 15 million dollars of cash for Bitcoin with the FBI watching. And so they just like busted this group. And I just think there's a lot more guys like that than there are ones who are getting busted. And there was another one recently where a lot of times I get clues when the US will sanction people and they'll announce, like, hey, these guys, we've caught these Chinese fentanyl traffickers. We can't arrest them because they're in China, but they're now sanctioned, so that means like all their money is frozen, and we're gonna seize it. And these days, a lot of times, on the list of assets that are being sanctioned, they'll say, and we're sanctioning these eight cryptocurrency addresses, and then you can go in and look at those addresses and see that they're handling big volumes of tether. Um so it seems clear that like word is getting out about the usefulness of cryptocurrency among these criminal groups. And I honestly think that for the same reason a lot of people hesitate to use crypto. I think a lot of criminals also might be kind of like, uh-oh, it's complicated. Well, I lose my money to a scam. Like, how do I do this? It seems so hard. And I think that it's actually maybe not reached its full potential for among criminal groups, and it it could uh it could become more dangerous as more and more people learn uh how to use it. Um so it's something that I want to investigate more. Um, it it also just came up with uh the US sanctioned some people involved with Hamas and among the assets that they had been using were some cryptocurrency wallets that had moved Tether. But it's very hard to know whether that's become like a main uh yeah. I I it's I don't know if that if that's just like you know, another option they're giving for people to donate to Hamas and it's not actually collecting a lot of money, or if it's become like a major way for them to move money is something that I'd like to look into more, but it's getting kind of out of my area of expertise.

SPEAKER_00 1:09:43

It is so damning. How did the pro-crypto community respond to this mountain of evidence that their cryptocurrencies are being used to facilitate crime?

SPEAKER_01 1:09:57

I mean, they like to say don't a lot of criminals use banks. And like, yes, that's true. Um HSBC But that's not a like that's a trick of language.

SPEAKER_00 1:10:09

That's not actually a response, you know.

SPEAKER_01 1:10:12

Yeah. And I think like fighting money laundering and criminal networks, it's not, it's a you'll never win the battle, and it's the companies have a responsibility to try to prevent these criminals from from using their coins or whatever. And it that's where the crypto people really like to they sort of say like crypto is different. Like these coins are just moving around on the blockchain, and like we it's not really our problem. And if we get like a really specific request from law enforcement, we will comply with it. Like if law enforcement figures out that like this wallet is Hamas, we will you know not transact with that wallet anymore. But absent just so much more goes on than the authorities are gonna catch on to. And they've created this system where people where you know uh I mean this this was the intercepted message I mentioned before. It was like a Russian money launderer who was paying for like a stolen shipment of Venezuelan oil or something like that. And that guy can like zap that money, the Russian guy can zap the money to the Venezuelan guy, and no one will be will be the wiser.

SPEAKER_00 1:11:36

Yeah, totally.

SPEAKER_01 1:11:37

Um and I probably the most common crime it's enabling would just be tax evasion, you know? And I think I think the authorities are it takes them a long time to catch up to any sort of crime, especially something that uses new technology. And I think we're gonna be hearing more and more about the about this for the I think the authorities are gonna be bringing cases from this last crypto boom for like another until the Statue of Limitations runs out. You know, we'll be hearing about it for another five or ten years.

SPEAKER_00 1:12:11

Do you think there'll ever be a full accounting of all the scams enabled by crypto?

SPEAKER_01 1:12:17

No, I mean I think some people who ran scams will get away with it just because of the huge volume of scams that that happened during this time. I mean, I was just uh, and I don't know if this person committed any any crimes, but I was just researching. Um there was one particular I've been told by my lawyer that the word Ponzi scheme implies criminal intent, and so that I should not use it loosely. Okay. Uh, but I guess I'm not gonna name this person, so it's okay. There was this one Ponzi scheme that got really, really big. It was like a billion-dollar Ponzi scheme, and it it collapsed. It was like a hot topic in crypto for a while, and I just hadn't heard about it for a long time. And the person who ran it was anonymous, you know. As that was a great part about crypto world, yeah. You could run like the it wasn't suspicious, it wasn't viewed as suspicious that you were anonymous. So you could you could run this like giant scheme and just go by like some cartoon character. And I was like, I wonder whatever happened with that one. I never saw any cases. Um and I was looking it up, and yeah, nobody had gotten in trouble, but the anonymous guy who ran it had gotten sued by a business partner, and it was revealed who this guy was in the lawsuit. And it was just like some uh you know, teenager from Connecticut.

SPEAKER_00 1:13:43

No way.

SPEAKER_01 1:13:44

Like a preppy, yeah, just like this preppy kid. You know, like somebody I might have gone to high school. I'm from Boston. Um, so it's just like like some kid that I might have that wouldn't have looked out of place. Um I went to uh you know Cornell University in New York. I was in a fraternity. Like this kid could have been in my fraternity.

SPEAKER_00 1:14:02

Totally.

SPEAKER_01 1:14:02

And he had run uh, as far as I could tell, like this billion-dollar Ponzi scheme. And I'm I'm like, wow, um, that's just amazing. And I wonder, will he um how much did he clear from this? You know, what's he up to right now? Um so maybe I still have stories to do for the next few years looking at at these guys.

SPEAKER_00 1:14:24

Yeah, and then where did he hide whatever wealth he can access one day? Um But Zeke, with all this being said, how collapsed is crypto?

SPEAKER_01 1:14:39

There's so there's a property of like stock schemes or crypto schemes that the coins don't go to zero. Um they're just sort of trading activity really slows down. So all signs are that like interest in crypto is way, way, way down. And coin prices, like that, you go look up some coin and it's probably down like 75-90% from the peak. And if you had a if you if you had to sell a big quantity of any particular coin, used to when crypto was going great, you could go sell like a hundred million dollars of some coin or maybe ten million dollars.

SPEAKER_00 1:15:20

Because the liquidity was out there.

SPEAKER_01 1:15:22

Yeah, now there's no liquidity's dried up, prices are way down, venture capital's dried up, and even like Google Trends shows just like way less consumer interest in crypto. Um, crypto companies are all a lot of them are pivoting to AI. There was uh there was a company that it had made crypto cockfighting NFTs of some sort of like gambling thing, and now it's AI. Um like they've abandoned that. Now they're like doing AI research. So I think it's pretty dead, and I think that it's not gonna come back. I think that we probably will be hearing about some crypto stuff for like a really long time because it's not gonna just all of disappear. But I just I don't think we'll ever see a mania like the one that we just saw. And I just can't imagine the crypto people are like, you know, we've had crypto winter before, and we just are waiting until the next bull run. And I don't know, I don't know. I just like the cats out of the bag. Yeah, like are people really gonna buy back into crypto and be like, because it even it was not only did all the coins collapse, but so many of the most trusted companies in crypto were revealed to be giant frauds. Uh I just don't I don't see the appeal. I think it's gonna have it's lost its appeal. Um, but I hope I've done some small part to show the truth about crypto and that um I hope that because it's not just like there's one bad apple. Like so much of the you know, this whole the whole sack of apples is rotten. There might be like a good apple in there somewhere, but do you really want to like touch all these rotten apples, like these nasty like maggot-filled apples to get to the one good one at the bottom of the sack? Just like don't even go in the sack. That is forget about it, find something else.

SPEAKER_00 1:17:26

Such a good metaphor. And that and that's like the that's the feeling you get from consuming the book. Um between all the hype and stuff, it is actually just rotten to the core. It's it's it's it's tulip mania expressed through Bitcoin.

SPEAKER_01 1:17:43

And I have not I've got no pushback from crypto world. Like I thought I was actually thinking it might be uh um good for the book.

SPEAKER_00 1:17:55

I don't know.

SPEAKER_01 1:17:55

I thought that it it might be that they would help promote the book by like maybe they're they're just trying to stay quiet and hoping it just doesn't get any attention. But I was thinking they might go on Twitter and start saying like angry things about the book. But I've actually gotten um I've gotten some notes privately from like prominent crypto people who are like this is a he's like we because they're not saying anything good about the book publicly either. But it I've heard that crypto people love group chats, and I've gotten uh three or four notes from people who are like, hey, everybody in my group chat is talking about this book and we love it. Um because some these people are smart, they can see the last couple years were a disaster, and even if they let's say something good does come out of crypto, it's gonna have to be very different from the things that I write about.

SPEAKER_00 1:18:44

Is one of them Anthony Pompliano?

SPEAKER_01 1:18:47

Oh, so I I sent him a copy of the book, but I haven't heard back because he's like the most popular crypto podcaster, so I was hoping that he would have me on his show, but I have not had a reaction from him yet.

SPEAKER_00 1:19:01

What about Michael Saylor? You get anything out of him?

SPEAKER_01 1:19:04

No, so Saylor I love because he says like the craziest stuff about Bitcoin ever. Like he was the one who's like, Bitcoin is a flock of cyber hornets who will hack the future and make us rich forever. And I um hack the future. I think he just ignores anything uh negative. Now he he has a fleet of yachts in in Miami, so I had tried to arrange an interview with him, and his people were sort of like um they were like non-committal, and then I was like, if we do the interview, it must be at sea. And then they were like, no. So I did not get to sit down with Michael Saylor.

SPEAKER_00 1:19:50

Um what about I heard in the interview you did, you mentioned um A16Z Andreas and Horowitz. Um I'm I I actually don't know anything except for what I've heard some podcasters say about their involvement with cryptocurrencies. Um, but it sounds like even Tether, they played a pretty significant role in Tether, is that right? Or am I making that?

SPEAKER_01 1:20:14

I actually I I have not heard about their involvement in Tether. I that could just be totally fake news for me. Yeah, I think that they because Tether is actually like an older crypto company that might its founding might predate Andreessen Horowitz's involvement in crypto. Um in this latest bubble, they invested in tons of crypto companies with totally silly business plans, and so absent their seed funding, the bubble might not have been nearly so large. And one thing I thought was very interesting was that you would think so and A16Z had this big crypto fund, they invested it in crypto. Crypto has gone down 75 to 90 percent, like I said. However, there have been some leaks about the fund's performance, and it has been good. So to me, that suggests that they are not, yeah, they're not investing in the same thing that regular people are. They must be getting some sort of special deal. Or I mean, or they dumped their tokens when things were going great before uh before the collapse. And so I'd love to see more, I'd love to dig into that. It would have been a good chapter to the book, and I'd love to know the exact terms of their investments, and because if if they dumped their tokens early, that would suggest they did not really believe in these companies. It would be pretty yeah, and because they're publicly have been like, we love crypto, we love web 3. You know, they've been like some of the really out there boosting it. I remember and I think it gives the whole space a lot of credibility, yeah.

SPEAKER_00 1:22:12

Oh man, I mean, I remember a really big moment where I'd heard all the on Twitter I'd heard Web3 talked about all the time uh in the you know context of NFTs, and I thought, okay, this this is a bit too ridiculous for me. But then Chris Dixon and Naval Ravikant are on Tim Ferris's show. Naval Ravikant, I have huge respect for Tim Ferris, huge respect for, never heard of Chris Dixon. I listened to that show and I thought, oh shit, maybe I'm a sucker in web 2.0 and I gotta get on board with web 3.0 and like was totally wrapped up in it. I didn't do anything about it, of course. But I mean, for sure, they gave it so much legitimacy and authority. You get a guy like Naval Ravikamp behind it, like he's you know, he's daddy to so many people on Twitter.

SPEAKER_01 1:22:56

Yeah, or like the all-in podcast, um, those guys like Chamath, um they were talking up Solana at one point, you know. And uh because look, it's one thing if you just are like dumb and you believe in something that turns out to be a bad investment. I mean it could happen to anyone, but if you're out there like saying it's the future when you know that that's not true and you're selling your token, I mean, at like the extreme, if you're telling if you're telling people buy, buy, buy, while you're secretly dumping, that could even be illegal. Brutal. You know, yeah. But so that's where I think that um no, you have to imagine these guys have great lawyers and were um even though it was the crypto wild west, that they were probably following the rules. But I'd love to investigate how they were able to make money on crypto while crypto collapsed.

SPEAKER_00 1:23:53

No, and you're the man to do it. You've just put our number go up, everyone loves it. And as well, you know, you get a chapter on Shamath. I mean, he's I I I really like him, he's so compelling in the way he talks sometimes, but you know, he he has a record which one must sort of put their nose up as like what's going on here, man? I mean, are you lying to me all the time? Because it it doesn't feel like you're lying to me, but your record kind of looks like you're lying to me all the time.

SPEAKER_01 1:24:25

I mean, he he promoted all these SPAC deals, and the way they were set up, like he made a lot of money no matter what, and if you bought into those SPACs, like you probably lost because it these were like Virg Virgin Galactic, uh Clover Health, um, and he had this great thing for a while where he would just because he was talking about it, the stock would do great. Um that's another case where like I think you have some responsibility because people listen to you, and so yeah, you need to you can't just slap your name on some dumb company.

SPEAKER_00 1:25:01

Man, the the the type of influence that the all-in boys have um um uh created for themselves, it I don't want to sound too hyperbolic, but it could be kind of unprecedented. You talk about those four minds together, who they are in the in their respected communities, and who the demographics of the podcast is that they listen to. It's just authority on authority on authority, and then sometimes me, just some fucking normal guy living in Sweden, I like it smells bad sometimes. And I'm like, is this is everyone out to kind of grift? Where where's the integrity and honesty and um I mean definitely writing this book?

SPEAKER_01 1:25:48

I was like, you need to just write what you really think and that um tell the truth, that's like the most important thing. And even if um it doesn't always reflect that well on on me, you know? Like I opened the book talking about Sam Bankman-Fried, and like so he's turned out to be like one of the biggest con men in history. It would be really cool if I had uh caught him and that I was like the reporter who exposed this fraud. However, I did not. Yeah, I spent lots of time with him, and even though I thought that like crypto was a scam, I had no idea that I was like, okay, Sam, you're running like this crypto casino, that's bad. But I had no idea that he was actually stealing the money out the back of the casino. And so I was like, I gotta be honest about that in the book. Even if I wish I had I had called it, I did not, you know. Yeah.

SPEAKER_00 1:26:47

The the wide review of um your book, or was it of infinite the wide rebook that mention the wide review that mentioned your book uh pointed that out that you were self-effacing in the fact that you had this exclusive with SBF and like wasn't even criticizing FTX necessarily.

SPEAKER_01 1:27:07

No, I like I spent days in their office. I wasn't even supervised half the time. You know, I could have like looked through the trash. Yeah, right, right. I was looking at I was sitting next to SBF, looking, he's reading his emails with me. Like he's he's doing his company slack. I do not this will never happen in my career again, that I get to spend days at like a giant fraud's office. So it like I will I will kick myself for the rest of my life that I did not uh expose this one.

SPEAKER_00 1:27:37

One more question on crypto number go up, and then I'd like to ask you just a few about journalism. Um Are you and Michael Lewis mates?

SPEAKER_01 1:27:49

Um no. So you may have seen he was profiled in the New York Times recently, and he was so I dur while I was reporting, I never met him, um, but I did see him in the Bahamas when I was reporting the book. And I write about this in the book because he was on stage at this FTX conference. It was a conference to celebrate Sam Bankman-Fried and how great FTX was doing. And he went on stage with Sam Bankman-Fried at this conference. And like, first off, that's kind of iffy. Like, I wouldn't appear at a conference promoting a particular company. And then I'm I mean, I'm a Michael Lewis fan. Like, I love the big short. He seems like a really smart guy who knows about scams, who's I've learned a lot from reading his books about how the financial world works. So I was kind of eager to see what did he think about crypto. And then he's on stage with Sam Bankman-Fried, and not only is he like fawning all over Sam and talking about how great he is, but he says, crypto's great. It's not good for crime, and it's better than the traditional financial system. And he says, like, he prefaces this by saying, like, I don't know very much about crypto, but then he says all this other stuff really confidently. And I'm just like, have you looked into this at all? Totally. And I um so Michael Lewis read, I told Michael, I told him ahead of time that I was gonna write about this. Because I had to email him and say, hey, Michael Lewis, like I saw the speech. Um did you I wanted to ask him if he got paid. Um and he said, no, he didn't get paid by Sam to do that speech. And I then wrote about that in the book, and he read that, and then he was interviewed by the New York Times, and the New York Times asked him, and they were like, Michael Lewis, what do you think about this other reporter who wrote about this speech you gave, or this interview you did with Sam Bankman-Fried on stage? And Michael Lewis said that uh I was he like he called me skeevy, which is like creepy in American talk. Uh it's like a fairly strong word.

SPEAKER_00 1:30:15

Skeevy. Um I don't even I've never heard of it.

SPEAKER_01 1:30:17

Yeah, he said I was skeevier than Sam Bankman-Fried. Oh man.

SPEAKER_00 1:30:21

Um that's fighting words. I didn't I didn't realize.

SPEAKER_01 1:30:26

Oh. Yeah, so that wasn't nice at all.

SPEAKER_00 1:30:28

But he gave you such a good blurb.

SPEAKER_01 1:30:32

Just by saying I was skeevy, or by No, isn't maybe I'm remembering this wrong.

SPEAKER_00 1:30:37

I thought the blurb on your book was this is what happens when the funniest financial journalist in America takes on the funniest story in modern finance.

SPEAKER_01 1:30:46

That blurb was actually from um a different person with the initials ML. Okay, what the hell? Who was it? Yes. That's from um Matt Levine, like the Bloomberg columnist, who uh Okay, sorry.

SPEAKER_00 1:31:02

Yes, then it makes a lot more sense now. Uh because I'd seen in most communication from you on Twitter, I hadn't seen that piece, but you were kind of like, you know, what's what's up with this guy? Um but then I thought, but Michael said this really nice. Okay, now it now it's all making sense.

SPEAKER_01 1:31:19

Yes. Um because but I I hope that if we do meet, that um, you know, we could have I I would be interested to uh discuss all the things that we've seen because we both spent a lot of time with Sam Bakeman-Fried. Um I was read his book with with great interest. Um like there's probably few people who are more interested to learn new tidbits about Sam Bakeman-Fried than me. Yeah. Um, but yeah, it was it was certainly unexpected that my book would get compared to Michael Lewis's book in these reviews, and then it was also unexpected that my uh uh a you know literary, previously a literary hero of mine would uh say such uh mean things about me to the New York Times. But what are you gonna do?

SPEAKER_00 1:32:13

Still the first innings, you know. Um by the end of it, maybe you'll like take his mantle or something like that as the you know best journalist in finance. Um You're in good company, by the way. Did you see what Nasim Taleb uh tweeted about Michael Lewis? Oh no. He said in short, Michael Lewis is a novelist faking to do reporting. He follows the most lurid narrative with no fact-checking in subjects he knows nothing about. Lewis never contacted Gigarenza to get his side of the story. When I asked him why, he responded, aren't you on Kay's side? So I don't know what book he's referring to there, but something, you know.

SPEAKER_01 1:32:53

I mean, I'm sure Taleb did not like the latest book either, because uh he is very anti crypto. Um and yeah, I thought um one thing I will say about writing about crypto is that you I you cannot write about crypto without picking a side. You know? Like this is like in my view, this is one of the craziest financial manias that's ever happened in the history of the world. And it's not about like one sketchy dude with curly hair, you know? And I think that like in in my book, um, it wouldn't have necessarily changed my book that much if if FTX had not been revealed to be a big fraud because the coins that people are trading on FTX are like all these scams, you know? Like whether or not it's a fraud, he's still promoting this like insane crypto bubble. Um and so I feel like you can't really write about you can't understand what happened by just following this one guy's story. Yeah you need to know about this uh this whole mania.

SPEAKER_00 1:34:20

Yeah, yeah.

SPEAKER_01 1:34:21

And so that I'm happy that um because for a while I was sort of like, oh man, am I making the right decision? This Sam guy seems pretty interesting. Should I make him even should I focus on him even more? But I'm glad that I didn't because I feel like it might be more, you might learn more about how these bubbles work to follow the story of like the random cook in the Philippines for a time got rich off his playing this Pokemon crypto game. You know, act so like I'm I'm happy that I was able to explore more of the crypto world and not just focus on this one dude's story.

SPEAKER_00 1:35:01

Let's see if we can bow the uh the book. Um quantity in dollars inflation adjusted. How crazy was the cryptomania compared to history?

SPEAKER_01 1:35:18

You know, this is like a calculation that I probably should have done, but did not do. I mean, I think that okay, the like the mortgage bubble was clearly bigger, but I'm not sure I would put it in the same category because I mean houses are real. Um if if you think of the crypto world as just like all hot air, and you're just comparing it with like you know, the South Sea bubble or something like that, I think even relative to the size of you know, the economy has grown a lot, but I think that crypto would dwarf like the tulip mania or the South Sea bubble, just because investing has been democratized. It used to be only like wealthy people would invest in things like that, and now like everyone can do it. Um but I mean polls have said like a huge percentage of people have invested in crypto. It's it's pretty wild. And even um, but yes, I do not have like the actual dollar rankings.

SPEAKER_00 1:36:23

Okay, couple questions about journalism, Zake. How much more time do you have?

SPEAKER_01 1:36:27

No, no, I'm enjoying it. I just um I get like uh I would say I oh this is just like a random aside, but I once interviewed General Wesley Clark, the former NATO commander who had been involved in some penny stock shenanigans. And this interview went on for like four hours, and I could barely talk by the end of it, and he was just like still hitting these talking points that I'm like, this is why this dude is a general, and I'm not. Like I was barely I was just like mumbling, I made no sense. I I sort of lose steam after like an hour.

SPEAKER_00 1:37:04

Okay, well then we'll we'll be able to But let's do it. Okay. We'll be able to close it out before the uh before we hit two hours. We're at one hour thirty uh eight. Um okay. This is something that stood out to me uh when you were talking about coming into your interview with Bankman Freed, because this is at the end of the book. You want him to uncover the truth, you want him to expose his real self minus all the personas, and you know that the stakes for this interview for you are so high. Like you know that if you go into it with the rightly framed question, the perfect setup, the nice to tease at the beginning, you can actually get the scoop of your life. So I wanted to ask how you think about um tactics in interviewing. How do you get what you want out of the guest? Author, uh whatever.

SPEAKER_01 1:37:57

So I actually I have a kind of unusual or maybe theory about this, which is that, and I'm open to being wrong. I'd be curious what you think. Um I feel like it's key to just let people talk, and I'm I'm actually I don't I like to be prepared. I like to know the facts. So I like I did a lot of research before that interview, and I came armed with like some crucial facts about what other people said about what happened. Um but I tend to think that it's important to just get people talking, and if you talk for a lot, people will sort of say what they want, and that can be kind of hard to steer people in different directions, and that once you've arranged the interview, and that you've arranged to have like a long conversation that will be, you know, in journalism, people will often try to speak to you off the record, and like that's no good. It has to be on the record. So I feel like once I've arranged that we're gonna have a long interview, it's gonna be on the record. Then my job is to just um get the person talking and to listen to what they have to say and to like be really engaged with it, but not I'm not like trying to script it all out. And like in that case, I really had no idea what he would be like. I thought that he might be very depressed, that he might be despondent, you know, his life was like ruined. Um, and what I found was that he was still maybe in denial and was feeling or just trying to stay upbeat because a reporter was there, but he was uh kind of chipper and very similar to how he behaved at the peak of the bubble the first time that we hung out. So um it's sort of impossible to prepare for like any situation. And in that case, um what I did that I think was helpful was I told him this is gonna be a long interview. Like you what you are I told him, and I also one thing I try to do with people, which I think people like, is I will um try to be honest with them about what I think, you know, and have like a real conversation. And so I would tell him, like, hey, your explanation is confusing to me, and like I don't understand what you're saying here, or like I don't really believe that someone as smart as you could totally not pay attention to lose track. At one point he tried to claim that he'd like misplaced eight billion dollars, and I was like, I you know, I don't know about that. Like, and I'll try and say it, you know. I try to be friendly but firm and to really engage with what they're saying and have like a real conversation. And I don't know, there could be other people who what do you think? Is it are you uh is there a perfect question?

SPEAKER_00 1:41:03

I think there is definitely um layers to questions in terms of I'll give you an example. Earlier in this interview, I asked you I asked you I asked you Do you ever think there'll be a full accounting of the scams crypto enabled? By itself, that question could elicit one type of response. It's rather open, but uh having gotten you to first talk about pig butchering, that like main answer is out of the way. So then when I ask you that, I know what's left in your brain is probably going to be some interesting anecdote that you might not have mentioned before in an interview, and as well, it could uncover some scam that didn't make the book. So I really thought about that. But this is from a podcasting perspective. If if I was a journalist and you were my subject and I really wanted to get something out of you, I actually really do think um obviously you mentioned being super prepared, that's probably the biggest thing. Um I've been in situations like that in my life where the stakes are really high, like the outcome of this conversation has to go the way I want it to go. And so um yeah, being super prepared, I think building some type of rapport if it's possible, um, and it's probably counterintuitive, but you just being super honest with SBF, like I'm a skeptic, off the top is probably worth a lot because you have to be so manipulative to be able to convince someone to not be able to like it doesn't seep out in the pause. At the end of the day, people instinctively subconsciously recognize genuine behaviour. And so just because I'm SBF and you're a journalist who doesn't who thinks I'm a bit of a fraud, even though that's our dynamic, if I know you're genuine and I sort of believe that you are who you say you are, I will soften up a little bit. But if there's a part of me in the back of my mind that thinks he's just trying to appease me to get something out of me, then I would never reveal anything.

SPEAKER_01 1:43:21

Um Yeah, I mean I I um I also think that like as a as a print re as a writer, I do not need the whole conversation to be entertaining. So I'm able to spend a long time going down like different rabbit holes that may not result in anything. Um and I have the luxury of later going back and after like that interview, there were some breaks, but like I was at this apartment all day long, and I only left because I got very tired at like midnight or something like that. And I had the luxury of later transcribing those tapes and looking through to see what he said and what was interesting, and I might not have even have caught it at the time. So like it's important for me to because also one thing that's a bit tricky as a as a writer is I'm sitting there doing this interview, but I also have to think about writing this scene in the book later. So I might not even be able to pay full attention, I'm recording it, but I might not even I'm I might have to write I'm writing down things like, hey, he just scratched his ear when he said that, you know, because that might be a good thing to mention in the book. Because I don't try and just like I I try to really notice exactly what happened. So I it's very intense for me. I'm thinking a lot about I'm thinking of the next question, but I'm also thinking about taking notes or remembering how he's behaving or looking around the room and noticing things. Um you also it's a tricky you have to write a description of the person's appearance. Like in a in non-f you often, when you meet someone in a book, you have to write about you want a description of what the person looks like. And that's a tricky thing to write. I find that very challenging. So I might be thinking about that while I'm while I'm talking. Um so I definitely need a long I need I I want it to be face to face, I need a long time, and I need to I I want to get to know the person a little bit and feel like I understand where they're coming from. And but yeah, so I I don't I don't have the I have so much going on that I might not really have the ability to do like uh I'm not really my my thought is not like where's the gotcha question, it's more just like what sort of interesting stuff might we talk about? Yeah. And then be prepared with facts so you can ask follow-ups.

SPEAKER_00 1:45:59

Yeah. I mean the follow-up and even the follow-up to the follow-up is typically where the best stuff comes out, right? Because you have your initial opinion, you know what you're supposed to say, but if you're prodded a few more times, you might actually end up revealing something which you didn't plan to reveal or just haven't even realized yourself. Um, you know, like so it's almost a learning for both people. Oh, I didn't know I, you know, knew that about this, or could say that about this.

SPEAKER_01 1:46:29

And he was kind of an unusual interview subject because he was really willing to engage with questions. Like some people do not want to answer your questions and will just sort of say their talking points and ignore your questions. He would like, even though I think he was, or I know he was lying to me quite a bit, he would humor your question. He would think about it, and he would give you an answer that was specific to that question. Which is really a honestly, most people in the business world do not do that.

SPEAKER_00 1:46:57

So Man, people, anyone listening to this has to read your book because the as well, just the context of SBF, this effective outerist. I I love the way you set up one of the questions. Um yeah, you write that you frame your opening question in terms of expected value so as to soften Bankman up. Yeah, so I mean for the audience who's still with us almost two hours in. You've heard obviously some snippets. Devicini pig butchering. Um but it's extremely entertaining. It's not a coincidence that like every single review says this is really funny and well thank you. I loved this quote. This is from a review of um Michael Lewis's book. Um but it's got nothing to do with Michael Lewis, it's just uh you know, from a journalistic perspective. I want to hear your thoughts on it. Being at the right place at the right time is a talent. How much truth do you think there is to this? So they're talking about Michael Lewis always being in the right spot.

SPEAKER_01 1:48:06

No, I I do I totally agree, and I would say, like some people say that Michael Lewis is really lucky to always get onto these big stories. And I yeah, I he is he makes his own luck by finding these big stories, and I feel like I did, I did too, and I I could tell that this was maybe I didn't really understand this crypto world, but I could tell that something big was happening, and then I worked really hard to identify who are the most interesting characters in it who I might want to spend time with. So I do think that um what might appear like luck is actually the result of like a lot of a lot of thought and planning, and that's it's honestly it's a lot more of the job in journalism than you might expect, is just like thinking of what might be a cool story. And I spend a lot of time, like my favorite writers, when I read their stories, I'll try and figure out how did they get this story. And like when I started my career, I thought it was just like you know, their secret source in a CIA called them up and and told them they should look into this, or their editor came by and said, Hey, I've got an assignment for you. And what I've realized is a lot of times they might have even read the story in the New York Times, but thought, hey, there's actually something deeper here. I should I should investigate. And it like that eye for like what's the big thing that's happening that I could really investigate and tell a great tale for um that's like a a big part of of being a good nonfiction writer. Man, amazing.

SPEAKER_00 1:49:52

I I get so inspired talking to people like you and you know the other guests in this podcast who have written types of investigative journalism, like Bradley Hart. For instance, was a guest. Um, this is a guy who just time after time. Like, I don't know if you read his North Korea story. Yes, that's it. Sounds great. It's like this is a guy that Bradley, he didn't luck, it wasn't luck that he formed a relationship with this guy. You know, behind the scenes on that is he's been talking to him for years, years and years and years. Um Duncan Maven was a guest on the show last week who did Pyramid of Lies, the story of Lex Greensill and supply chain financing.

SPEAKER_01 1:50:30

Blink if you recognize, but I know the story of Lex, I mean Lex Greensill, another amazing character.

SPEAKER_00 1:50:39

So Duncan Maven just got a um email, a tip. You know, inside a tip. Wow and he you know, dug dug down a bit and realized, oh, this is interesting, kept digging, and all of a sudden he's got this exclusive on what is one of the most consequential scams that brought down Credit Swiss. Uh it's really incredible. And that story was particularly close to me because he was this bogan from Queensland, Lex Greensill, who ends up rubbing shoulders with David Cameron and the likes. But um he he also then said that his tip inbox is uh you know more hot than ever. And so it's like, you know, wealth begets wealth, tips beget tips. So it's still early days, but do you have any indication for how your career is gonna change because of the success of this book?

SPEAKER_01 1:51:34

You know, what I think I I'm not sure about like now the book has come out, but one thing that I thought was really cool when I started writing the book is I found that people responded differently to me just when I said I'm writing a book. Like people had a lot of respect for this concept of like the nonfiction book about crypto, and I think it helped get some people to talk to me when uh they might not have otherwise. I guess because they know that I'm making like a multi-year commitment to learning about this topic. And right from the start, I would tell people, hey, like I'm I it was this thing I mentioned before where people will would try and go off the record, which is very difficult to do. I'm fine with going off the record if someone wants to like tell me a secret and like they need to protect their identity. But if I'm talking with like a corporate executive, it's just uh it's just because they want to like watch their words and it's makes it more difficult for me to like write about them. And I found that with the book, I was able to be like, hey, like with I think uh with the first time I met Sam Bankman-Fried when I went to his office, I told his people, I'm like, I'm writing a book, like I really need to bring this to life. I'm gonna need to spend a couple days there and shadow him. And they totally got it and were like, cool, yeah, sure. So cool. So yeah, I really like um it was a pleasant surprise that people were so into this. I because I took my stories very seriously too before I wrote a book. So to me, the approach is not that different, but I felt like people had this better, they like liked me better when I said that I was writing a book. And so um, yeah, I so I look forward to like my next book and going into whatever world I pick, I want to go in even deeper.

SPEAKER_00 1:53:29

So cool. Uh I'm I'm I'm so stoked for you. Um, last question before we hit the the ones that I like to ask everyone. You mentioned a few times a relationship with um Nathan from Hindenburg Research, um, something that you and him go back a while, it sounds like. You know, this is a guy who publishes he he runs a short fund, publishes research reports, which moves the market uh in favor of his position. And uh then journalists will uh you know either comment in the positive or the negative on that research report and further accelerate the the movement of the stock. So on a professional level, how does your relationship work?

SPEAKER_01 1:54:12

Yeah, so I have a huge amount of respect for the investigations that they that Nathan and his company do. And I mean I'll give you an example. Um I wrote a story, a profile of Chamath during the SPAC movie. Really?

SPEAKER_00 1:54:31

I gotta read that.

SPEAKER_01 1:54:32

And I was yes, so I was trying to expose that Chamath was promoting all these questionable companies. And either while I was reporting on the story or before I even started, Hindenburg came out with an expose of Clover Health, which was one of Chamath's SPACs. And they'd really done a lot of research on this company, and they'd shown that it was like a Medicare Advantage company, and they were like, honestly, the I've I've long since pushed the details out of my mind. But they had done a lot of research and like talk with doctors and talk with patients, and um now they present the conclusions in this like really bombastic way, but it's based on real research. And so when I went to go write about Chamath, I was like, um, I'm not just gonna take Nathan's word for it, but I went and basically redid uh some of the research they'd already done and dug into this Clover Health company myself and was able to use it as an example of where Chamath is really hyping something up and the company is really doesn't live up to that hype. And so that um me writing that in the Chamath story, might that, I mean, is that good for Hindenburg? Like, probably gives them um I probably cited some of their work, um, but I also um like everybody who who talks to reporters has some sort of motivation. And the I think you have to like take these short sellers and their reports with like a grain of salt because you know they're really out to uh to they really present things in like a very bombastic negative way, but I find that um look, there's a lot of like hype out there too, right? And so it's sort of I'm glad that there's somebody out there who is um writing these exposes, and often it'll give me something that um it's best if like their report isn't like too good. If they sort of like half expose something, then I might say, hey, that's I might I'll go read the report when everyone else does, and I might say, hey, it looks like they're onto something. Maybe I should I should investigate. Um and maybe um but yes, the short sellers they do like to get journalists to cover these companies too, so they'll contact you and be like, hey, you should check this out or you should check that out.

SPEAKER_00 1:57:17

What's anything got you onto these days?

SPEAKER_01 1:57:20

I um I don't have anything. He hasn't his his last report that I saw was about um like a Ponzi scheme that targeted Indian Americans, I think, in Texas. Um and I'm gonna have to it's sort of on my to-do list to check it out. Um but um I yeah, I don't have I don't have any hot tips from from him right now.

SPEAKER_00 1:57:47

Alright, Zeke. Three questions I like to ask every guest, if possible. First being, what is the role that serendipity has played in your life?

SPEAKER_01 1:57:58

So a big one the first thing that comes to mind when you ask that is that um ten years and five weeks ago, I was living in Union Square in New York, and me and my friends had thrown a party at our apartment, and we had the party had sort of wrapped up, and we'd gone down the street to this bar called Beauty Bar. And it was like one in the morning on a Saturday night in the summer, and I saw this beautiful woman sitting on the there's sort of it's there's dance, it's a bar that's like a you can get a haircut there during the day. It's like a beauty salon slash bar, and there's a dance floor in the back. And there was this um uh there's a beautiful woman sitting on the on the sidelines of the dance floor who really looked like she wanted to dance, and she was sitting with a guy who's um uh who uh had either one or two broken arms. Um and I don't know, I think I'm not always the most outgoing guy, but had had some beers at this party, and I was like, you know, I'm gonna ask her to dance. And a song came on, it turned and yeah, we've a couple years later we got married. Now we've we've just celebrated our 10-year anniversary, and it turned out that she had been at a different party in Union Square that had gotten busted by the cops for playing the stereo too loud, and they'd all gone to beauty bar. And yeah, this uh I think her friend was maybe trying to set her up with the guy with the broken arm. Um and also when we were dancing, this song came on that again, like kind of shy, not that good at dancing, but a song came on uh Love Shack by the B52s, that my parents had really liked when I was a kid, has always been like a favorite of mine, so I was probably more into it than I got over my like anti- my aversion to dancing. And yeah, I don't know where I would be today if that hadn't happened because um yeah, with I've really meeting Nikki really like changed my life, and um before that I was kind of uh I felt like I hadn't really found my place in the world, and she's uh um you know I I this was too cheesy to write in the book. Um I have mixed feelings about the the dedication. I did it it's dedicated to to Nikki, but I felt like I kind of like feel weird about writing like a really personal message there, um since everyone's gonna read it. I don't know, but um but I really feel like this um being we have like a really great marriage, we have a lot of fun together, and she's very much like not caught up in all this um like very supportive of among my projects, but like not caught up in them. And I think that had that having this wonderful relationship with her has given me like the um helped me have the confidence to go and do these um go on these adventures, and knowing that um I mean I I I remember when I was leaving Sam Bakeman-Freeze apartment after that long interview, or I was just like, wow, I'm I mean it was just it was kind of sad because I'm just thinking this guy's gonna get arrested soon. He's probably he's looking at like decades in prison, and I'm like, I am so glad I'm not in this crypto world, and I can just go back to my wonderful life with Nikki back in Brooklyn. Um so yeah.

SPEAKER_00 2:02:34

Man, what an incredible, incredible example. Thank you. Because so many details. Had they just kept the noise in check, you never meet her. Had you decided not to go out that night, you never meet her. Had the B-52s not come on, maybe you don't have the confidence to go up to her. I love it, I love it. Because hopefully, with that question, we get a story like that which highlights how your life is gonna the direction of it is honestly determined by like four or five pivotal moments. And there's so many great details in between those moments. But meeting you know, your life partner is arguably the biggest moment. And it's always through some type of serendipity. A million things could have gone differently, and in every alternative universe, you two never cross paths.

SPEAKER_01 2:03:28

Yeah, it's it's pretty uh I mean it's hard to imagine. It's just like it's um being with her has been such like a uh so important to my life. Yeah, but yeah, it could have gone um uh it's so random that that we met. Although afterwards we did find out that she was friends with the guy who used to live across the hall from me. No, but don't ruin it.

SPEAKER_00 2:03:59

That ruined it. It never would have happened otherwise.

SPEAKER_01 2:04:02

I like to imagine we might have met somehow through through Eric. Okay had had had this not this Yeah, I that's that's like it's so sad to imagine that we wouldn't have met that I've got this backup plan where we if we don't meet at the bar, we meet through through Eric.

SPEAKER_00 2:04:18

Man, you'd be surprised um how incredible some of these sort of origin stories are. I'm sure you know David Grant, the New Yorker.

SPEAKER_01 2:04:27

Um like big hero of mine.

SPEAKER_00 2:04:32

So he was a guest, and basically his response to that question was, you know, he almost he almost just didn't didn't get into writing. You know? And it was a pivotal moment, someone dragged him to some um class that he had signed up to and forgotten about. And in that class, another few pivotal things happened, which means, alright, fine, I'll take this like part-time job doing some type of writing. But it's you know, his direction was not he was not propelled in that direction, he had to be dragged there through a serendipitous moment, and now he's arguably like the greatest living non-fiction narrative writer, uh narrative nonfiction author.

SPEAKER_01 2:05:14

So Noah I love his work, and when I was uh when I was telling you before about like trying to figure out how people got their stories, he's one I'm always thinking about. I'm like, how did he come up with this one? I he's one of those ones guys who maybe seems lucky, but I'm sure it's it's it puts a lot of work into finding these crazy stories.

SPEAKER_00 2:05:35

Okay, you know so um Do you know the origin story for Kills of the Flower Moon?

SPEAKER_01 2:05:40

I don't I tried to figure it out, you know.

SPEAKER_00 2:05:42

Yeah, he said it on the podcast. I don't know how apocryphal this is, but basically he's in a museum and uh he sees a photo and the photo stands out to him, and he asks the museum curator or whoever the guide is, whatever, like, tell me something about this photo. And the guy just says, like, this is one of the most horrific murders, you know, that ever happened. And that propelled him down the journey. But it's not like this was a it's not like this was a well-known story. Like, here is a photo, and maybe there's a few living people who know details about it, but within the archives, David Grant pulls out Killers of the Flower Moon.

SPEAKER_01 2:06:23

Uh so I I will so in my I developed in my head a completely wrong alternative origin story for Killers of the Flower Moon, which is that um one of the FBI agents who's uh investigating these murders, who's a character in the story, actually wrote um a best-selling memoir about this that was published um maybe in like 1960. And it was like a big deal at the time. It obviously didn't tell the whole story, um, but um kind of similar to The Wager, his new book, he's telling a story that like at one time was kind of a famous story, although he's telling it in a different way and exposing new things. But you're starting, so in my mind, I was like, okay, I could, if I look through the bestseller lists of the 1960s, I might find another story that we've all forgotten that would be like amazing. So I I got them. Uh I did not find this this story.

SPEAKER_00 2:07:28

Okay, nice.

SPEAKER_01 2:07:30

So I guess I just need to wander museums actually and just look at pictures and ask the the uh docents about them.

SPEAKER_00 2:07:38

I don't know. You have to be so patient, so maniacal about the research. Another thing that stood out to me was I asked him how many if he could boil it down, how many hours of work went into one page. Okay. So you don't know the proper maths here, but he suspected weeks. Like weeks of work would have equated to one page.

SPEAKER_01 2:08:06

Um I feel like that means could that really be right? Because he's he's pretty productive. I mean, he puts out a book every few years.

SPEAKER_00 2:08:15

Look, I mean, that's what he said. Uh because especially for the wager, putting that one together, um obviously there's all these conflicting narratives. So, first of all, he's gotta find the actual vein of truth in all of these records that these guys kept. And uh it even goes further than that. Uh so he gave one example, and this is Killers of the Flower Moon. There was Yeah, he wanted to write um that basically this character um stood on the stoop in the in the front porch. But he wasn't sure if there actually was a stoop. And he sort of recalled the amount of effort he went to just to confirm there was a stoop, so he's not talking shit when he says he stood on the stoop. Um and you know, it's like I know personally, I'm not that detail-oriented. I can't do that. I'm incapable of it.

SPEAKER_01 2:09:11

It's incredible that he's you know, no, that's that's awesome. And I I mean, reading it, um, or like uh I probably we shouldn't advertise so many other books. There's only one book you should get, it's called Number Go Up. Um, but uh reading like The Lost City of Z, which is one of my favorites of his, um there are scenes like that where he's reconstructing this like Victorian-era explorer's life, and you just think like, how did he create this scene? And yes, like knowing his work, I know that he's not making these things up. And like if he says something about someone's attitude or their appearance, he's figured that out through the archive in the archive somewhere. Um, and that kind of reporting is incredibly um is incredibly time consuming. And but it can be a lot of fun too. I love digging into the I was uh one of the most fun days, uh one of the most fun times I had um, I mean a lot, all the book was fun, but I had a great time at the New York Public Library researching the history of financial shenanigans in the Bahamas. And that became like that became like maybe one page in the book, but involved um and uh it was a huge amount of research and really fun.

SPEAKER_00 2:10:42

So uh one thing that he stood that stood out as well was he's doing all this work in in archives, and so there's uh you know so many archives around the world um and all these archives are going through the process of scanning them so they're digital documents, so you can control F rather than fucking read through all this shit. So he suspects that um within our lifetimes, most of these archives are going to be digitized and we're going to be able to pull out just more and more and more unbelievably incredible stories from history that have been forgotten.

SPEAKER_01 2:11:26

I mean that'll be amazing, and I already there's just like so much information available that there's it one of the big challenges is just like knowing where to look and what to look for. And it's just it's sort of overwhelming the quantity of knowledge that you can you can access, you know, just sitting at home with your laptop.

SPEAKER_00 2:11:50

Alright, so let's see how quickly we can do the last two. What is a country you're particularly bullish on?

SPEAKER_01 2:11:56

Of the travels for the book, I Went to Vietnam for like a week or so to interview mainly to interview the um this man Twee who had uh escaped from the scam compound in Cambodia and I was just really impressed by um I was really impressed by the country. I just felt like uh um I so I feel very unqualified to answer this question. But my like having spent a week as a tourist in Vietnam, not really researching the company or the the country, I was just so I was so impressed by like the energy. Just seemed like there was uh it just felt like a place to be. Of all the places that I um went, there was just like it felt like it was happening. And I I can't really like I I'm doing a terrible job of explaining it, but I I felt like uh it's a place to vibe like developing quickly, and felt that people felt like optimistic and I felt like things were going great there. And I could be dead wrong. Um, and I don't know anything about like its government or um so yeah, the lightning round Vietnamese. But I love the answer. Okay, thanks.

SPEAKER_00 2:13:17

Yeah, I love it. There haven't been many Vietnamese uh submissions.

SPEAKER_01 2:13:20

Yeah, what do people go with?

SPEAKER_00 2:13:23

Um off the top of my head, I think Canada might be the most common answer. US is uh certainly also one of the most common answers. Okay. Last one, Zeke. Conversation between any two people of history.

SPEAKER_01 2:13:37

But I'm gonna preface this by not by saying this is just a answer. As long as I think this would be the best one in the world. But I was uh this is what I'd like to see. One of my favorite writers slash journalists in history is uh Norman Mailer. And I'd love to read a Norman Mailer profile of Donald Trump. So they would have to talk for this profile. And because I feel like uh Trump is like a great Norman Mahler character. I wonder then maybe they this may even exist. I mean they they he was a famous Trump was a famous guy while Norman Mailer was still around. Um but I just feel like uh he it'd be interesting to see how he tackled this character. Um I love journalists who like I like I love these nonfiction writers, even though it's not really my style, I like people who just like really go for it and write like their sort of like insane opinions and their like crazy takes on on the world. And um uh and Mailer was kind of like a uh Trumpian figure himself a little bit. Um so I I think we I would love I'd like to read his uh his take on Trump.

SPEAKER_00 2:15:04

Okay, love it. Unexpected, nice uh twist on it as well. Um but Zeke, that's that's that brings us to the end. So um went much longer than I had anticipated. Thank you for being so generous with your time. Oh fucking great book, and um I'm stoked to hear what the uh what the audience have to say about you and the book.

SPEAKER_01 2:15:28

Oh well, thank you so much for having me on, and it's been really fun uh talking journalism and investigating with you. So I I'll see you in um at you know three weeks per page. I will see you in like eight years with um another book.

SPEAKER_00 2:15:48

Nice. Looking forward to it, mate.

SPEAKER_02 2:15:51

Okay.