Crypto Critics' Corner

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Episode 127 – Let’s talk about Number Go Up with Zeke Faux

Let's Talk About Number Go Up with Zeke Faux – Crypto Critics' Corner

Today Bennett and Cas are joined by special guest Zeke Faux, journalist and author of the new book Number Go Up. Faux was able to gain access to SBF (Sam Bankman-Fried), Deltec executives, and the head of Tether while writing his book, which explores how cryptocurrency is being used for nefarious – and not so nefarious – reasons in the real world. If you'd like to purchase Zeke's book, please visit https://a.co/d/3mqDKBO (this is a non-affiliate link to the Amazon page for his book).

Cas Piancey and Bennett Tomlin talk with Zeke Faux about Tether, FTX, apes, and his new book Number Go Up.

This episode was recorded on August 25th, 2023.

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English Transcript:

00:00:05:01 - 00:00:11:20
Cas Piancey
Welcome back, everyone. I am Cas Piancey. I'm joined, as usual, by my partner in crime, Mr. Bennett Tomlin. How are you today?

00:00:11:20 - 00:00:20:02
Bennett Tomlin
Well, to be honest, it's 100 degrees here. And as someone who's six foot three and 215 pounds, that's just not a very comfortable situation to be in. How are you doing?

00:00:20:05 - 00:00:39:02
Cas Piancey
Yes, okay. I'm doing good. It's warm here, too. I just jumped out of the sauna. So I have different reasons for being sweaty and gross. I'm super excited to have someone on the show who's been covering tether almost as long as we have in a really important and meaningful way. Zeke Faux, how are you today?

00:00:39:04 - 00:00:56:23
Zeke Faux
Great. Yeah, sitting pretty in like, the air conditioning here in Brooklyn. And definitely you all have been covering tether long before me. You'd already gone and returned from Hong Kong, but before I'd even started digging into it. Right. I'm pretty sure, right?

00:00:56:23 - 00:01:22:25
Cas Piancey
Yes. No, that's true. But yes, you've taken a lot of you brought up my Hong Kong trip, but you took a lot of crazy trips. We're discussing your book number. Go up, which I highly recommend for anyone who's interested in cryptocurrencies, who's interested in fraud, who's interested in tether, stablecoins, cryptocurrency exchanges, whatever. You should get your hands on this book.

00:01:22:25 - 00:01:41:25
Cas Piancey
It's it is the best book on cryptocurrencies I've read since at least Nathaniel Popper's digital gold. I think it's it's genuinely an important book for cryptocurrency advocates and critics alike. Everyone should get out there and check it out. But Zeke, like, why? Let's start. Why did you write this book?

00:01:41:26 - 00:02:07:01
Zeke Faux
Ever since I was like a teenager, I always loved reading these adventurous nonfiction books like John Krakauer's Into Thin Air, or more recently, like David Grann and The Lost City of Z. And I've been an investigative reporter now for quite a while, but I never really found the right story. I never found a story that I thought could sustain a whole book because, like, the last thing I wanted to do was write a boring book.

00:02:07:05 - 00:02:30:00
Zeke Faux
And when I started looking into crypto, I got totally sucked in and I was traveling around the world meeting like these overnight billionaires, these guys who seem totally like scammers. And I'm like, Why are they hanging out with me? And I realized that first of all, I was in the middle of the biggest financial mania that the world has ever seen.

00:02:30:06 - 00:02:49:08
Zeke Faux
And second of all, like, this is the adventure story. This is the book I have to write and I decided to do it and to do it as best I can because I felt like, honestly, I was kind of surprised no one else was doing it. And I'm like, this is a this is actually an important time in world history.

00:02:49:10 - 00:03:05:15
Zeke Faux
Like, people are going insane. It's like never before have so many people been getting so rich off, such like flimsy schemes. And I realized I was in a great place to chronicle it and that's what I tried to do.

00:03:05:18 - 00:03:30:08
Bennett Tomlin
I was going to ask you, the first thing I've written down is how does it feel knowing that by coming on this podcast you'll never get another interview with Jan Ludovicus van der Velde, But I guess considering Chalopin opened that interview by warning you he might kill you. Perhaps that's not unwelcome. Do you have any thoughts on what it was like to kind of try an interview and meet some of these people during the process of going through this book?

00:03:30:14 - 00:04:00:19
Zeke Faux
So, Jean Chalopin, the chairman of Deltec I met a few years ago when I started looking into tether. And if you're not like a superfan and aren't familiar, he literally created Inspector Gadget like he had a really successful career in Hollywood. He and he got rich from that. He bought a castle somewhere in Europe. He bought this colonial mansion in the Bahamas.

00:04:00:25 - 00:04:15:11
Zeke Faux
That was the bad guys house in the Bond movie Casino Royale. You might remember, like remember when Daniel Craig gets out of the water and like, he's like with his glistening abs and there's like a girl riding on horseback who could.

00:04:15:12 - 00:04:16:13
Cas Piancey
In the background.

00:04:16:15 - 00:04:42:09
Zeke Faux
Yeah, in the background. I think the bad guys wife is like looking at him, kind of like longingly. She's in shallow pants, house or former house. So I emailed him at the time. All right. So he eventually invested in this bank in the Bahamas called Deltec, and Deltec became a key banker for tether because tether, like the central mystery of tether.

00:04:42:09 - 00:05:02:28
Zeke Faux
Right, is like they say, it's backed by dollars. Supposedly they have tens of billions of dollars in the bank, but they've never quite provided satisfactory accounting for that money. So at the time, Shallow pin was one of the only or the only banker who would say like, I've got to, I'm holding some money for a tether. And he was totally cool.

00:05:02:28 - 00:05:06:24
Zeke Faux
He invited me to his office. We had a long talk.

00:05:06:26 - 00:05:31:05
Cas Piancey
Actually. Can I pause you right there? Because you in your book bring up that when you enter his office, he pulls down a book about like criminal fraud or like, I forget the exact like what exactly it was about. But just it's just stunning to me that, like, you walk into his office and he already is like, money is this very funny criminal thing, isn't it?

00:05:31:05 - 00:05:35:10
Cas Piancey
And it's just like, what is happening right now? What is? Yes. You know, I mean.

00:05:35:12 - 00:06:17:00
Zeke Faux
It was totally wild. And but so I have to say, like with your original question, he has been nothing but honorable with me. We've become pretty friendly. And like, when he comes to New York, we'll often sometimes meet up. And I hope that he feels like this book is a is a fair portrayal of everything that happened. It's easy to jump to conclusions like in crypto world, and I haven't seen any proof that other than serving as tether's banker that well that's a lot of question but he's been totally with me and I hope that I hope that this he feels like the book is fair.

00:06:17:01 - 00:06:37:04
Bennett Tomlin
Yeah. On that point, there was a couple interesting details about him that were kind of new to me, are framed in a new light, which helped me understand some things like that. When Tether started banking at Deltec Bank and Giancarlo Devasini purchased the piece of property right next to Chalopin down on the beach so they could be neighbors.

00:06:37:06 - 00:07:15:22
Bennett Tomlin
Or what was really interesting to me was in one of your conversations with him, he was talking about how when Tether first started banking there and they issued that November 2018 letter from him that said Tether had all the assets they were supposed to have, which was the thing he referred back to in his interview with you, was at that period, Tether didn't have all the assets they said they had because their public representations as of November 2018, when that letter came out, was that tether was holding all cash and the CFTC in New York AG case for November 2018 when this was occurring, part of it was not in cash, it was

00:07:15:22 - 00:07:28:27
Bennett Tomlin
in bonds and other securities. So even when Sheldon was making these representations and saying, like everyone was worried, Tether didn't have what they said they had, he was aware Tether didn't have what they said they had or should have been aware.

00:07:29:00 - 00:07:47:15
Zeke Faux
Okay, so that detail is not one that I have fresh in my head in terms of what they had said exactly about the composition at that time. But and I don't want to be like the tether's PR person here, but what I would say that is at that time the question was more like, does tether? Is this all made up?

00:07:47:19 - 00:08:09:15
Zeke Faux
And they had some money, they had it, or maybe it was invested in some stuff. They had it in his bank and he was quite honest with me when he said that, you know, at that time he knew about all the money. Now they had other bankers and he wasn't going to say for sure that he knew what was going on with their whole banking situation.

00:08:09:19 - 00:08:16:12
Zeke Faux
And over time, I think Deltec has become like a less important part of Tether's banking relationships.

00:08:16:17 - 00:08:49:28
Cas Piancey
Yes, I think Capital Union Bank is now kind of taking on that role, at least from what we know. But I do want to push back as a skeptic on the statements there, because I do think that you might be right that some people have always stated like, oh, there's no money in tether. Sure. Okay. But like, I think what has largely been the skeptic or critical component of of of what people are talking about tether isn't that there's no money there it's how did the money get there where is this money from and what are they doing with the money?

00:08:49:28 - 00:09:05:24
Cas Piancey
Is it legal? Right. I think that is more along the lines of what criticisms and skepticism about Tether have been for a few years now, as opposed to like they never had any money to begin with. And I wonder how you feel about that question as opposed to, oh, they don't have any money at all.

00:09:05:24 - 00:09:36:01
Zeke Faux
Yeah, I mean, I keep going back and forth on on tether and say you think like, hey, if they really are telling the truth all the time now, why can't they prove it better? And like they have this whole history of misleading statements. They've been sued for lying by the New York attorney general. And yes, I definitely thought it was more interesting as I went on to explore this question of like, who is using tether and tether.

00:09:36:04 - 00:09:58:06
Zeke Faux
I went all the way to Cambodia to check this out. It's kind of a crazy story as it started with a spam text message, like one of those spam texts that we all get said, like, Hey, David, it's Vicky Ho. Like, What's going on? I started to I looked into these spam text messages. I'm sure you're familiar. It's like this scam called pig butchering.

00:09:58:08 - 00:10:21:01
Zeke Faux
And this Vicky Ho, who I was talking to, she tried to make friends with me. She eventually started dropping hints that she was great at crypto trading and I might want to trade with her. Then she had me download like this crypto trading app, and when it came time for her to get my money, she was like, Hey, I've got a really safe way for you to transfer money to me.

00:10:21:03 - 00:10:55:23
Zeke Faux
Get like a regular crypto app, like Coinbase or Crypto.com or something. Buy some of this coin called Tether is backed by dollars, it's stable and then send the tether to my trading app and we'll make like a lot of money together. And what I. I started talking to my experts on pig butchering and I found that tether for whatever reason is the favorite currency of these crypto scammers and that people are sending like huge amounts of tether to scammers like people will send over their like whole life savings.

00:10:55:23 - 00:10:56:17
Zeke Faux
So it's really wild.

00:10:56:19 - 00:11:06:13
Cas Piancey
You just said something interesting to me because you explain the scam, but you said for some reason they are choosing tether. Do you have any insight into why they would be choosing tether?

00:11:06:13 - 00:11:29:14
Zeke Faux
One thing that makes tether appealing is that although this could be true of a lot of cryptocurrencies, like when I send it over, it's irrevocable. It's not like there's no one. There's no chargebacks like on a Visa card, like it would it would set up all sorts of red flags at my bank if I tried to send money to like some random company in Cambodia.

00:11:29:21 - 00:11:53:14
Zeke Faux
But whatever, I can just zap it over to Vicky Ho. Even people were sending over, you know, hundreds of thousands of dollars. And it's instant or relatively instant and you can never get it back. But I think like honestly, a lot of the appeal is that it's a stablecoin. Like, even the criminals don't want to deal with value fluctuations by like accepting Ethereum or something like that.

00:11:53:16 - 00:12:15:07
Zeke Faux
And it's part of their pitch to some of them will do. They'll say like they're never you're just going to deposit the tether in the smart contract and you'll earn interest. So it's part of the appeal is that it is dollar backed and that it's supposed to have a stable value at one and that yeah they take advantage of that for their for their pitch.

00:12:15:10 - 00:12:23:11
Zeke Faux
And some people I talked to said that this accounts for like billions of dollars like a crazy amount of money is lost to these scams.

00:12:23:15 - 00:12:45:16
Bennett Tomlin
Well, and one thing you mentioned there is that tether is irrevocable, which isn't actually true. And it's something you've talked about in the book and something we talk about on here before, which is that tether has the ability and offers a service where they will freeze tethers that are associated with certain types of scams or certain sizes of scams.

00:12:45:18 - 00:12:56:15
Bennett Tomlin
But during your course of reporting for this book, they informed you that they are not willing to do that if the scam falls below their line. Did that surprise you to find out?

00:12:56:16 - 00:13:27:22
Zeke Faux
Yeah. I mean, I think it's kind of a weird stance they have where they will freeze assets sometimes like they will comply with law enforcement requests. Like I could imagine a crypto company saying, Hey, it's on the blockchain. We don't control it. They're showing that they do have the power. And just jumping ahead a little bit here, like the crazy part of this pig watching story is that the scammers are themselves victims of human trafficking.

00:13:27:25 - 00:13:47:01
Zeke Faux
So like there are these office buildings in Cambodia that are just full of like floor after floor of people who've been tricked. They've been offered like good jobs, they travel from other countries, and then when they show up, they're forced to send these spam messages and scam people at these things that are doing.

00:13:47:06 - 00:13:49:21
Cas Piancey
State level kind of scam, Right?

00:13:49:23 - 00:14:24:03
Zeke Faux
Yeah. I mean, the reason they're shocked with these like words, Taser sticks, it's people are killed. It's truly horrible. It's like an international human rights issue. Thousands of people have been tricked like this and the bad guys are often Chinese gangsters. So this is like a really, really bad crime rate. And I spoke to there's this kind of immature organization that's trying to of people who've been victimized financially by pig butchering, but then decided that they wanted to help the human trafficking victims.

00:14:24:05 - 00:14:51:10
Zeke Faux
And it's called the Global Anti Scam Organization or Gazzo. And so these people shared some communications that they that victims had had with tether where the victims are saying, hey, I've been scammed. Can you freeze these tethers and get them back to me and tether. As you pointed out, in some cases they will freeze accounts. But here they made all sorts of excuses like it sounds like it's just a dispute between two people.

00:14:51:12 - 00:15:17:08
Zeke Faux
We don't want to get involved. It's not very much money. And in one they said we would only intervene if there was violence involved, which I thought was just like a bizarre statement. And here are clear there is violence involved. So look here. If tether was a bank, their position would be totally untenable because their position is sort of like, hey, we only deal with wholesalers.

00:15:17:10 - 00:15:42:11
Zeke Faux
Well, I'm going to back up a little bit for if you're not like an expert on this tether coins are sold in big chunks to like crypto exchanges or big traders. So if you're like a major crypto whale, you can buy, you can send cash to Tether's bank and receive tether tokens or the other way around. But if you're like a regular person or a Chinese gangster, you get the tether tokens some other way.

00:15:42:14 - 00:16:02:06
Zeke Faux
You buy them on a crypto exchange, you pay cash for them from it. Someone sends them on their phone and so Tether doesn't know who you are and Tether says they don't need to. Their responsibility is only to the people that they interact with directly. And once the tokens are out in the world, that's just sort of like crypto land.

00:16:02:09 - 00:16:04:08
Zeke Faux
Not really their problem in general.

00:16:04:09 - 00:16:23:18
Cas Piancey
I would suggest like the comparison here would be something along the lines of like if I go and get $1,000 from my bank and then I start spending that money in the physical world, they can't control what I'm spending that money on anymore. If I'm buying drugs with it, if I'm buying sex with it, if I'm buying whatever, like they can't control what I'm spending the physical cash on.

00:16:23:21 - 00:16:26:21
Cas Piancey
Like after I've already gotten the cash from the bank. Right.

00:16:26:24 - 00:16:49:11
Zeke Faux
That's cash. Now, in this case, like, let's say I have tether on my phone, right in some sort of wallet, like I have a blockchain address, which is just like a string of numbers and letters. And that address is associated with a certain amount of real money that tether is holding on my behalf. I would compare it to like a Swiss bank with a numbered account back in the day.

00:16:49:15 - 00:17:01:24
Zeke Faux
Just because it's crypto doesn't mean that it's somehow something different. Like these guys are holding money on behalf of their customers, even though they claim that these guys are not their customers.

00:17:01:24 - 00:17:30:10
Cas Piancey
I think this is the same kind of story that Bennett and I had with Tether, which is that you start getting into all of these. What other word are we going to use? Scams, right? There's there's all these Ponzi fees and scams and frauds that are operating in the cryptocurrency industry in general, whether it's like totally fake ones like one coin where they don't even have a blockchain or something like step in where it they say it's Ponzi nomics, it's not a Ponzi whatever, right?

00:17:30:10 - 00:17:44:27
Cas Piancey
Like there's these different categories of it. But what you ended up focusing on and this happened to Bennett Nye as well, was that it was like if Tether went away, all of these are going to go like they cannot survive without tether. How did you come to that conclusion?

00:17:44:29 - 00:18:08:17
Zeke Faux
In the early days of crypto, I realized that so many of these companies, crypto companies, had a problem, which is that banks didn't really want to deal with them and like to me, one of the key parts of starting a crypto company is that other people send me real money and then I give them crypto tokens. So like step one is very key to me.

00:18:08:17 - 00:18:30:17
Zeke Faux
I need some bank to be able to accept the real money from other people. And banks were flagging a crypto stuff as suspicious activity even as late as like 2018. Sam Big Ben Freed was having trouble at this when he was starting his crypto trading company, Alameda and Tether was like the people who came up with Tether had an idea.

00:18:30:18 - 00:19:01:20
Zeke Faux
Tether's owners also run a crypto exchange Bitfinex and Bitfinex had had issues with with banks and they thought we could solve this by separating the crypto exchange part from the accepting real money part. So the idea which wasn't really pursued but was that original idea, was that Bitfinex could be a crypto only exchange and tether could be the ones that accepted real money.

00:19:01:27 - 00:19:26:14
Zeke Faux
So essentially, like if you wanted to go to the crypto casino first, you would go to the cashier, which was tether. You would trade your real money for tether tokens and then you'd take those tokens to the casino and like Tether played that role for a lot of people in crypto, where it was the way that money was getting real money was getting into this whole crypto ecosystem.

00:19:26:16 - 00:19:31:06
Cas Piancey
It was one of the only ways outside of like an on ramp off ramp of an exchange rate back in the day.

00:19:31:10 - 00:19:50:16
Zeke Faux
Definitely. And I think it's become like there's more and more on and off ramps. All right. They got to be like less crucial, but still was a way that everyone was moving around. If they had to move around big sums of money, tether was the way they did it. And it tied together like so many people in the crypto world.

00:19:50:18 - 00:20:20:19
Zeke Faux
So like as I write in the book, looking into tether pretty early on brought me to FDX and brought me to meet Sam Bankman-fried, who is like the boy genius of crypto with this exchange worth like $20 billion a star in Washington and Silicon Valley. And yet, like a huge user of this coin that, as I write in the book, seemed to be quilted out of red flags.

00:20:20:22 - 00:20:35:14
Zeke Faux
So it's just like a really weird situation to me. And I felt like tether was tied. So many of these people together, it made like a really interesting looking at a tether brought me into like all the weirdest places in the crypto world. It was a lot of fun.

00:20:35:21 - 00:21:03:04
Bennett Tomlin
And was kind of interesting to me. And reading this is how so much of Tether's history and function is still kind of shrouded and it's kind of unclear what happened. Like even the founding itself, there's a divergence in narratives among some of the founders and early executives. Like if you listen to Brock Pierce, he was the do love for creation, as he said to you, and brought together William Quigley, Jonathan Yant as Craig Sellers.

00:21:03:07 - 00:21:11:25
Bennett Tomlin
Reeves And started this stablecoin originally real coin and then partnered with Bitfinex. It became Tether. They gave it away and whatever.

00:21:11:28 - 00:21:17:13
Cas Piancey
But it slowed down. Slow down. Hold on. You're you're running through this. Everyone totally knows what's going on here.

00:21:17:13 - 00:21:24:08
Zeke Faux
Yeah. Let's let me talk about for a minute because he is like one of the greatest characters in crypto world.

00:21:24:14 - 00:21:27:23
Cas Piancey
Great being a euphemism.

00:21:27:26 - 00:21:52:07
Zeke Faux
Well, he was a child actor. If you watch the mighty Ducks in classic Disney, you know, kids hockey movie, in the beginning, he plays the coach in a flashback where he misses a crucial penalty shot. And it was like a pretty successful child actor. I mean, you could talk about his career for for quite a while. Brock has this child acting career as a teenager.

00:21:52:11 - 00:22:16:24
Zeke Faux
He gets a job at this dot.com startup run by this guy named Mark Collins. RICHTER They claim that they're inventing the future of video by making these, like, short web series. But like, the technology is not there yet and like, the Web series are truly bizarre. And this is Gemma Collins. Richter Yes. Then Digital Entertainment Network, very dark story.

00:22:16:24 - 00:22:50:24
Zeke Faux
You could read about it in the book, but he ends up fleeing to Spain and getting charged with sexual offenses. I'm Pearce is not charged and Pearce goes on to start a virtual item trading company like he goes he starts this World of Warcraft gray market company where like basically everyone was there was a lot of people playing these massively multiplayer online games, EverQuest ing like EverQuest.

00:22:50:24 - 00:23:24:16
Zeke Faux
Yeah. And like, let's say you, you didn't want to spend like 93 hours like kicking pigs, but you wanted to get the, like, rare sword of Waldorf. So people were like going on eBay and buying these items and having them delivered within the game. And the game companies didn't like this because it meant it encouraged there to be like bots and actually kind of in like a weird version of the crypto scamming that I wrote about later.

00:23:24:19 - 00:23:51:22
Zeke Faux
There were people there were gold farmers in China who would have to like, sit around all day long playing World of Warcraft repetitively to earn coins that they could then sell to. Like rich players in the in Western countries. And so Brock Pierce had a company that was like a middleman that was buying the gold from the gold farmers and selling it to players with cash who didn't want to kick pigs.

00:23:51:24 - 00:23:53:25
Cas Piancey
And this is Iggy. Iggy, Right?

00:23:53:28 - 00:24:31:18
Zeke Faux
Iggy Yeah. He ends up working with Steve Bannon there, which is kind of nuts. Bannon comes in as like chairman or CEO brokers a big sale of a company or an investment, and Pierce walks away with like, I think, 20 million bucks, which he and then he I think from his virtual item trading background is like sees the potential in cryptocurrencies and some of the appeal of them and starts like a cryptocurrency investment fund and then this is where, as you were saying, the history of tether gets kind of disputed.

00:24:31:21 - 00:24:56:26
Zeke Faux
He gets involved with Tether. He's definitely like a co-founder, but it's like there's like six people who all say that they are the ones who came up with the idea for Tether and I did my best to try to look into like, who deserves the most credit. But it's like a very it's difficult to to to figure out.

00:24:56:26 - 00:25:24:10
Cas Piancey
It's fascinating because that part of the story I had never heard and from from what I had heard, like if if if we go back years and years and years, the story told to everyone was one. First of all, ever, they tried to hide the fact that Tether had been purchased by Bitfinex. So this this idea that there was that like, as far as I know it first was exposed when the Panama Papers came out.

00:25:24:10 - 00:25:27:01
Cas Piancey
Isn't that right, Benet? You're What's wrong with that?

00:25:27:03 - 00:25:57:00
Bennett Tomlin
There's, again, conflicting history here, because the earliest versions of Tether's website that you can find reader before they made the initial announcement and Bitcoin talk brag about having the same executive team as Bitfinex shortly like around the time they announced it. That goes off Tether's website and Juan Carlo on bitcoin talk is talking about how he hopes he gets an invite to this new tether service soon because he's excited to try it out.

00:25:57:08 - 00:26:20:28
Bennett Tomlin
Right. So this is when they start denying it's together again. At a certain point here, one of the executives acknowledges they work together really closely. Then they go back to denying it until we get to the Wells Fargo lawsuit, when they get debunked in Taiwan. Then they filed a lawsuit together against Wells Fargo. Phil Potter goes into the whale pool team, speak and tries to make the claim, No, we're not the same company.

00:26:20:28 - 00:26:40:18
Bennett Tomlin
We just happen to bank at the same places. We got debunked at the same time. So we came together for this lawsuit. That's important for all of the cryptocurrency ecosystem. Then the Paradise Papers come out and then it's really definitive. They can't really get around it, but they had at times before that demonstrated and then went back on whether or not they were interrelated.

00:26:40:23 - 00:27:08:24
Zeke Faux
That interesting. That's a very interesting question. I definitely you're more in the weeds on their representations back then than I am. But, you know, I realize we've brought up a few times Shawn Carlo, Diva Orsini, who has got to be like one of the best characters that it came across in crypto world. So he was not one of the original founders of Tether.

00:27:08:27 - 00:27:33:25
Zeke Faux
He's an Italian and he was trained as a plastic surgeon. He's from Milan and he walked away from his career in plastic surgery when he was maybe 25. He had kind of a quarter life crisis. And he wrote at the time that, like his whole career seemed like a lie and he couldn't do it anymore. He got into like the import export business.

00:27:34:03 - 00:28:21:13
Zeke Faux
It was bringing in like RAM laptop parts, assembling laptops. He was charged with counterfeiting by Italian authorities, settled the case. And long story short, he ended up just learning about Bitcoin early on, making a big investment in it, I'm told, and then investing in Bitfinex, the crypto exchange, which was fairly successful early on. So after like Tether got started, Bitfinex took it over and they he although he's on paper, the CFO, everyone tells me he's the boss, he's the guy that runs bitfinex and tether.

00:28:21:15 - 00:28:58:07
Zeke Faux
And so a lot of the book I spend trying to figure out his mysterious past and trying to talk with him about tether after some of these questions I have and find out what he thinks about how this stablecoin that allows people to like instantly move dollars around the world. Clearly having all sorts of interesting effects to find out how he feels about all that he is not the founder, but maybe deserves a lot of the credit for or blame for how big and successful tether has been.

00:28:58:14 - 00:29:25:14
Bennett Tomlin
The story of him leaving the surgery job is just endlessly fascinating to me. Like this is a guy who trained for years to become a plastic surgeon, does it for one week and then or a few days, a couple of weeks, whatever, gets asked to do a breast reduction and then just goes to the clinic, apparently to move to China is his version of the story that you tell in the book is he moves over there and then starts this import export business.

00:29:25:21 - 00:30:07:03
Bennett Tomlin
And some time after, this is when we know he starts kind of running eventually this import export business is when he starts collaborating with Yan Lu, Leviticus Vanderbilt, with him running Perpetual Action Group, Monaco and Yan Lu, Leviticus running Perpetual Action Group Asia, and then collaborating together as part of this kind of import export scheme. And so I just think that's it's such a strange career path for him to go from training for years to being to be a surgeon, doing it so briefly before immediately entering this like electronics import export business and then eventually ending up in crypto after a couple of years after some mysterious fires when his generators go up at his

00:30:07:03 - 00:30:14:20
Bennett Tomlin
production facility. It's a it's it's fantastical. You can't you can't make up what Khalil had ever seen.

00:30:14:23 - 00:30:36:07
Zeke Faux
And I'm actually not sure how long he was a plastic surgeon for if it was actually I I'm not sure it was that short, but it was definitely not long for someone who'd spent all this time training. And I actually I have one of the one part of the book that I had a lot of that was fascinating for me is I mean, I went to Milan, I visited this this clinic where I'd worked.

00:30:36:15 - 00:31:04:19
Zeke Faux
I felt like I was hitting a dead end. And then on Google in the comment section of an old Italian political blog, I found that that he he was posting and then he posted a link to a website that's almost like a online diary. And so we should say like John Carlo, kind of a mysterious figure. He never gives interviews.

00:31:04:22 - 00:31:06:04
Zeke Faux
He used to be he's never seen it.

00:31:06:07 - 00:31:17:03
Cas Piancey
Just for what it's worth, He used to be present pretty regularly in forums and on in in. Oh my God, why am I? We'll talk. What is it called? Well.

00:31:17:03 - 00:31:17:27
Bennett Tomlin
Well, Bitcoin talk.

00:31:17:27 - 00:31:19:20
Zeke Faux
He was super, right?

00:31:19:22 - 00:31:24:22
Cas Piancey
No, not Bitcoin. No, no, no. But Will. Oh, what's the fucking email? Poor thing. Time.

00:31:24:25 - 00:31:29:07
Bennett Tomlin
And he went in there like once or twice. Mostly that was like fill in Zane doing that.

00:31:29:10 - 00:31:49:27
Cas Piancey
Yeah, fill, fill usually. But. And John Carlo also would occasionally drop in there and talk to these people and as you know Zeke, because he commented about your article, he did briefly appear on Twitter to comment and get mad about what you were saying to both of your points here. I think what what's really crazy about all of this.

00:31:49:27 - 00:32:22:23
Cas Piancey
Right. So we have Brock Pierce, child actor, we have John Carlo, who is a plastic surgeon turned import exporter. We have John Ludovic. Ludovic is Vanderbilt, who is an import exporter. The only one with a real financial background is Phil Potter, which is why when he tries to take credit for basically creating tether, I actually believe him more than I believe the rest of these schmucks.

00:32:22:23 - 00:32:45:09
Zeke Faux
Yeah, I think Phil definitely was very important. He was the like operationally making this making this happen and where it was hard to figure out. The harder part to figure out was like, who had the idea for a dollar backed Stablecoin? I think that idea was kind of floating around. That's the conclusion I come to, is that a lot of people were kind of talking about, Wouldn't that be cool?

00:32:45:14 - 00:32:47:03
Cas Piancey
Yeah. And well, so.

00:32:47:06 - 00:33:04:03
Bennett Tomlin
I had happened in the like six or so years right before Tether was founded. They got indicted, arrested in 2013. Tether was founded in 2014, if I remember. Right. So in that lead up, there were people doing not blockchain, similar kind of tokenized representations of dollars like that.

00:33:04:03 - 00:33:31:06
Cas Piancey
So but I do want to bring up so you got to meet Vanderbilt, which is like, no, no one else that I know has had this opportunity. And I think it was just such a confusing interview that I like when you're talking to him, the things he's saying don't mesh with the reality for me and I and I just want to know what your perception was upon discussing tether with him and stuff.

00:33:31:06 - 00:33:48:27
Cas Piancey
Because one of the statements he made and maybe I'm misquoting here, but something along the lines of like, I don't like money, I don't care about money. You're running an $80 billion stablecoin. How can you possibly say that out loud? Like, what are you talking about anyway? Yeah, please. I just love to hear your experience with VTB.

00:33:49:01 - 00:34:17:01
Zeke Faux
Yeah, I mean, it was really exciting. Joe Vanderbilt, he is the CEO of Tether on paper, though we're all told he's sort of a number two to Sean Carlo. He's so under the radar that some people speculated that he didn't really exist. But like what I set out on this mission to get to the bottom of this stuff, I was like, you have to see this all the way.

00:34:17:04 - 00:34:49:06
Zeke Faux
So I was really determined to find these guys and interview them. And I went to Sam Bankman-fried crypto 22 crypto 2022 Conference in the Bahamas is April 20, 22. One of the reasons I went was I was thinking the tether guys might come. I mean, bankman-fried is by some measures their biggest customer. Giancarlo has a house in the Bahamas.

00:34:49:09 - 00:35:16:05
Zeke Faux
All the big crypto traders are going to be there. I figured maybe it was worth a shot. Maybe he'd come. And as I described in the book, at first I was a little bit disappointed. I didn't see any tether representatives anywhere. But then I got a message from John Charlotte PIN, who very nicely was like, Hey, I'm actually J.L. Vanderbilt is at the conference.

00:35:16:08 - 00:35:47:19
Zeke Faux
Do you want to meet the CEO of Tether? And he gave me a little by this point. We were friendly and he gave me like a friendly, some friendly advice, which was like, they feel very attacked by the press. Be careful how you approach them. And then he's like, Come over right now. And I go into the I run down the hallway and he's standing next to this tall, handsome man with, silver hair, who And he I walk up to them.

00:35:47:22 - 00:36:11:17
Zeke Faux
John introduces me and he says, totally joking. But he says, like, don't screw this up or I'll kill you. At the moment I didn't laugh, but like I was a good line. Extend my hand to Vanderbilt and I'm like, Nice to meet you. Meet. And he says, The man who did it, who doesn't exist like he he knows about the rumors and like he enjoys them.

00:36:11:25 - 00:36:40:08
Zeke Faux
So we ended up sitting down me just me in jail. Vanderbilt For I'm going to say like 3 hours in like a little bar. And within this casino where the conference was. And it was like a really intense conversation and but I felt like it was just going in circles. And at this point, this is kind of funny in hindsight.

00:36:40:11 - 00:37:04:26
Zeke Faux
I had recently been to Sam Bankman-fried offices in the Bahamas. I spent like a couple of days there and Bankman-fried let me just sit next to him and I just would like chat with him while he's doing business. Like I'm reading his emails over his shoulder. I'm reading his Slack messages like he really put out this show that he had nothing to hide.

00:37:04:29 - 00:37:26:22
Zeke Faux
So I told Vanderbilt about this and I'm like, Why don't you if if everyone's making up all these lies about you, why not just like, come clean, show people what? The truth is, give an interview, like show people how your company is really run. And he said, Well, that's you know, that's so easy for Sam to do. You know, we've been here since the start.

00:37:26:22 - 00:37:45:05
Zeke Faux
Like we've had to take our lumps, you know, you don't know what we've been through. He just came in. He's like standing on our shoulders. And now it's easy for him to have a reporter over. Meanwhile, he actually had a reporter over while he was running what seems to be like one of the biggest frauds since Bernie Madoff.

00:37:45:11 - 00:38:11:16
Zeke Faux
Yeah, Vanderbilt. He really wanted to talk a lot about just like how he had been mistreated by the press, incorrect stories about him, people's. Why didn't I sort of like the world these days. Why don't we trust each other? And it was really like a strange conversation ocean and kind of like light on light on substance. And as you said, I tried to say.

00:38:11:18 - 00:38:31:10
Cas Piancey
Isn't that a weird thing for somebody involved in blockchain in general to be saying, Right. Like the whole the whole concept of Bitcoin is like about trust. Looseness is about like not trusting other people with money and finance. Like. And then he's like, Why don't we trust people? Like, I'm running this massive $80 billion stablecoin Why doesn't everybody just trust me?

00:38:31:13 - 00:38:33:16
Cas Piancey
Why do you think they don't? I don't know.

00:38:33:18 - 00:39:00:08
Zeke Faux
All right. Well, and the reason the reason is like you've made misrepresentations. Tether has made misrepresentations in the past about its backing. They haven't given us, like, reason to trust them. So they've kind of invited the scrutiny. And it was it was really bizarre. I was I was thrilled to meet them, but I felt like I'd gotten no closer to figuring out the truth about about him or about his company.

00:39:00:10 - 00:39:23:02
Cas Piancey
It's so and everything you were mentioning that he was saying is just so hypocritical to the way that he actually lives his his life as well. Like this dude has property in Hong Kong and like one of the most expensive parts of Hong Kong that there is. Like his family gets to travel the world all expenses paid like it's just wild to me that this guy is saying, like, I don't care about money.

00:39:23:02 - 00:39:38:17
Cas Piancey
People should trust us. Like, what's the big deal? And it's like, do you see the life that you're leading and how there's it's just the whole thing is wild to me again. Like, I just think everyone needs to read it, read your book because these things are crazy.

00:39:38:17 - 00:40:15:27
Zeke Faux
I mean, that's like the crypto world, but no other industry with these people rise to the top where you have like Brock Pierce, like the child actor becoming like a crypto prophet, traveling the world, like one of the most prominent spokespeople for crypto. Like if you go back and look at all the people my first crypto conference was Bitcoin 2021 in Miami and my one of the people, one of the first people I met there was Alex Mashinsky who is running Celsius, and we sat down for an interview.

00:40:15:27 - 00:40:27:09
Zeke Faux
I hadn't really done much, much prep work and all I knew was that he ran a crypto company and there were some ties to Tether so he could maybe help me out with some info on tether.

00:40:27:09 - 00:40:28:28
Cas Piancey
An investment by tether.

00:40:29:02 - 00:40:45:28
Zeke Faux
Yes, I knew that tether had invested in Celsius, so I figured he at least knew the tether. People and I promise this is going to relate to what I was talking about, but I'm like a polite guy. So before I get into like, my questions, I'm like, Hey, Alex, can you tell me a little bit about your crypto company Celsius?

00:40:46:01 - 00:41:08:03
Zeke Faux
And he's like, Well, if you give us your crypto, we'll pay you really high yields like ten or 20%. But if you want a loan, we lend to you at like 0%. So like that's the opposite of banking. That's the way to lose money. Like you, you pay people tons of money, but you don't earn any money. And like he had a lot of.

00:41:08:06 - 00:41:29:09
Zeke Faux
So I'm just sitting here. I'm like, all right, this I mean, look, the conference was full of dumb ideas. So I'm like, All right, here's another one. So how much how much do you manage thinking it's not going to be like it's going to be pretty low and was like, oh, like $20 billion? And I'm like, oh my God.

00:41:29:12 - 00:42:12:14
Zeke Faux
And the guy's on paper. He was a billionaire and he's sitting there with this like sales pitch that like to me, you know, I wouldn't buy like a, you know, a new mop from him on Home Shopping Network or whatever. In crypto. There were these people with these crazy back stories, with these crazy personas who rose to the top and for like, I feel like people have sort of forgotten, but for like a couple of years, these people were treated not on not a crypto critics corner, but in like a lot of the media and in Washington and with capitalists, these people were treated like they this was maybe the future of finance and that

00:42:12:14 - 00:42:33:29
Zeke Faux
these were like really legit, respectable companies. And like time and again when I would look behind the curtain, investigate the companies a little bit, I would just find that like there wasn't anything there. Like it was not the craze. The great innovation that they were claiming was not was not there.

00:42:34:02 - 00:42:59:09
Bennett Tomlin
What was interesting to me is that through a lot of your book, lying is kind of a theme. The very first beginning of the Prolog opens with Sam Bankman-fried saying, I'm not going to lie when he's talking to you before immediately launching into a series of lies. You talk about how Alex Moshinsky once said, Somebody is lying either the bank is lying or Celsius is lying.

00:42:59:12 - 00:43:24:07
Bennett Tomlin
And even Vanderbilt, despite not being willing to tell you whatever was the big secret in the past, said once you start to lie, sooner or later it will come back to bite you. What were some of the challenges and experience you had covering this story, this industry, where so many participants were willing and ready to lie about everything straight to your face?

00:43:24:12 - 00:43:44:02
Zeke Faux
You know what? As a writer, what I love is when people will talk to me. You can say what you want. I just want to hang out and see how your I observe you at work, see what your life is like, and so that I can tell the story of like what I saw as a really exciting time in history.

00:43:44:05 - 00:44:14:09
Zeke Faux
This brings up a maxim that I heard called the Bullshit Symmetry Principle. It was created by like this Italian programmer. This was kind of the challenge. And what he says is that it's much easier that the amount of energy needed to create bullshit is orders of magnitude lower than the amount of energy needed to correct the bullshit. So what that means is that, like I could go to this crypto conference, they just bring in people I'd meet them.

00:44:14:16 - 00:44:37:18
Zeke Faux
Each one of them tells me this like crazy story about their coin and how great it is. Like there's enough time in my life to investigate all of these coins. And when so many of the ideas are so flimsy, it's very hard to you can't investigate them the way you would investigate like a crooked lending company, which is something that I would do in the past.

00:44:37:25 - 00:45:05:01
Zeke Faux
Like how do you investigate step in, which is like you buy these digital shoes and we pay you green Satoshi tokens. If you walk around wearing your digital shoes like there's almost like nothing to investigate there. And yet people are making like tons of money on these schemes. And in fact, people were getting like sucked into it and losing lots, you know, regular people were.

00:45:05:04 - 00:45:24:00
Bennett Tomlin
And what you're talking about there, I remember Cass and I finally did our episode on Terra like three weeks before collapse, but for like three and a half months before that, since I had published my big research report on it, I'd been like, This thing's really big and we should talk about it. And Cass kept going, This is to stupid to talk about this.

00:45:24:01 - 00:45:29:29
Bennett Tomlin
And their entire thing is like, pointless and obviously flood. What are we going to talk about?

00:45:30:01 - 00:45:50:23
Cas Piancey
And then and that's not even that's that's not even like we had been told about Luna and years before it became a large, gigantic thing, an auditor friend of us, of ours like specifically had come to us and been like, Look at this crazy idea for a Stablecoin don't you guys think this is crazy? And we both were like, Yeah, sounds totally insane.

00:45:50:23 - 00:46:16:00
Cas Piancey
Like everything else in the cryptocurrency industry, like, whatever. But I think what I briefly just want to mention here is that you bring up this idea that like the Internet has or like new forms of communication and stuff and all of this have like created this atmosphere of like lying, being like, you can't match the bullshit, but I don't even know if that's true, because I think this is like, this is such an old issue.

00:46:16:05 - 00:46:35:09
Cas Piancey
This is something from like the 1800s, 1700s where you go back and you find these quotes like falsehood flies and truth comes limping after it, right? Like these This is known stuff where people are like, people will just bullshit you until they are forced to tell you the truth. As Bennett was saying. How did you cut through the bullshit?

00:46:35:09 - 00:46:44:23
Cas Piancey
I'm like, I'm just. I want to know how. I want to know how you were able to Were you able to sometimes. Were you just like I get I guess I just have to believe the lies for now.

00:46:44:24 - 00:47:07:23
Zeke Faux
I can't say that I was that I was always able to. And like Tara Luna is a good example. I would like you. I had heard like, Oh, this one is like a fishy one. You might want to look into it, but it was like, so fishy on its face. It was kind of hard to figure out. Like as a reporter, if you're writing an exposé, you want to bring forward like new facts that are going to change people's minds.

00:47:07:25 - 00:47:31:04
Zeke Faux
And in like the crypto world, people are already so ready to believe and they're so bought in that like, what is it that's going to change? What is this new information that you have that they really want to hear? Like I wrote a story that was before maybe like six months before Celsius failed, that it wasn't like the toughest story, but it said like, hey, there's a lot of red flags.

00:47:31:10 - 00:48:00:08
Zeke Faux
There's questions about how they make their money. This guy has a sketchy past, and it was totally ignored. Like nobody, nobody cared. And that's because, like the people that invested in Celsius were real believers. They didn't care. And the people who didn't invest in Celsius kind of like had already dismissed it as something they don't care about. I would say one thing that was effective talking with crypto guys is I would often ask like, Hey, where are people using this in the real world?

00:48:00:15 - 00:48:20:07
Zeke Faux
Like, how can I try this out? Let me try your product, let me find me. Can I interview people who use your product? And like I think that cut through a lot of it. Crypto guys love to talk about like Bitcoin and El Salvador and like you go there, you talk to Salvador Salvadoran people and they're like, What?

00:48:20:09 - 00:48:48:21
Zeke Faux
Like, No, we don't use bitcoin. Why would we do that? What are you even talking about? Like Axie Infinity was this crypto game that everyone was talking about is like the future, the best example of Web3 and then you actually go to the real world. I went to the Philippines. I talked with people who had invested like their savings, like real amounts of their savings into this crypto game, like taxi drivers, social workers, regular people and and lost it, you know.

00:48:48:23 - 00:49:02:28
Zeke Faux
So I think like because it's easy to make these crypto these crypto startups like sound cool a lot of the ideas sound great on paper, but I'm like, let's judge by the results like, what are you doing? What are you doing right now? How can I see this in use?

00:49:02:28 - 00:49:24:20
Bennett Tomlin
I think you really kind of nailed this sentiment in the book when you had the line a journalist composing a painstaking exposé of a crypto scam seemed like a restaurant critic writing a takedown of Taco Bell, which is a feeling I've had at times when I'm like, digging into whatever the dumbest new coin is. And I'm like, Well, this is really dumb for all these reasons, but everyone involved seems to believe it's dumb.

00:49:24:28 - 00:49:48:16
Bennett Tomlin
They're all bragging about how dumb it is on Twitter. So what am I even saying? And like, I think this was even compounded for me and some of the like crypto events you went to, you talked about going to I think it was a Brock Pierce party in Puerto Rico where a James Cook topless of Typhon Capital Management was discussing Donald Trump's Donald Trump Jr's promotion of Let's go Brandon Coyne And when you ask like, is that allowed?

00:49:48:16 - 00:50:11:23
Bennett Tomlin
Is that a thing they should or can be doing? And his response was just they're allowed to make money, fuck the SCC and it just kind Yeah. And like throughout many of these events there was kind of the or another where on the yacht there was one of the attendees who was joking about it, joking with another attendee about a scam they specifically were running like in the social circles of crypto that you were kind of moving through to write this book.

00:50:11:29 - 00:50:21:08
Bennett Tomlin
There seemed to be almost a textured acceptance that there colleagues and friends were running scams. How did that kind of affect your story going through this?

00:50:21:08 - 00:50:43:06
Zeke Faux
I should say the comments by James, I just overheard those I had not asked him any questions. You know, I would say that the most common sentiment when people were talking to me was they would be like, yes, like 90% of crypto is a scam, but mine is good. And now I'm looking back on it. I'm like, the people who told me that are in jail.

00:50:43:09 - 00:51:01:26
Zeke Faux
I just feel like the the hunt for this like great crypto coin is not is not worth it. Like we've just a track record is that so many of them have turned out badly and have made lots of money for insiders but none for the people who, you know, come in late?

00:51:01:27 - 00:51:22:16
Bennett Tomlin
Well, I think that was actually one of the more powerful pieces of framing in the book, is you start with the story of one of your friends who calls you to tell you they invested, I'm assuming, a disposable portion of their wealth dogecoin, and we're playing around with that. And then that was kind of part of your impetus to look into some of this and to understand this industry.

00:51:22:22 - 00:51:45:22
Bennett Tomlin
But as you go through it, you move from kind of that first world type of gambling into human trafficking, effectively slavery. These communities in the Philippines that were effectively gutted by believing in these play to earn promises and these things like that, people in El Salvador who were sold a false promise of the ability of Bitcoin save their country's finances.

00:51:45:24 - 00:52:00:15
Bennett Tomlin
How did kind of that part of the story starting at kind of like what I think of as this more milquetoast, mundane, first world kind of gambling type into more of these like gross human rights abuses affect your view of crypto as you wrote this story?

00:52:00:16 - 00:52:30:26
Zeke Faux
I mean, it it was really surprising for me, like I thought of it like you said it, it seemed like kind of this weird offshore casino and but yeah, as I got deeper into it, I saw that it was having these effects in the real world. What really struck me was that the people who are talking about it, who are promoting it so confidently, it seemed like they really had no idea what was going on in these other countries.

00:52:31:00 - 00:52:52:24
Zeke Faux
You remember like Axie Infinity talked this up like it was great. And then once it failed, you just didn't hear about it anymore. It was like totally memory holed or somehow they still maintain that like people in El Salvador love Bitcoin and like anybody who went there would see that Nobody. Nobody's using it. It's not a thing. I mean, the Cambodia part was really upsetting.

00:52:53:01 - 00:53:19:00
Zeke Faux
And I spoke to a police officer from Taiwan who had spent his career working on like human trafficking type cases. And he said that some of these human trafficking scammers now were using tether to buy and sell their victims like these workers are sold to other compounds. And he was like, yeah, it makes it like a lot harder for me to track with like a bank.

00:53:19:01 - 00:53:35:21
Zeke Faux
You would have some leads. These crypto currency is like, I don't know how to investigate it. So I felt like if you are creating these like companies that are having such a big impact around the world, it's your responsibility to learn about what's really going on and how it's being used.

00:53:35:28 - 00:54:00:01
Cas Piancey
What are your expectations now and at night? We've had some discussions lately about the future of cryptocurrency and our place in it. And and we've I think we both settled on it will exist indefinitely as far as we can both tell, at least in some niche form regardless. But I'm curious what your thoughts are like. What do you think is next?

00:54:00:07 - 00:54:39:06
Zeke Faux
I don't think we'll ever see a bubble like the one that we just saw. It depends on new people coming in and putting in their real money like that's what's turning this. Like Brock Pierce, if he's a billionaire or like Sam Beckman freed into billionaires and like, who is going to end the appeal of crypto despite what a lot of people say, I think for most people the appeal is like, I'm going to buy some coin and then it'll double and I'll I'll make a lot of money and like I think it's lost that appeal now that nearly like every coin has crashed and a lot of the biggest companies have been revealed to be

00:54:39:06 - 00:54:58:25
Zeke Faux
frauds. So it's hard for me to imagine it just coming back the way that I think a lot of crypto promoters hope that it will. Like. I still follow all these guys on Twitter and like people are trying to make what's it called like Harry Potter, Shiba Inu, Sonic Obama ten coins happen you see in this one?

00:54:59:03 - 00:54:59:20
Cas Piancey
Yeah.

00:54:59:22 - 00:55:04:06
Bennett Tomlin
I try to say it disconnected from that type of thing for my own health and safety.

00:55:04:08 - 00:55:22:22
Zeke Faux
Like their efforts are so, are so weak now. I just can't see this ever being replicated. I feel like you'd need a new story to tell people that would draw people in instead of just being like, Oh, this time crypto is going to work out great for you, time to time to invest.

00:55:22:27 - 00:55:41:16
Cas Piancey
I don't know if you know Liz Pardo. She's a friend of the show. She's over at The Verge. She's fantastic, wonderful journalist. But she had a similar take as you where she just said so many people got burned this last time and have come away with the mindset of, Oh, it's all a scam regardless of whether it is or not.

00:55:41:18 - 00:55:59:04
Cas Piancey
Like that has been the takeaway for a lot of retail investors and they're just like, How do you come back from that? It's really hard. It's really difficult to come back from people being like, Oh, okay, well, I think this is a scam. Why would they ever go back to it then? Right? And it's like, I don't know, that's a good question.

00:55:59:04 - 00:56:05:28
Cas Piancey
And like, I think it's a fair I think it's a pretty fair characterization of like where we are right now.

00:56:05:29 - 00:56:31:24
Zeke Faux
One thing that's amazing to me, one of my favorite crypto areas that I wrote about in the book was Nfts and the Board Yacht Club. These are like the monkey JPEGs that Justin Bieber and other celebrities bought for, like supposedly for hundreds of thousands of dollars. I mean, people were paying like huge money for these kind of ugly derivative cartoons of monkeys wearing costumes.

00:56:31:26 - 00:56:52:11
Zeke Faux
And like in the book, I talk about going to Ape Fest, which was like a weeklong party holders of these monkey tokens, which was truly bizarre. It's not surprising to me that the price of bored apes has collapsed. But yeah, it's actually still pretty high. They come a board ape now. They still go for like.

00:56:52:13 - 00:56:56:27
Cas Piancey
Like a significant amount. Yeah, yeah. 40, 40, 40,000.

00:56:57:00 - 00:57:13:01
Bennett Tomlin
40 k Which is funny to me because at the time when you were going to ape first, you wrote that you were ready to spend about $40,000 on a mutant ape because bored apes at the time were running above 200 K and now you could get a board for what you were willing to spend on a mutant ape at that.

00:57:13:01 - 00:57:32:25
Zeke Faux
Point. I know I could. I could have like, a really good ape now for my budget because I this is like, this was actually the most extreme adventure in the book. People were kept teasing me in crypto world. They're like, How do you know about crypto? You don't even have any. And it started to get to me and I was like, You know what?

00:57:32:28 - 00:57:52:27
Zeke Faux
Maybe I am missing something. I got it. I got to try it out for myself. And at the time I felt like the most legit thing to do would be to get one of these bored apes. But I'm not like a gambling guy and, you know, so I went to tell my wife and I was like, Hey, I have to talk to you about something for this book.

00:57:53:02 - 00:58:12:07
Zeke Faux
I think I need to buy an NFT and, you know, it's it's called Bored Apes. A lot of celebrities have them, but it's kind of expensive. And I think I asked for her to like guess how much it might be. And she's like, obviously knows it's going to be a lot because like, we're sitting down and she's like, I don't know, like $5,000.

00:58:12:07 - 00:58:45:11
Zeke Faux
And I'm like, actually the cheapest ones are $40,000. And she was just like, What? But she was Nicki, my wife was like really supportive of this whole project and saw the importance of this and said, All right, you got to try it out. So I got one I made by the time I went to go buy one, the price had actually crashed, so I was able to get one for 20,000, which was kind of cool, but also a bit scary that it had just gone down 50% in like a couple of weeks.

00:58:45:13 - 00:59:06:01
Zeke Faux
But I actually found this. I don't know if you guys will agree with me, but I found this to be one of the most revealing parts of looking into crypto, like trying to buy this board. Ape was just so hard and so annoying and like signing up for metamask and transferring the money, buying Ethereum like at several points.

00:59:06:01 - 00:59:32:04
Zeke Faux
I thought all my money was probably lost and I was like, all of these people who are out promoting this as like the future of money, the future of art, have they even tried to do it because like, this will never see mainstream adoption. This is horrible. Like if you don't know how it works, like essentially your metamask is like a browser extension and if you like, if you lose the password to it, it's gone forever.

00:59:32:06 - 00:59:58:27
Zeke Faux
You have to keep track of all these like addresses and codes and like your money is basically held out to like send $20,000 to like this tiny fox icon in my browser. I'm getting like anxious just I can see it now on the side of my screen. It's just like bringing back bad memories. But like the idea that people would regular people would want to do this makes no sense.

00:59:58:27 - 01:00:05:18
Zeke Faux
The only reason you would do it is if you thought, All right, this is pretty weird. But like my friends getting rich off it and I can too.

01:00:05:18 - 01:00:24:02
Bennett Tomlin
What was really striking to me about that whole section was the entire pitch was about how nfts are going to be the future nfts with the basis of the ape fest, you go out and purchase this and then realize that the NFT alone isn't sufficient for you to get in. You have to go through this other like ownership verification process.

01:00:24:04 - 01:00:43:27
Bennett Tomlin
And as you're going through, you write about how you invented a whole back story for your eight doctor scrum so that you would more easily be able to fit in with this community of apes. And then as you arrived, you mentioned that no one ever asked to see your ape or the story of your ape or anything about tree whatsoever at eight Fest, which for me was kind striking.

01:00:43:27 - 01:00:58:27
Bennett Tomlin
And when you're ape did come up, it was often other people telling you that they're apes were much better than your ape and you actually had a bad day and you should really get a different eight. Yeah. Which is just a fascinating part of this like how your investment that build itself on community.

01:00:59:03 - 01:01:20:08
Zeke Faux
It was really sad. I had a great funny story about my 20,000 a doctor scum who would smoke weed to give himself superpowers. And he was a detective and I was ready to bond with all the other people about it. But night people would only just politely pretend to be interested, and no one wanted to hear about Doctor scum.

01:01:20:10 - 01:01:45:09
Zeke Faux
Yeah, a lot of I met teenagers who had way better apes. A lot of people who were like, drunk and high. And I met I met the founders of the Port Ape Yacht Club, but even though I was in the club, they wouldn't talk to me. And I met I met Jimmy Fallon, who said he was there for the community but was standing in the back with like behind the his security guards and did not really want to engage with me.

01:01:45:09 - 01:02:05:06
Zeke Faux
When I tried to talk to him about how he was promoting something that people are losing, like real sums of money on Jimmy Fallon, I should say. Like he's the late night host. He had Paris Hilton on his show and they did this like really cringe segment. Got it about their bored apes. I jumped in.

01:02:05:09 - 01:02:07:23
Speaker 4
I know. I heard. I'm so happy I taught you what they were.

01:02:07:24 - 01:02:08:06
Cas Piancey
You did.

01:02:08:06 - 01:02:10:17
Zeke Faux
You taught me what's up? And then I bought an ape.

01:02:10:20 - 01:02:18:00
Speaker 4
I got an ape too, because I saw you on the show with people and you said you got a moon pass. So I went and I copied you and did the same thing you did.

01:02:18:03 - 01:02:18:20
Bennett Tomlin
This is your.

01:02:18:27 - 01:02:21:16
Cas Piancey
This ape. We gave you this really cool.

01:02:21:19 - 01:02:29:24
Zeke Faux
But like, I think that was actually influential. Like, I like, I think that really helped bought apes reached the next level but the price.

01:02:29:24 - 01:02:30:05
Cas Piancey
Go up.

01:02:30:07 - 01:02:31:10
Zeke Faux
After that.

01:02:31:13 - 01:02:34:17
Cas Piancey
Did the price go up after that interview? Yeah. I'm actually curious.

01:02:34:20 - 01:02:38:19
Bennett Tomlin
About moon pay and CAA were doing their whole big like thing at that.

01:02:38:19 - 01:02:39:09
Cas Piancey
Moon pay.

01:02:39:09 - 01:02:50:23
Bennett Tomlin
Certainly health board at Pretties for Davidson just Island and Hilton. But like Ryan at that point was doing it to Steph Curry had gotten his like a month ago there was a lot of them who were moving at that.

01:02:50:23 - 01:03:20:14
Zeke Faux
Yeah I actually I thought this was really crazy. I was surprised this didn't make the news at the time, But I think they're just like, well, they wouldn't let reporters into it. First. You had to have the ape. Although my research my research assistant personally had no trouble getting a free pass from some guy outside. Yeah. So at first Snoop performed he performed a song that was like essentially the chorus was like by Ape Coin, which is like the official cryptocurrency of board apes.

01:03:20:16 - 01:03:41:06
Zeke Faux
And first of all, I was like, I think I should buy ape going. Like, this is going to move the market. Snoop's like, endorsing ape coin and like the chorus that's like Dogecoin doesn't have that. But also I thought that people there would be like some outrage around him shilling this investment publicly. But it really flew under the radar.

01:03:41:09 - 01:03:46:22
Zeke Faux
I think that song just never took off. Maybe. I mean, I'm not sure if he ever really released it officially.

01:03:46:25 - 01:03:50:00
Bennett Tomlin
I think that might have been a convention exclusive. You saw.

01:03:50:02 - 01:03:51:05
Cas Piancey
Yeah, lucky you.

01:03:51:05 - 01:04:00:10
Bennett Tomlin
But as you mentioned, there was as part of one of the lawsuits against UGA labs, there's an allegation that Snoop owns an equity stake in UGA, right?

01:04:00:10 - 01:04:24:18
Zeke Faux
Yes. And I don't think he's disputed that, but I'm not sure. Like I'm of the age where, like Snoop and Eminem are like the coolest guys around some of my favorite rappers. Right. So I found it like and Eminem has like, I feel like he has not really sold out right? Like he's he's kind of like he speaks out when he thinks something about politics.

01:04:24:21 - 01:04:43:01
Zeke Faux
So where Snoop, I mean, he does a lot of ads, but like, I found it kind of depressing to see them on stage promoting bored apes. So it's almost like a relief for me to learn that, like Snoop had an equity stake in UGA labs and that explained it. He wasn't like a real board, a pad. I mean, maybe he is.

01:04:43:01 - 01:04:43:17
Zeke Faux
I don't know.

01:04:43:20 - 01:04:46:05
Cas Piancey
You're so glad that he's just a normal shill.

01:04:46:09 - 01:04:57:12
Bennett Tomlin
There is that thing with that one. NFT, NAFTA, consumer demands each year. Whatever said they were, Snoop pretended to be Snoop was run by Snoop's assistant. Some weird thing with that like a year and a half ago, right?

01:04:57:18 - 01:05:08:10
Zeke Faux
Oh, I totally missed that. I thought that was just like one of these non NFT collectors who built some like $10 million collection. That's probably, you know, not worth a lot less.

01:05:08:12 - 01:05:38:06
Cas Piancey
I think we're running out of time here. I think we could probably talk about all of the insane stories in your in your book number go up for hours and hours and hours, but I think we should call it here. Zeke, is there anything like you would like to leave us with in terms of like your experience writing this book or what it means to you, or if you think there's, you know, more stories that need to be told in crypto?

01:05:38:06 - 01:05:41:20
Cas Piancey
I don't know. Whatever you want to talk about to send us off here.

01:05:41:25 - 01:06:16:13
Zeke Faux
I think one day we're going to need to our grandkids are going to be like, Grandpa, why did Justin Bieber pay $1,000,000 for that mock monkey cartoon and number go up is like, that's the answer. Like, oh, we're going to pick up a copy. It's going to like explain this whole mania and help you remember all of these like, crazy characters who got super rich off the stupidest bubble of all.

01:06:16:16 - 01:06:21:20
Cas Piancey
Well, fantastic. Thank you, Zeke. It's been memorable and wonderful to have you on.

01:06:21:22 - 01:06:33:00
Bennett Tomlin
And everyone makes guys and everyone make sure to check out number go up. I will echo Carson saying this is absolutely one of the best cryptocurrency books I've ever read and I'll give it an unequivocal recommendation.

01:06:33:02 - 01:06:35:24
Cas Piancey
Thank you. 12 out of ten number.

01:06:35:24 - 01:06:42:22
Zeke Faux
Going back to the good work guys, I always like, really like following all the leads that you dig up.

01:06:42:24 - 01:06:45:07
Cas Piancey
Thank you. We thank you so much.
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8 responses to “Episode 127 – Let’s talk about Number Go Up with Zeke Faux”

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