YouSaid · the spoken record

Ben McKenzie

lines on the record: 59
first: 2023-06-29
most recent: 2023-06-29
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“While I filmed a lot of these conversations, so I'm working on a documentary. And yeah, I don't know. I mean, I've had such a blast on this book. It's been such an adventure. I think the best part, I know it's cliche, but it's really the people I've met, especially the skeptics. Skeptics are just a great group of eccentric, wonderful, you know, nerds. It's just fun. And it's opened up my view of the world. I just have this much more, I just understand, I think. I'm not saying I just have a much more varied experience in the world, right? Like it's really been an adventure. So, yeah, I don't know what the next book is, but I really appreciate that everyone asks you that just as soon as your first book. That's not even out here.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it has utility for gambling. I mean, you can gamble on anything, so I don't think that makes it unique, but it has utility as a gambling device, and it has utility to facilitate crime because you can use it for money laundering and avoiding capital controls, tax evasion, sanctions evasion, whatever. And I understand that there's an argument like, well, some of that's good, right? We don't like some of these authoritarian governments. Okay, sure, but also if it goes that way, it also has to go the other way, right? If the good guys can use it, the bad guys can use it. Yeah, I just, yeah, I don't know how else to answer that question.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“So it can handle a lot of power. Know in 2021 the Bitcoin network and other cryptocurrencies used the energy equivalent of Argentina, the entire country. That's a problem if you view it as I do as a zero-sum game. It's not doing anything productive and yet you're using a lot of energy. So on one level, you could make the argument, oh, you're more pure, you're more decentralized. But in terms of stepping back for the rest of us, Why should why should this not be taxed at an extraordinary level?”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Should buy the original crypto. Exactly, exactly. Not a cult. I think, you know what? So that's the flippant answer. On one level, there is some truth in the sense that Bitcoin is more decentralized by nature of the proof of work, but that cuts the other way too. Because of course, proof of work means it can't scale. Bitcoin can only process five to seven transactions a second. It hits a limit. It hits what's called a red queen's race where like you're using more and more energy depending on how many competitors are there. The more competitors come in, the more energy is expended for the same block. So, you know, it's like what the queen says to Alice, right? You got to run twice as fast to get anywhere. Also, because of that energy usage, it has an environmental problem. I mean, I went to the biggest crypto mine in the country. It's outside of my hometown of Austin, Rockdale, Texas. It took over a former alcohol aluminum smelting plant. And the reason it took that over is because it's connected to the grid.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“You're a member of a community. You're going to be reborn to land of the free. Strange to characterize a financial relationship, especially with people you don't even know, right? I mean, so much of this stuff is done online and through pseudonymous accounts, that's at your community. I'm not saying people don't find community. What's interesting is some of the strongest communities I've found are the participants in the class action lawsuits against companies that have allegedly defrauded them. Because they're bound by the fact that they had a similar experience, where they had a lot of high hopes and then they were let down.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and that's where I think you get into a multilevel marketing scheme. The abuse of language is similar. The way that they're sort of twisting words and trying to create a pressure-filled environment where you feel like FOMO, you're going to miss out. If you don't invest now, really quick, you got to really quickly invest in the future of money because otherwise you're not going to get in there. Which is bizarre. But those tactics are very similar. And I would say here's the thing that's a big tell to me. The use of the word community. Use of the word community is just fascinating. You're not an investor. You're not a client.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Were the signs They're really strong parallels. So maybe crypto is maybe Bitcoin was set up to be this emancipatory new form of peer-to-peer currency. Or maybe it was literally online gambling 2 A way of moving money overseas and using it to facilitate”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Daniel Friedberg also worked at Skapsa. He was FTX's lawyer. I think he then became their chief regulatory officer or something like that. Interesting”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So in the original code that became the Bitcoin white paper code, there's a poker lobby. So whoever Satoshi Nakamoto is, was, whoever they are, we do know they were interested in poker. At the similar time to when the Bitcoin white paper came out, online poker was about to get crushed. It had moved overseas. All these online poker rooms had been set up and eventually the government got around to shutting him down on what's become famous as Black Friday in online poker. And it was because they were treating their customers. There's a company called Ultimate Bet that had a secret god mode where insiders could see the other players' cards. The compliance officer for the holding company, Escapsa. Of ultimate bet is a guy named Stuart Stuart Hogner. He's now Tethers General Counsel. Daniel Friedberg also.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“And unlike Vegas, where there's entertainment value, you can get comps and drinks, have a dinner, see a show, crypto's like Vegas without the drinks, the dinner, or the show. So you're going to lose. You're going to lose. 99% of people are going to”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“And money's gone. It is treatable. It is a very treatable addiction, but you have to take some pretty serious measures sometimes and remove the ability to make the trades and to actually access the accounts. So yeah, not to turn it into a bummer, but like I really think we need to talk about these things because the marketing was, of course, the exact opposite. It was all the shiny stuff and all the amazing things. But when you come down to it, economically speaking, crypto is a zero-sum game. It's poker because it doesn't do anything productive. It's strictly competitive for someone to win, someone else has to lose, but it's not a fair game, you're not playing in a rate, you're not playing in Vegas now, you're playing in Vegas in the 50s when the mafia ran it. You know what I mean?”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“I believe we need to look at some of these things through the lens of how much social harm they can do. Gambling addiction, I've heard from several people, has the highest rate of suicide of all the addictions. It's much easier to hide because all you need is a phone in a few minutes or even seconds to make some trades. And so by the time families find out about the predicament that usually their son or husband partner is in, it can be too late.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“And everything down to teenagers, I mean, parents coming in with their teenagers saying they're gambling away, their minimum wage job, you know, their summer job paycheck on this stuff. And that's where it gets into the casino capitalism. That's why I want the book to be about more than just crypto. Because I do worry that we are, Keynes said this actually, you know, when I won't try to quote him exactly, but basically when you turn the nation's capital into capital markets into a casino, you know, the job is likely to be ill done. You are not servicing an effective use of capital.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“42% of men 18 to 29 have purchased used, bought cryptocurrency. That's a big number, almost half. It's gamified, right? The apps are very similar-ish to Robin Hood, but unregulated. And it's easy to hide from friends and family. I mean, gambling, addiction, we talk to some gambling experts for this. And they told us that it's a husband, wife, they run a boutique firm in Brooklyn, but that services a lot of Wall Street clients. And so they're treating all kinds of addictions. But they saw a trickle during the last craze of 2018, 2017, but they saw a tsunami recently. And it was all men under 40. Some of them are sophisticated Wall Street guys, sophisticated people that really know their stuff about all sorts of other financial stuff, but have gotten drawn in.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“intoxicating pitch sales pitch that's why Schiller talks about these narratives and He compares them to viruses. You have to study the epidemiology of them. And we kind of have to reach herd immunity here, which I think we kind of are getting to now in crypto. But it's also very sad because I tell a story at the end of the book about a particular case. It's pretty rough. But you are also getting into gambling addiction. I mean, let's be honest. It's young men.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“It's everybody. I mean, it's really fascinating. Like, you could interview, and I did, I interviewed everyone from kind of regular traders. I walked around the Bitcoin conference in Miami last year just talking to random people. And then, of course, there are more sophisticated players. There are hedge funds. There are high-frequency trading firms, things like that. And then there are the sort of the core players, which were Sam and CZ and, you know, the folks that are kind of facilitating these transactions. So amongst the kind of the regular folks, again, I kind of go back to this point of like crypto just becomes whatever you want it to become, right? It's like, it's a way of you expressing your freedom, your, you know, get off the shackles of TradFi and like find your own, create your own financial destiny kind of stuff. And I get that. That is such.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“As a quarter of the budget of the SEC. So there's a lot of blame to go around, I would say. But in the defense of regulators, it does take time to build cases to argue these in the House for Coral Law.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Here's what I'll say crypto has exploited a gray area between how we classify commodities and securities. I do think this is a problem. We are the only country in the world that separates our commodities regulation from our securities regulation in the way that we do. We have two different agencies. They are overseen by different committees in both the House and the Senate. That creates really bad incentives. armchair economist that's very bad incentive-wise, right? People want to get on, politicians want to get on, elected members want to get on those committees to oversee the industries, but also to get donations, right? And the regulators are fighting for turf, sometimes friendly, sometimes not. The crypto industry really, really wants the CFDC to be in charge. The CFDC is the smaller agency. It's about a quarter of the budget.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“You can say the SEC hasn't been as aggressive as it should have been, and I don't disagree with that. I think the politics are interesting. I mean, people are now very angry Gary Gensler in the crypto industry. And they're angry that he allowed Coinbase to go public. Coinbase was listed on April 14th, 2021. Gary Gensler assumed office on April 17th of 2021. Say what you will about Gensler, but he does not have a time machine. So look.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I believe it was 2014 when the CFTC commissioner, Timothy Massad, asserted CFTC control over Bitcoin, said because futures were being traded and under the CEA, the commodity exchange act 1936, they could argue that Bitcoin is a commodity. Okay, so that already creates a little bit of a gray area, right? Because if Bitcoin's a commodity, but these 20 other thousand 20,000 other cryptos came into existence what are they?”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, yes, yes. Instead, it was magic boxes out of which money comes. And Matt correctly said that sounds like a Ponzi scheme. I think Sam laughed. I don't know what happened after that, but it's really strange for me. I mean, I got an ego and stuff, but I'm just, I have an undergraduate degree. I'm an actor. I've just been looking at this for a couple years and I'm here sitting talking to the supposed JP Morgan of crypto. Can he give me one satisfying answer? Can we get one moment where we could kind of, I could see how this was going to work? I left basically with a lot of questions, but they were all the same one. What the fuck was that all about? Like, what was that? It was really weird.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that was very informative. So, I mean, if you don't mind, I'm just going to, you know, so in the spring of that year, he had been on your podcast with Matt Levine, and he talked about, I believe it was magic boxes out of which money comes.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“And he froze and he turned his seed and doing the stuff. And he's kind of a twitchy guy. And I get that. He's got ADD. I'm not trying to. But it was weird. And he wouldn't tell me. And at the time, I'm thinking, this is really strange because this information is public, right? I mean, we know he gave $40 million to Biden. We know his co-work gave $23 million to the Republicans. Like, why doesn't he just, and now, you know, what's alleged is that he was running a 93 million dollar straw donor scheme. So maybe, I don't know, maybe that was why. It was a really bizarre interview. It was really one of the most strange hours of my life.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, Solana was known as one of Sam's coins because he owned a lot of it. I think it was like a billion dollars worth of it when I went to Kabuo. Did he really believe in Solana, or was he trying to pump his bat? Like, what was that? Also, Solana has the unfortunate tendency to shut down. It just stops working. I think it stopped working at least a dozen times over the course of its history. So I found those answers very unsatisfying. You can't give me one company that's of any use in your industry. So there was those questions. And then there were questions about his donations, probably the most nervous I think he got seemingly was when he wanted to talk about his effective altruism. He was going to give his money away, pandemic preparedness, all that stuff. I said, how much money have you given to that stuff? He said, 50 to 100 million. Okay. How much have you given to politicians?”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“And it was going to be this huge boon to the economy. Well, nobody used it. It was a failure. It was a complete failure for a lot of the reasons that plagued crypto more broadly. The system didn't work. The Chi-Wa system, just like malfunctioned all the time. People got defrauded. People lost their money. And so they decided they would rather stick with traditional services. So according to the government's own figures, less than 2% of remittances use this system. So I just come from there and he's saying it's remittances. And I'm saying, Sam, baloney, BS. And then we went round and round and round. And when I came back to that same question, because the question was, give me one company. Give me one comment. Give me one comedy that's doing And he eventually told me Solana.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“I wanted to understand how he could explain cryptocurrency as good it did. I found that answer very unsatisfying. He said he kind of tried to duck it and then he went into remittances or sending payments between boarders. I had just come from El Salvador, the only country in the world trying to use crypto as real money. El Salvador's economy, the foundation, I would argue, of El Salvador's economy is remittances. A quarter of El Salvador's economy is people of Salvadorian descent who live in the United States two to three million of them sending money home. So the government had, you know, for reasons that we could go into. And another question had decided to set up a system, Chibo wallet, and it was suddenly going to bring in tourists, but it was going to be a way for the Savannah people to profit by or to not spend money on money gram and Western union traditional service.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“He was going to buy up that JPMorgan references referenced in 1907 when JP Morgan and his pals had to come in and kind of rescue the financial system from collapse. He was going to come in and buy all these companies that were failing, right? Like Celsius and BlockFine, all these companies. So that was a circumstance under which I interviewed him. Boy, I'll put it this way. The chapter devoted to that interview is entitled the Emperor is butt-ass naked. It was weird. It was really weird because I asked him some questions.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, our interview in person was interesting. It was July 20th, 2022. It was at a midtown hotel in Midtown right around here. At the time, crypto had done its sort of first crash, the May crash of Terra Luna. So it was seemingly on life support, but Sam was the golden boy, right? Sam was spending a lot of money on Capitol Hill. He was trying to get a particular piece of legislation through the AG Committee, the DCPA. He was meeting with the CFTC commissioner. I believe he met with him at least 10 times. And he was being called the JP Morgan of Crypto by none other than Anthony Scaramucci, the Buch, with whom he had a business relationship. Anyway, so”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“And it collapsed in spectacular fashion. And then there was this brief moment where CZ considered buying the company in a non-binding letter of intent, which of course was immediately transformed by certain members of the media into he was definitely going to buy the company. But of course it's a non-binding letter of intent. So 12 hours later, he said, no, I'm good.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Can I say shit show on the outcry? Yeah, it was a shit show. And CZ had this chip, which is that he owned. He had a lot of the FTT token. Sam had tried to separate himself from CZ. I believe, I think they fell out over a license in Malta that allegedly that CZ didn't want to fill out the paperwork or something. It's like, if you don't want to fill out the paperwork in Malta anyway, so they couldn't pay him real money. So they gave him some, I think, but he was mainly paid out in FTT, which gave him this chip to play, right? If he has a lot of the supply. So all of a sudden, there was a run on FTT. Sam's cohort, Caroline Ellison, tried to stop the bleeding by saying, buy all the FTT want at this price and CC said, no, let the market play out.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, I was talking to Sam. I interviewed Sam in July of last year, and then we continue to DM conversation through October. Things were clearly getting pretty bad. He talked of a stablecoin war with CZ and Binance. So there was clearly some animosity there. And then, yeah, I mean, what I know publicly, what's been presented publicly, is that Sam and his cohort Ryan Salem started kind of mocking CZ on Twitter saying, can CZ even come to this country, things like that? Because CZ is a Chinese Canadian. Pretty bold strategy. And then the balance sheet of Alameda leaked was reported by Coindesk, and it was, you know,”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“We won't go into it. Yeah, let's not go into that quite yet unless you want to. No, what there are are local affiliations, right? There's a Binance US was a Binance Australia, I think, all these places. Well, in the SUC. Lawsuit, they mentioned this Tai Chi document. So the Tai Chi document is this, allegedly a document, an internal document from Binance, basically, we're going to practice Tai Chi. We're going to set up locally compliant places like Binance U.S. that are going to play nice with the authorities and follow the rules. But the volume, we're going to push all the volume onto the main exchange. So redirect the regulator's energy towards the local shops. If that's true, then interesting strategy heretofore successful. I believe the yen of Sheng Peng Zhao's Tai Chi may make the yang of U.S. law enforcement, but I guess we'll see.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“It's absolutely crucial. Binance, I don't know today, but I believe actually it's still over half of the volume in crypto is spot volume trades through. And he funded things like FTX, he was an initial investor in FTX, and he's been very good at Binance Global has no headquarters. There is no Binance headquarters, which is a pretty neat trick because it becomes difficult to pen you down.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Sort of the next thing to kind of watch because they're clearly concerned that the money could be moved away and that the customers, US customers, couldn't get their money on.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“These are not honest markets. I don't know how else to say it. Given the amount of wash trading and God knows what other shenanigans, Sam in a Twitter space is somebody asked him, did you even make these trades? And he said, some of it, no. So that's a bucket chop, right? I mean, that's what that is. Bucket chops were made illegal in the 20s. In some senses, we are revisiting a century ago. So as to why it hasn't fallen apart and what it would take, I believe it would take law enforcement action to really kind of get to the bottom of where the actual real money is. We'll see if that happens. You're getting closer to, I mean, the season desist that the SEC issued to Binance to freeze their money, I think is.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Tether's a fascinating company. the CFO is paid a $65,000 settlement to Microsoft for software piracy. The CEO hasn't been seen in public in many years. That public face of the company is their CTO. The Wall Street Journal reported that as recently as 2019, four individuals controlled 86% of Tether. So it's this very, very small company. supposedly dealing in up to $80 billion. Yeah, I don't know how much more I should say, except that that's very suspicious. And it is incredible that they've survived, but they have deep ties to Sam and FTX and Alameda. And I guess we'll see what happens.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“The poker chips in the crypto casinos are tethers. Tether is the biggest stablecoin in crypto by an enormous amount. There's supposedly 80 plus billion tethers out there. The biggest client of Tether, according to Protos, is crypto publication, was Alameda Research. Alameda Research supposedly bought, I think it's $36.8 billion worth of Tether. How? How did that work? Alameda gave 36.8 billion real US dollars to Tether. That seems unlikely to be true, given that Alameda had raised a few billion from VCs and allegedly perhaps had stolen some money from their clients. But how did you get to 36.8? So how did it work? I don't know.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, exactly. So, right, so FTX had this token FTT. And I think you should, you know, let's just start with the obvious. You have an exchange that's issuing its own token, right? Its own security, basically, right? As Binance has the same, Binance has BNB. And it also has its own stablecoin, B-USD. So already you've got potential massive conflicts of interest, right? Imagine if the Nasdaq issued its own we were going to trade the stock, we're going to issue the stock, we're going to. And another thing that I think was sort of”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“It only moves in one direction. So it's a blockchain that can be added too but never subtracted from. So when Fit hits the Shan, there's nothing you can do. It just blows up. And if you combine that criminal activity, a lot of people lose a lot of money. But not as much money as his claim.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“When I testified to Congress in December, Professor Hillary Allen, Professor of American University, was on the other side with me testifying alongside me. She wrote a paper in February of 2022. So just a few months before crypto kind of fell apart. And she compared the dynamics of crypto to the subprime crisis. And they're very, very similar in many ways. Leverage, complexity, rigidity, plus a bank run equals a crash. The difference is in crypto, the leverage is unlimited because you can print as much crypto as you want. The complexity is similar. All of these things are so complicated, at least theoretically, right? Staking pools and protocols and smart contracts and blah, blah, blah, blah. The rigidity is even worse because of the things like the smart contracts and even the code itself.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Wash trading is an enormous part of cryptocurrency. I mean, you've seen it in the SEC charges against finance. I believe the allegation of their first or second day they were set up was that 99% of the volume in the first hour was wash trading, 70% on the first day. I've read papers, academic papers, that have surveyed, I think they surveyed 29 different exchanges. They found 70% wash trading on the unregulated exchanges. So it's just not there. People are able to create, I'm leaving Bitcoin aside for the moment and talking to the other cryptos. People are able to create as much crypto as they want. That allows you, if you can borrow against it,”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Most of the volume in crypto runs through the overseas exchanges, right? It ran through FTX before it was shut down. It's now running through Binance or Binance is the biggest crypto exchange by a country model. It's huge. But the question is how much of that volume is real.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. Yeah, and that's a very good point, and I do want to caveat it. If you're going through a licensed exchange, well, perhaps not a licensed exchange, but one that's operating as an exchange, then yeah, you're probably good. And if you're not trying to move a lot of money. Probably good. But the liquidity in crypto is very, very low. And Brian Brooks, who was the chief legal officer of Coinbase, and then he was the acting comptroll of the currency, and then he went to Binance US for like three months. He testified under oath to Congress about this. So, you know, you don't have to take my word for it again. Like the liquidity is very little. So how does it work?”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Isn't there speculation, it's leverage, it's all these other things. A chill ran through my, I mean, he said it sort of nonchalantly, but a chill ran through my spine because regular people don't understand that. I mean, they think when they buy Bitcoin, Bitcoin's whatever it is, 26, 27. I had no idea. They think they have $27,000. But in a way, they actually only have maybe 10 or 15% of that maybe if they can get it out. It's not.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“It's much, much, much smaller than that $1 trillion number for that market cap number. And you don't have to take my word for it. In March of 2022, I was at South by Southwest. It was my first venture into the real world. Jacob and I had done everything virtually up to that point. I ran into a guy named Alex Moszinski. Alex Moshevsky was the CEO of a crypto lending firm called Celsius. It's now bankrupt. He agreed to be interviewed. I asked him how much real money is in crypto. He didn't ask me what real money was. He said 10 to 15%. He said the rest is speculation. Now, in March of 2022, the crypto market cap was 1.8 trillion dollars. So, you know, give or take $1.5 trillion of that.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. What was marketed as the future of money? And all you needed to invest in the future of money was the willingness to part with the current version of it. Yeah, yeah. So it had a very broad, which was also one of the reasons why I was so skeptical of its authenticity, was that how can it be all of these different things at the same time? And yet, of course, it wasn't a currency. So then what the heck was it? Well, it seemed like an investment, right? I mean, people were putting real money into it, hoping to make real money off of it. That sounds like an investment contract to me. So I had to figure out, you know, how did Bitcoin come to be classified as a commodity, which is sort of an interesting sort of dorky story? And then what the heck were these 20,000 other things?”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Is that they could kind of see anything in it that they wanted to? I mean, on one level, it's very simple. It's a get rich quick scheme. But on another, the people that were interested in sort of like libertarian politics could do that. The people that wanted to build, it was marketed as generational wealth builder. It was marketed as a way to unbank the unbanked.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question. So I kind of look at as a storyteller, I became fascinated by Robert Schiller's work, the Nobel Prize-winning economist, who's talked about how economic narratives form. And their response to real events, right? And so the Bitcoin white paper's release in October of 2008 was at the height of the subprime crisis. And there was an understandable mistrust of legacy financial institutions, banks, all that banks were even more unpopular than they often are. And so the timing was perfect to set in motion the notion of a theoretically peer-to-peer currency. It didn't really work. It never didn't take off for a while. But I think to back up, the reason that I think crypto appealed to so many people in so many different ways and so many different types of people, 40 million Americans about crypto.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know how to write about events that haven't happened yet. And he was going on parental leave and he foolishly agreed.”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah No, I'm such a goody two shoes, right? I have my card and I overpay for my marijuana. But yeah, I got high and I was like, I should write a book about crypto, which sounded like a really good idea when you're high. The next morning sober, I realized I didn't know how to write a book. So I got high again. And I realized this journalist, Jacob Silverman, had written an article that I really found quite funny. It was called Even Donald Trump knows Bitcoin as a scam, which was basically Trump didn't really criticize crypto until he left office. And then he was like, it's a scam. It brought together a couple things I've been thinking about. Golden Age of Fraud and all that. I summoned the courage to DM him on Twitter, as you do. I realized he lived in Brooklyn and took him to drinks and said, hey, what if we write a book?”
2023-06-29 · Odd Lots · What Ben McKenzie Learned When He Started Investigating Crypto · IDENTIFIED FROM THE TRANSCRIPT · source