The Rise and Fall of Crypto Lunacy (w/ Zeke Faux)

Zeke Faux of Bloomberg News is the author of a fascinating and hilarious new book about the crypto world and the collapse of the Sam Bankman-Fried empire, Number Go Up: Inside Crypto's Wild Rise and Staggering Fall. In contrast with Michael Lewis, whose recent book Going Infinite also looks at Bankman-Fried, Faux sees the scamming and lying of the crypto world for what it is, and his book is highly conscious of the harm done to victims by the fraudulence of Bankman-Fried and others. (Faux's book begins: "'I’m not going to lie,’ Sam Bankman-Fried told me. This was a lie.")

Today, Faux joins to answer all of the most pressing questions about SBF, FTX, crypto, and the very dumb world of "NFTs," like:

• When did SBF's (alleged) crimes become detectable? Is Michael Lewis right that at the core of FTX was a "great real business" that was undone by bad luck?
• When Zeke confronted Jimmy Fallon about all the money people lost by investing in NFTs, how did Fallon justify promoting them?
• Since Sam Bankman-Fried rationalized his every action in terms of its "expected value" calculation, how did he justify playing video games all the time?
• Was SBF's "effective altruism" ever actually sincere?
• Why would anyone ever have bought a "bored ape" image for millions of dollars?
• What insights about the human condition can be gleaned from examining the world of crypto?

Bankman-Fried said that I was wrong. Crypto wasn’t a scam, and neither was Tether. But he wasn’t offended by my question. He said he totally understood my problem. Then he did something that didn’t strike me as strange at the time. But knowing what I know now, I can’t help but wonder if he was trying to make some kind of winking confession. Bankman-Fried cut me off, nodding, as I tried to explain more. His tone turned chipper. He said: “It’s like the narrative would be way sexier if it was like, ‘Holy shit, this is the world’s biggest Ponzi scheme,’ right?”

Right.
— Zeke Faux, Number Go Up

Listeners may also be interested in prior episodes on crypto/NFTs/"Web3" with Stephen Diehl, Molly White, and Nicholas Weaver. Incidentally, Sam Bankman Fried is testifying in his criminal trial today. It's also never a bad time to reread our 2021 article "Why Cryptocurrency Is A Giant Fraud."