Ben McKenzie

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Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud by Ben McKenzie, Jacob Silverman

algorithmic trading, asset allocation, bank run, barriers to entry, Ben McKenzie, Bernie Madoff, Big Tech, bitcoin, Bitcoin "FTX", blockchain, capital controls, citizen journalism, cognitive dissonance, collateralized debt obligation, COVID-19, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, cryptocurrency, data science, distributed ledger, Dogecoin, Donald Trump, effective altruism, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, experimental economics, financial deregulation, financial engineering, financial innovation, Flash crash, Glass-Steagall Act, high net worth, housing crisis, information asymmetry, initial coin offering, Jacob Silverman, Jane Street, low interest rates, Lyft, margin call, meme stock, money market fund, money: store of value / unit of account / medium of exchange, Network effects, offshore financial centre, operational security, payday loans, Peter Thiel, Ponzi scheme, Potemkin village, prediction markets, proprietary trading, pushing on a string, QR code, quantitative easing, race to the bottom, ransomware, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Robinhood: mobile stock trading app, Ross Ulbricht, Sam Bankman-Fried, Satoshi Nakamoto, Saturday Night Live, short selling, short squeeze, Silicon Valley, Skype, smart contracts, Steve Bannon, systems thinking, TikTok, too big to fail, transaction costs, tulip mania, uber lyft, underbanked, vertical integration, zero-sum game

., “On Scaling Decentralized Blockchains: (A Position Paper),” Financial Cryptography and Data Security (Springer, 2016), Lecture Notes in Computer Science, Vol. 9604, pp. 106–125. 19 Visa: Visa, “Security and Reliability,” https://usa.visa.com/run-your-business/small-business-tools/retail.html. 19 Argentina: Christina Criddle, “Bitcoin consumes ‘more electricity than Argentina,’ ” BBC.com, February 10, 2021. 22 Dan Davies: Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World (Scribner, 2018), p. 260. 23 “minor celebrity”: Shiller, Narrative Economics, Preface, xii. 24 an article for the New Republic: Jacob Silverman, “Even Donald Trump Knows Bitcoin Is a Scam,” New Republic, June 7, 2021. CHAPTER 2: WHAT COULD POSSIBLY GO WRONG? 27 My first byline: Ben McKenzie and Jacob Silverman, “Celebrity Crypto Shilling Is a Moral Disaster,” Slate, October 7, 2021. CHAPTER 3: MONEY PRINTER GO BRRR 32 For our second journalistic collaboration: Ben McKenzie and Jacob Silverman, “Untethered,” Slate, October 17, 2021. 32 director of compliance for Excapsa: Stuart Hoegner, “Deputy GC, Director of Compliance, Excapsa, Jan 2006–Dec 2006,” LinkedIn profile, https://www.linkedin.com/in/stuart-hoegner/. 34 The Commodities Futures Trading Commission . . . had fined: Release Number 8450-21, “CTFC Orders Tether and Bitfinex to Pay Fines Totaling $42.5 Million,” October 15, 2021, https://www.cftc.gov/PressRoom/PressReleases/8450-21. 34 the New York Attorney General had fined: “Attorney General James Ends Virtual Currency Trading Platform Bitfinex’s Illegal Activites in New York,” February 23, 2021, https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal. 34 Pierce was living with Collins-Rector: Joseph Menn, “Spain Arrests Fugitive in Molestation Case,” Los Angeles Times, May 18, 2002. 34 The fourth red flag for Tether: Tether, “Crystal Clear Fees,” https://tether.to/es/fees. 35 “a fraud can be called a ponzi scheme . . .”: Dan Davies, Lying for Money: How Legendary Frauds Reveal the Workings of the World (Scribner, 2018), p. 94. 35 multiple conflicts of interest: Bennett Tomlin, “Tether’s Executives are Deeply Conflicted,” Bennett’s Blog, September 13, 2021, https://bennettftomlin.com/2021/09/13/tethers-executives-are-deeply-conflicted/. 35 Giancarlo Devasini: Kadhim Shubber and Siddharth Venkataramakrishnan, “Tether: the former plastic surgeon behind the crypto reserve currency,” Financial Times, July 15, 2021. 36 The “fraud triangle” has three components: Donald Cressey, Other People’s Money: A Study in the Social Psychology of Embezzlement (Free Press, 1953). 37 Razzlekhan: Zeke Faux, “Did Razzlekhan and Dutch Pull Off History’s Biggest Crypto Heist?

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180 Elon Musk . . . promoted Dogecoin: Eric Deggans, “Elon Musk Takes An Awkward Turn As ‘Saturday Night Live’ Host,” NPR, May 9, 2021. 181 President Biden . . . executive order: White House, “Executive Order on Ensuring Responsible Development of Digital Assets,” March 9, 2022, https://www.whitehouse.gov/briefing-room/presidential-actions/2022/03/09/executive-order-on-ensuring-responsible-development-of-digital-assets/. 181 The statistics cited by the FTC: Emma Fletcher, “Reports show scammers cashing in on crypto craze,” FTC, June 3, 2022, https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2022/06/reports-show-scammers-cashing-crypto-craze. 182 The revolving door kept spinning: Tech Transparency Project, “Crypto Industry Amasses Washington Insiders as Lobbying Blitz Intensifies,” https://www.techtransparencyproject.org/articles/crypto-industry-amasses-washington-insiders-lobbying-blitz-intensifies. 186 Mark Hays: Ben McKenzie interview with Mark Hays, Summer 2022. 188 The United States of America is unique: Conversations with Lee Reiners (policy director at the Duke Financial Economics Center and a lecturing fellow at Duke Law), Summer 2022. 193 John Reed Stark: Ben McKenzie interview with John Reed Stark, Maryland, August 2022. 198 Two weeks later, Kim Kardashian: press release, “SEC Charges Kim Kardashian for Unlawfully Touting Crypto Security,” U.S.

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ADDITIONAL PRAISE FOR EASY MONEY “Easy Money is a deceptively ambitious project—at once a riveting account of the financial crime of the century, and a thoughtful meditation on the nature of democracy and what we owe each other.” —ZACHARY CARTER, author of The Price of Peace “A superb and disturbing examination into the corrupt world of crypto. Ben McKenzie and Jacob Silverman take us on the road—from Austin to El Salvador—as they explore the bizarre new universe of finance that is filled with frauds and fakers, all of whom engage in extraordinarily high-level transactions that impact us all. This is The Big Short for our current times, an eye-opening expose of an industry that has consumed a new generation—with the endorsement of many famous celebrities—who don’t fully understand the economic perils that they face.”

You'll Grow Out of It by Jessi Klein

Airbnb, Ben McKenzie, index card, pre–internet, Saturday Night Live

And that is when it dawns on me: Even Ben McKenzie feels a little bit like dogshit. But how could this be possible? He was the star of The O.C.! He was Ryan! He is also on some show now called Gotham that I have never watched but I am sure is wonderful because he is in it. And yet, as he chats with his girlfriend, beauteous Brazilian gift-from-above MORENA BACCARIN, in the VIP EMMY LOUNGE, he is insecure enough about his stature that he’s worried he’s the butt of a joke. That maybe he is being compared to his former O.C. self and found lacking. Even Ben McKenzie does not feel like a Prinzezzz. Ben McKenzie, who has everything.

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This carousel of anxiety only halts because I look across the room and see a handsome man with an adorable smile and terrific blue eyes talking to an equally stunning woman. I am wearing contacts, so my vision is a little loopy. But this man looks familiar. I squint, squint again, and then realize, holy shit: It’s Ben McKenzie. Ben McKenzie! You know, the lead of The O.C., my favorite TV show from 2003 to 2007. He played Ryan. Ryan who was from the wrong side of the tracks but whose life changes when he is taken under the wing of his public defender, Sandy, played by Peter Gallagher (Jewing it up to great effect). Sandy lives with his family in tony Newport Beach.

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I tell Amy that I need to borrow her famousness and she is immediately on board. We walk over. The woman he is with, on closer inspection, turns out to be Morena Baccarin, the gorgeous doe-eyed angel who played Brody’s wife on Homeland. I have never seen a woman less troubled by another woman approaching her boyfriend than Morena Baccarin was by me going up to Ben McKenzie. I tap him on the shoulder and say “Hi” and then Amy jumps in and says she wants to take a picture of us. He looks at us quizzically but smiles (my heart stops) and says “Sure” and then he puts his arm around me.3 Just as Amy is about to take the picture, he turns toward me with a slightly worried look on his face and says: “Hold on, wait.