Investigative reporter Zeke Faux discusses his book on the crypto bubble, including his time with accused fraudster Sam Bankman-Fried. They explore controversies surrounding Tether, the collapse of crypto, and the eccentric behavior of an individual connected to the industry.
The investigation into Tether's suspicious practices highlights the importance of stablecoins and their challenges in the crypto industry.
Sam Bankman-Fried's rise and fall exemplifies the blurred line between legal and illegal activities in the crypto world.
Deep dives
The Rise and Mystery of Tether
The podcast episode explores the story of Tether, a stablecoin in the world of cryptocurrency. Tether is designed to maintain a value of one dollar and is used as chips for trading on various crypto exchanges. However, Tether raised suspicions due to red flags like lack of transparency and lawsuits alleging lying about its reserves. Investigative reporter Zeke Fox embarked on an investigation to find the truth behind Tether's massive outstanding supply of 50 billion coins and the company's questionable practices. The story of Tether sheds light on the importance of stablecoins in the crypto industry and the challenges they present.
The Complicated Journey of Crypto
The podcast episode delves into the broader world of cryptocurrency beyond Tether. The discussion reveals the allure and complexities of the crypto market. While some individuals believe in the transformative potential of cryptocurrencies, the industry has been plagued by scams and questionable practices. The story of crypto is not limited to just one coin or entrepreneur. It involves a myriad of characters and their experiences navigating the crypto landscape. The episode explores the role of institutional adoption, the casino mentality, and the potential for crypto to develop into something that appeals to regular users.
The Downfall of Sam Bankman-Fried and FTX
The podcast episode focuses on Sam Bankman-Fried, the founder of FTX, a crypto exchange. Bankman-Fried's rise to fame and fortune was accompanied by allegations of illegal activities. He took customer funds entrusted to FTX and used them for personal gambling and other investments, resulting in $8 billion going missing. The story of Bankman-Fried reveals the dark side of the crypto world, where the line between legal and illegal activities becomes blurred. Despite his claims of being careless rather than fraudulent, Bankman-Fried's actions landed him in jail, awaiting trial.
The Cultish Hold of Bitcoin
The podcast episode discusses the enduring popularity and resilience of Bitcoin. While other cryptocurrencies may come and go, Bitcoin remains significant due to its cult-like following. Bitcoin supporters believe in its potential as an alternative to fiat money and embrace a conspiratorial narrative about central banks and the financial system. This base of dedicated followers ensures that Bitcoin retains value and relevance, despite its limitations compared to newer cryptocurrencies. The episode highlights the recurring pattern of bubbles in different sectors and predicts the likelihood of witnessing another bubble in the future.
Wait a minute. For a couple of years there - 2020 through 2022 - everyone acted like bitcoin and even weirder crypto things were worth trillions of dollars. And cartoon apes were on Jimmy Fallon? And now none of us want to pretend that happened at all?
Zeke Faux (@ZekeFaux) wants to talk about it with Vox’s Peter Kafka. Faux is an investigative reporter for Bloomberg, and his new book Number Go Up chronicles the crazy crypto bubble, and Faux’s worldwide hunt to uncover the truth behind one crucial coin. Along the way, Faux spends lots of time with accused fraudster Sam Bankman-Fried, including a mind-blowing hangout when SBF was hiding out from the feds in a Bahamian penthouse. Faux’s work is particularly timely because SBF is about to go on trial. but even beyond that, it’s important to remember just how big crypto mania was - and to wonder if we will learn any lessons for the next bubble.
Host: Peter Kafka (@pkafka), Senior Editor at Recode
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