The Other Side of the Bitcoin: Crypto & Corruption w/Ben McKenzie | The Weekly Show with Jon Stewart

What exactly is crypto? Is Bitcoin? What are we dealing with?

So, it just started off as an idea that was dropped uh on a cryptography mailing list in 2008, 2009. A paper that basically said, "Wouldn't it be cool if you could send money directly, person to person, and avoid the banks?" Uh, which sounds like a pretty good idea. This is October 2008, so it's the height of the subprime crisis. And, um, the idea didn't really take off initially because there was, "Okay, but why does it have value? You know, what can I actually do with this thing?" The first use case was crime. Uh, it was the Silk Road.

This >> The first use case, by the way, Ben, is always crime. >> I mean, you know, >> As the commissioner of Gotham, you should know. >> You know this. I know this. It's Gotham, baby.

Hey everybody, welcome to The Weekly Show podcast. My name is John Stewart. It is April 14th. Ah, tax day eve. I think this is coming out tomorrow. What a, what a lovely time we're having. I feel energized, ladies and gentlemen. I feel uh, I feel as though, uh, like spring. There's a little crack of sunshine in the [ __ ] show that we have been living through uh this past year and change. Uh, Hungary has offered us a respite. They have shown, oh, you don't, there is an opportunity for voters to have the last say, and it, it filled me with hope, and I urge you to take sustenance and and resolve from their joy and jubilation in kicking out a corrupt uh kleptocracy. I think that's why I have the energy. It could also be because uh President Trump did heal me as Jesus Trump uh just recently. If you don't know, uh go to the picture. Uh, but clearly he's given me a little bit of, it's like a little vitamin B12 shot in the ass. Really, there's nothing like a glowing orb being placed on your forehead. That combined with uh the election with Orban.

But we're going to move past all that now. We're going to, we're actually going to get into a subject I, I don't know an awful lot about, but I find it fascinating, and that is the world of digital uh currencies and coins and crypto and all those different things. And and our guide through this maze is an unlikely one. He's, he's an actor. He's a guy you recognize, but he has written a legitimate, like, non-actor book, like an economist book. And so, uh, let's just get to him now. Ben McKenzie is going to, is going to guide us through the labyrinth. So, ladies and gentlemen, uh, this is, I'm, I'm delighted today to be able to uh, bring on a gentleman who has put in the work. He didn't have to put in the work, but he put in the work. And, uh, Ben McKenzie, welcome to The Weekly Show. Ben is the author of the New York Times bestselling book *Easy Money* uh on economics and directed and produced the feature film *Everyone Is Lying to You for Money*, which, quite frankly, is probably the case. Uh, but it takes like a deep dive into the, the world of of cryptocurrency and fraud.

Ben >> John, >> there we go. Now we're now calibrated. We've calibrated and at just the right level. Uh, what sparked your interest in in this world of crypto? Were you, were you burned in a crypto? Did you think you were going to the moon and not get to the moon? What, how did this come about?

>> Yeah, I'm just stranded here on Earth One now. I'm trying to get over there. Uh, I uh, well, in a way I was burned, but it was through a buddy of mine, a buddy of mine named Dave, who's >> the infamous Dave. >> The infamous Dave. He uh, I was in my mid-20s. We had gone to college together. I had made a little money in my first TV series, and he came to me uh in the mid, as I guess late '00s, and was like, "You got to buy stock in this company." And the company had supposedly produced synthetic blood. Um, they were going to make a fortune. Yeah. Um, it's so embarrassing.

>> Wait, does this turn out to be Theranos or something?

>> It's not Theranos, but like, like somebody had already come up with the idea of the scam. They hadn't quite scaled it yet. >> I see. >> You know, uh, anyway, put money into it. Both of us, both promptly lost it. And so, >> my lesson, my takeaway is don't take financial advice from Dave. So, in 2020, throes of the pandemic, he comes to me, you know, crypto's everywhere. The celebrities are selling it. He's like, "Dude, you got to buy Bitcoin." And I'm like, "No, Dave, I'm not going to buy Bitcoin. By the way, what is it?" And he can't explain it to me. You know, he doesn't know. I'm like, "Is it money?" It's money. So, it's currencies. It's money, right? I'm pretty sure that's what the word currency means. So, what do you do? You, you buy stuff with it? Uh, no. You know, you put money into it and then, you know, hopefully it goes up and you sell it. I'm like, so it's an investment. And he's like, "No." Yeah. I mean, sort of. Anyway, it got very, um, it was very unsatisfying with Dave. And so, I felt like I needed to uh, do >> you have to do a little research. >> do my own research, as the crypto folks say. >> Oh, D.Y.O.R., for god's sakes. >> D.Y.O.R. So, in your research, and this will be maybe we start at the beginning here. So explain to me because I'm, I'm fascinated by this as well, because I think it exposes sort of a lot of the underpinnings of what you'd guess would consider the traditional economy as well. But so, what exactly is crypto? Is Bitcoin? What, what are we dealing with?

>> Uh, so it just started off as an idea that was dropped uh on a cryptography mailing list in 2008, 2009. A paper that basically said, "Wouldn't it be cool if you could send money directly, person to person, and avoid the banks?" Uh, which sounds like a pretty good idea. This is October 2008, so it's the height of the subprime crisis. And um, the idea didn't really take off initially because there was, "Okay, but why does it have value? You know, what can I actually do with this thing?" And the first use case was crime. Uh, it was the Silk Road.

This >> The first use case, by the way, Ben, is always crime. I mean, you know, >> that's that. >> Yeah. As as the commissioner of Gotham, you should know. >> You know this. I know this. It's Gotham, baby.

I uh, uh, look, in its limited defense, the use case was mainly buying drugs online. And I am not an anti-drug guy. I mean, some of the drugs were a little more >> severe than than, you know, marijuana, my personal favorite. But um, but yeah, it was drugs. It was buying drugs. Although honestly, on the Silk Road, you could also order assassination attempts. Um, that's, you know, that guy Ross Ulbricht went to jail because he was like >> Holy [ __ ] >> trying to >> Yeah, that's that. You never see that category on Craigslist. Health, beauty. You never see the assassination.

>> So, you know, it gave Bitcoin because so what, what Bitcoin is, and all cryptocurrencies, they're, they're basically just a record of transactions on a ledger called a blockchain. And the neat thing about them is that your identity is obscured. It's a synonymous ledger. Not not anonymous, but you can't, you can't tell what accounts, what wallets are interacting with each other. So, you can hide, you know, where you're sending something of value. Um, now, who would that appeal to? Criminals.

>> All right. So, I, I want to back this up because I, I do think people get really lost in this in in that it's sort of hard to understand. Is this, is this meant to run parallel to our traditional financial system, which you imagine is sort of, if you, if you break it down, there's banks, and the banks hold your money, which we've all decided has value, and they distribute it, they loan it. They do, they do all the different transactions that banks would do. And you can invest that money into things that you might think have value that are tied to things, whether they're commodities or securities or all the various things that that you can do that are tied to some intrinsic value that we have in the world. Is crypto meant to be kind of a, a parallel system that's going to improve on that? Is, is the purpose of it? Whatever they thought the downsides of that were, which I assume would be like volatility or exploitation or those kinds of things. >> Is is that what it's meant to achieve?

>> I think, I think the advocates would argue that. Yeah, absolutely. Um, the skeptics would say, "Well, the reason that you, look, as soon as you say you're anti-crypto, one of the first attacks you get is, you're pro-bank. You're, you're just in favor of the banks."

>> Is that? Well, we'll, we'll get into the attacks because I imagine coming out against crypto is like saying, you know, BTS sucks. Like, I imagine you get wailed on online.

>> Uh, it's pretty funny. It's pretty funny. I've, I've developed a, a sense of humor about it all. But yeah, uh, obviously, well, I, if it's not obvious, I'm on this podcast, and I don't like the banks. Uh, just like, just like you, just like everyone in the world who isn't a banker. Uh, uh, including perhaps the banker's wives. No, just kidding. Uh, I, I don't think banks are great. And we could talk about whether the bank should exist or whether we should just have accounts with the government, which may be, uh, you know, a way of sort of, the reason that crypto gets so far in its argument is it's really simple. It's, um, don't you think the regulated system sucks? And everyone raises their hands.

>> And then they say crypto fixes this.

>> Um, now, with the banks, what, when you're sending money around the banking system, what you're really doing is avoiding the rules and regulations of that system because the banks are obviously licensed by the government, and in exchange for be the ability to create money in the form of loans, they have to abide by all these rules. Do they do it well? No. Do they [ __ ] up all the time? Yes. Uh, but, but that is the system that we've, we've created, and they are at least, you know, in some ways, you know, they're, they are, they have to be responsive to the democracy we've established because if, if they aren't, if they mess up too badly, we pull their license.

>> Right.

>> Crypto, crypto says, "Well, we don't need any of that. We can just go all the way around it and create this thing that's acting like a dollar, but it's not backed by the full faith and credit of the United States. It's, it's a private dollar. It's a dollar that exists outside of the, the, the public issuing of money." So, to me, that's a counterfeit dollar. You're saying it's a dollar, but it's not a dollar. Um, the only thing you can really use that for is to get around the regulated system.

>> You could use that for good, but you're really using it for crime. Money laundering, tax evasion, sex evasion, >> uh, child sexual abuse material. Um, you know, ships, ships are going through the Strait of Hormuz right now paying in cryptocurrency because the Iranians don't want to use the banks. They've been shut out of the banking system. So,

>> So, cryptocurrency is a way to get around the, the legal barriers if, if you wanted to do something. Now, I guess the flip side of that might be it might also be a way to get around. The Iranians are getting it from ships for crypto. I imagine the Iranian people, >> yes, >> might be able to use it to get around a repressive regime. Is that, if, if we wanted to make the counter, is that something that would be useful?

>> Yeah, absolutely. I mean, look, money is a tool, right? Um, so you can use it for good or for ill. I was, I heard a story from a reporter uh about a woman in Afghanistan who, you know, because she's a woman, she's not, she can't be banked under the Taliban. And so she's running a business, and she's paying her employees, running her business in, in cryptocurrency, in Bitcoin or other, other crypto.

>> Now, are we being too universalist by saying crypto? Because there is, you know, look, in this world, and I am not in any way familiar with it. But so I'm going to throw out some things and then we can kind of break down like, I know Bitcoin, I know stablecoin, then there's memecoin, then there's uh, whatever Dogecoin, which may be a memecoin. Like, are, are there, what are the different products that exist in kind of the crypto universe and and what would be the difference between those products?

>> I, I would really just separate them into two categories broadly, broadly speaking, which is the speculative cryptocurrencies, which is Bitcoin, Ethereum, and the 20,000 other or more. It was 20,000 a couple years ago, it's probably more now, cryptocurrencies that the price goes up and down. You can bet on them. Would that be like MelaniaCoin and and Trump? Okay. So, that's that's just a version >> of >> I think so. I mean, the Bitcoin advocates will argue the tech is slightly different. We can get into that in a separate, like, there's this different consensus algorithm that runs Bitcoin. It gets a little bit technical. It's all stupid. It's all stupid. But here's the thing. The, the, at the end of the day, you're betting that or or putting money into it hoping to make money off of it, >> right? >> Through no work of your own. That's an investment of some kind. Which, by the way, yeah, I mean, that's generally that's how the stock market.

>> Right. But you're, but >> but it's that's tied to something.

>> Exactly. It's not tied to anything in the real world. That's what's so interesting. It's just lines of code stored on ledgers called blockchains. So there's no tie to any real-world asset. So what are you investing in? I would argue you're really investing in the story of it and the belief that other people give it value, therefore it has value. Um, it gets pretty esoteric. I mean, look, money is all made up, right? Right. I mean, we made up the US dollar as well.

>> Sure.

>> It's just the distinction is really fundamental to me and to many other actual economists. I'm sort of an armchair economist, but real economists.

>> You have an economics degree. Let's not soft-sell. And it ain't nothing.

>> Undergraduate.

>> UVA, baby.

>> Wahoo. Wah. There's, there's no shame in that.

>> I was so close to going to William and Mary. I, I really, it was between William and Mary. It was >> Boy, did you make the right choice.

>> I don't know. We used, we used to say William and Mary was UVA without the fun.

>> What? Really?

>> William and Mary is so not fun.

>> At least when I was there, were two bars in the entire [ __ ] town, Ben.

>> Oh, I did make >> You've been, I bet you've been to Williamsburg.

>> It's a, it's a lovely place to spend a weekend.

>> It's real small.

>> Four years gets old.

>> I mean, Charlottesville felt small to me after about two or three. I was like, I need to, I need to get out of here. So, yeah, maybe I did. Only two bars. So, yeah. [ __ ] I didn't know that. They don't, Oh, >> they don't lead with that when they're getting >> Yeah. And one of them was a deli, so it wasn't even, I mean, you know, the whole thing was bananas.

>> Yeah. Yeah. Bananas.

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One fundamental critique of crypto is the proponents will say, "We want to free money from the dead hand of state. We want a money that exists outside of these terrible governments." Okay.

>> You want to decentralize it to give the people, to democratize it.

>> Yeah. So, but, but then the natural follow-up to that is, okay, if the money doesn't come from the, the governments, where does it come from? And they don't like to talk about this, but the answer when it comes to cryptocurrency is corporations. It's World Liberty Financial in the case of Donald Trump and all his coins. It's also Bitcoin. The, the Bitcoin that is mined now, you know, these new coins that are created, they're mined by multi-billion dollar corporations, many of which are publicly traded, right?

>> So, you're talking about corporate money.

>> Now, let's, and this is going to be remedial, but we're going to step back because this is where I feel like Bitcoin differs a bit from memecoin.

>> Yes.

>> In that, and and you mentioned it, it's mining. So my understanding of Bitcoin is it's a finite system, closed system, and the blockchain technology. Whoever gets the correct next answer in the blockchain gets a coin. Is that >> Yeah, >> it's, it's in some ways a, a game.

>> Yeah, it's a game. It's a gambling exercise. They're running simple mathematical calculations over and over and over again. And early on, I imagine you could gain them a little more easily.

>> Yes.

>> Than than now because now that the chains are longer.

>> Yes. The chains get longer. The competition gets more fierce. The price, you know, continues to rise uh on average over time.

>> And and it takes a lot of electricity and computing power now to get that. So those Bitcoin farms are corporatized. They're, they're now owned by larger, like, you can't be just like a Bitcoin dude in your attic grinding Bitcoin the same way you could maybe early on.

>> Exactly. You never, you're never going to make any money doing it that way. I went to the biggest Bitcoin mine in the country, which is outside of my hometown of Austin, Texas.

>> Okay.

>> And it's a former Alcoa aluminum smelting plant. Um,

>> And they literally call them Bitcoin mines.

>> Yeah, they call it a mine.

>> But it's just in essence >> just computers. What one of the things that's so interesting to me about Bitcoin and crypto, it's so suspicious is that they're putting these words on there to give it a sense of tangibility, you know, it's a, it's a coin. Well, no, it's lines of code. It's not a coin. It's, it's a mine, you know, as though you're mining physical objects from. No, you're not. There's, there's nothing there. So, I, I think the terminology is really interesting, but yeah, it's just warehouse after warehouse. I mean, these are these warehouses were football fields long and maybe 50 feet in the air, and it's just computers just [ __ ]

>> It's crazy, man. It's cra, like, and you sit in the middle of it. They have one, I guess the new technology uses some sort of cooling thing so it's not loud. But the old technology was they just stacked them in these warehouses and they had like the roof was open and it's March in Texas, so it's sort of in the 70s. It's not that hot. But inside that room, it's got to be 90. And the guy's telling me it gets up to 110 in the summer. And all you hear is this this whirring noise of the computers running. And it's just that, like a billion digital locusts, like, oh Jesus. And it's, it's creepy. It's so creepy. And how much in a, in a room like that, like what are they, what does that generate for them over a period of time? Like if you, if you own one of these warehouse server things, and I imagine the investment is enormous.

>> Yeah.

>> What, what is that generating for you?

>> You hope to get Bitcoin. And if you m, if you run enough machines, you know, you're going to get a certain amount of Bitcoin. The, the economics were working when the price was going up. Right now, they're in not a great place because the price has obviously gone down since the sort of the Trump furor has sort of uh waned here. So if you were an early adopter, >> Mhm. >> you're still probably, I don't know what it, I don't know >> way up. If you got it way, way. Yeah. And and so I want to actually address that argument specifically. So the strongest argument, one of the strongest arguments that crypto has psychologically is to say, you know, you criticize it and they go, "Well, yeah, but I bet, I bet you wish you bought in early." And I'm saying, I know, but okay. You're saying if I bought in early to this thing I'm describing as a Ponzi scheme and a multi-level marketing scheme, you're saying I would have made money. That's not really a critique of my, of my criticism because that's an aspect of a, that's a actually the central feature of a Ponzi scheme or a multi-level marketing scheme is if you had gotten in early.

>> Yeah, exactly. The problem is that most people don't get in early, and so most people lose. So >> Let me tell you about Amway. If you get in early, you can be a diamond distributor.

>> Right.

>> And with Amway, at least there's a product. Those products may not be great, but like there are. And interestingly enough, multi-level marketing schemes are not illegal. You can actually have legal multi-level marketing schemes. Um, Ponzi schemes is a different story. And I would describe crypto as sort of a blend of the two. But the way MLMs work is your >> MLM >> multi-level marketing scheme is your is your, >> you know, it's like a pyramid, it's a pyramid scheme, right? So there's the top, the people that started it, whoever came up with the the idea. Uh, maybe it's Satoshi in this case.

>> Satoshi is is the person who did that white paper that you're talking about from however many 18 years ago.

>> Uh, but no one knows if that's an individual or a collective or anything really.

>> Exactly. And there's some, there's been some recent New York Times reporting on that. We can talk about that uh if you like. But, um, that guy, the guy that's supposedly Satoshi, fun fact, he hates me. He hates, I've never met him. I've never interviewed him. He has called me on Twitter.

>> Is that Is that based on the OC or is that based on

>> I think he was a Seth fan. That's my understanding. No, he does not like, he does not like what I'm saying about crypto. And I just, and not to make it about me, but you know, we're here and I think it's funny. I think it's really funny. He has referred to me as a crisis actor.

>> Um, now, >> wow.

>> I, I am an actor.

>> That is true.

>> It is a crisis.

>> He's so close. He's so close to getting >> He's he's so close to putting it together.

>> Yeah. Uh, anyway, that guy's quite a piece of work. Um, so if Satoshi was at the top of the pyramid and the, then the people, you know, next who bought it next would be, you know, right below him, and you would go downward. And so a lot of crypto is really just convincing people to buy the thing that you've already bought, right? The thing you already own, right? Like, "Hey, buy me, buy some Bitcoin because I bought Bitcoin 10 years ago and I bought it at a penny, and I want to sell it to you at $60,000 or whatever."

>> It's weird. It's strikes me as it's this, it's almost like a pumpkin financial village. It has all the tentposts of our financial system, but if you look behind it, it's, it's slightly two-dimensional. That's why I thought when we talked about it as two separate things. It's sort of an asset and it's also a system. I have to say the system part of it seems like it might have some real value. Uh, blockchain seems like it has encryption value. It seems like it has a, a democratized person-to-person value. I could see where in the world that might make that might make sense.

>> Mhm.

>> Well, let me just push back a little bit on >> Yeah. Yeah. >> Because the tech argument is thrown out a lot. If you talk to cryptographers, some of the people that hate crypto the most are cryptographers. I mean, the ones that aren't in the crypto industry.

>> Right? Right.

>> Because cryptography has moved on from blockchain. It's not a, David Chaum, the guy who was sort of credited with sort of um, you know, laying the intellectual foundation for this in many ways. He referred to Bitcoin to me, or or blockchain, as primitive. Um, it's not, it doesn't work very well. But to give an example of what, how well it does not work, um, Bitcoin can only process five to seven transactions a second. Um, Visa can do 24,000 >> a second. >> A second. Five to seven transactions a second. You can see that just will never work as a global payments method because it's too slow.

>> Even, even Sam Bankman-Fried, when I interviewed him, admitted that to me. Yeah, we'll talk about that. But >> Baby, that, I, I just want to say, and we'll come back to it, that Sam Bankman-Fried interview [ __ ] bananas.

>> Crazy, right? That, and this is, by the way, Ben interviewed Sam Bankman-Fried, and this is in his his movie, uh, before Sam Bankman-Fried is caught or even, I think, suspected. >> But it is so clearly one of those like, weird Mike Wallace shows up at your storefront and is like, "Sir, would you like to answer a few questions?" And the dude is sweating from the minute you sit down. Well, it is because I had the mug that I bought on Etsy that said "Fraud Investigator."

>> Oh, jeez.

>> And so I was doing a little scoping on him. I was messing with him a little bit. Um,

>> But you knew. And by the way, Sam Bankman-Fried, he doesn't, he ran the exchanges by which these things are, and we can, we'll get into all that.

>> Um, in a little bit. But now we're, we're back to talking about, you know, these peer-to-peer uh uh ways of doing transactions, whether it's cross-border or within borders or person-to-person. It's much slower using blockchain, but is there an advantage that there are no fees charged? There's no interest charged. It would that, if you wanted to throw them a bone, would that be what you'd throw them?

>> Uh, sort of. I would say that, so, first of all, Bitcoin is the real slow uh uh blockchain. There are faster blockchains, but the disadvantage, the disadvantage is >> a, they don't have the, the uh limited supply of Bitcoin. So, like, you can just print endless coins. It seems, you know, hard to have real sort of supply and demand intersections there or sort of real value if it's just sort of endless.

>> Yeah. If you could just keep printing currency, as we've learned. I mean, there are some deep ironies.

>> Not the greatest idea.

>> Yeah. Well, look, I mean, you, yeah, we can talk about money supply, I guess. But, but, but, but the, the, the idea that there's no fees is an appealing story, but I'll just give you one example of how it didn't work in real life, and that's El Salvador.

>> This is Bukele.

>> This is Bukele. Yeah. So, so Bukele gets elected. He uh comes up with what I now think is really a marketing plan to sell uh westerners on uh, you know, coming to El Salvador for tourism, but really sell the country on using cryptocurrency to send money back home. The, a quarter of the El Salvadoran economy is remittances. Um, it's the two to three million people of Salvadoran descent that live in the United States primarily sending money home to their friends and families. Right? So it's really the foundation of the economy, and if you're, you know, sending it via MoneyGram or or Western Union, you're paying a fee, and that fee can be, you know, it could be significant. So, so Bukele's pitch, which sounded good, was, "Well, we'll, we'll build a government system on top of Bitcoin. Everyone will get like $30 of Bitcoin, a kind of a giveaway, and then you can use this system to send money back and forth, and you'll avoid the fees. The government will take a tiny fee, but much smaller than than than Western Union or MO."

>> So it'll be like when when those uh exchanges came up in the stock market where it was, it used to be you would pay a commission to a broker and each transaction would have a certain fee, and then, uh, all of these sort of democratized uh methods for buying stocks popped up that said, "There will be no transaction fees. We won't take a commission." That, that's in essence what they're recreating.

>> Yeah. I would say in, with a, with a system. Yeah. Yeah. Yeah. Trying to. And so what happened? Uh, with much fanfare, the system was launched. The price of Bitcoin collapsed immediately. Like, went down 20% in an hour or something. All the exchanges shut down. That's very weird. Why did the price of crypto crash suddenly?

>> Yeah. Why?

>> Well, if you were front-running, if you had a bunch of crypto and you had a big publicity event that you knew a lot of people would be buying into, thinking it's going to go up, that's the best time to sell. That's my own personal theory. I can't, I can't say that I have >> A little, a little nation-state pump and dump.

>> Little, amen. That's exactly right.

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Can you make the argument that this is all, it's a solution in search of a problem, in that, you know, it's not solving necessarily the underlying issues of whatever our financial system is now, in the way that like FDIC tried to address bank runs or those kinds of things and did it, you know, really effectively. Are they trying to, are they purporting that this solves a problem that it, a, doesn't really exist and b, isn't that it isn't solving?

>> It's definitely that it isn't solving. I mean, I would, in their limited defense, I would say if crypto, if, if we're to take anything from this crypto story, one of the things we need to take is how bad is our regulated system that people are doing this? That people are, regular people are gambling with sometimes their life savings, >> right? Well, they're doing that on our regulated system as well. That's what, you know, that's what the AMC hold was. That's what that's what a lot of this [ __ ] is.

>> True. And there's always going to be gambling. But, you know, crypto is so unregulated, um, or loosely regulated, and it's being forced, excuse me, down our throats in terms of the, I mean, if you watch sports now, >> it's sports gambling or the ads. >> It used to be crypto, but it's still Crypto.com Arena, and it's all that kind of stuff, right? They're really trying to get young guys to buy this stuff because that's that's their client base.

>> So, separating this out from, so there's there's two elements to it. One is the methodology of sending things. It's sort of the pipelines of sending money, transactions across borders, those kinds of things. The second thing is the coin themselves, which are these assets. Are they just like Beanie Babies for bros? Like, is it literally just this item and they've convinced people that it's a thing and so now they jump in in the hopes that it does take off and hold its value. But that's really kind of it.

>> Yeah. It's Beanie Babies for bros or Mary Kay for men. It's a, it's, it's a multi-level marketing scheme. Um, and it really appeals to men in particular. And I think that's worth exploring at least a couple of points. The first is young guys like to gamble. Like >> Now, I haven't, I haven't seen that in today's society.

>> I mean, I remember vaguely, sort of loosely >> By the way, I just, I had bet the under on when you were going to bring that up, and I'm just going to check the time, half hour in. That's a, that's a push.

>> The under. Yeah, that, that's a push. And uh, but I already won on my OC reference, so I'm, I'm still up.

>> You had a Polymarket bet on this, right?

>> That's right. That's right. So, so is the idea, not to keep that gambling analogy alive, but is the value of this in the people that are creating these schemes, the rake? Is it what the, what the house gets? Are, are they the house?

>> They're definitely the house, but you're playing in an unregulated, unlicensed casino. So, you could also win and then go to the teller to cash your chips, and the teller window is closed. Um, in the book, Jacob Silverman, who wrote the book with me, we look at two guys who are trading on the biggest uh crypto exchange at the time, and still now, called Binance, this global crypto exchange.

>> There's a guy in Australia and there's a guy in Toronto. And in this one particular day, I believe it's 2022, they are, uh, one of them is long, one of them is betting the price of crypto is going to go up, and one has gone short and is betting it's going to crash. Well, the price starts crashing, and the guy who is long is trying to get out because he's trying, you see the value of his, of his holdings dropping like crazy, and he's just trying to get out. The guy who is short is just trying to cash out to get some of his winnings.

>> Sure.

>> Well, they're going to the website and they're clicking the button, and it's not working. The, the exchange shut down. Um, which is really interesting.

>> You're talking about Binance, which is the biggest one.

>> The biggest one. And it's completely shut down. This has happened many, many times over a course of crypto history. The price goes down, and the exchange is shut down, and they come, it takes a while. I forget how long it takes, but, but uh, I think it's hours, and it comes back up, and they're both liquidated. Um, the guy who was long is just immediately liquidated. Yeah. Actually, I guess the guy who was short wasn't liquidated, but he'd seen the value of his, of his crypto, that the price, when the, when the exchange went online again, the price went back up.

>> So, the guy that was short also lost. The guy who was long lost, and the guy who was short lost. And I think that's just such a vivid illustration of the sort of fraudulence that we're talking about here. And it reminds you when, like the Robinhood app would, in the midst of, you know, uh, people holding on to AMC or whatever, like would suddenly make it so that nobody could buy and sell anymore. And you do think, "Oh, they're in league with someone." But Ben, what, in, in your mind, as you're describing this technology, which is uh unwieldy and doesn't necessarily fix a problem, maybe it helps people in a repressive regime escape, or maybe it helps people kind of hold assets if their country is unstable or volatile uh financially, if they have hyperinflation or whatever that is. So maybe there are >> certain uses at certain times uh that can be done. Why are people like BlackRock and Morgan and these like behemoths then validating this?

>> Because it's, because it's Wall Street, and they're not, they're not taking a directional bet on it. They're just facilitating the trade.

>> Oh, they're saying, "Let us be the house. If we're going to catch the rake, let us be the house."

>> Yeah. I mean, to give you an example, so, so let's say you buy Bitcoin through an ETF. These, these exchange-traded funds where you're basically, it's sort of like a mutual fund. Like, you put money in, and you're going to get a fractional part of a Bitcoin.

>> But >> So those have already been put into ETFs. Bitcoin, like, okay. All right.

>> And it's, it's like a hundred billion dollar market or something already, which is terrifying if you think of it as like, Yeah. It's insane. So, if, if, if you buy it through BlackRock, let's say, >> you buy your Bitcoin through through a BlackRock ETF, all BlackRock is doing is taking your money, going to Coinbase, these crypto exchanges, and saying, "Hey, here's the money, and we, you hold a piece of Bitcoin. We don't, BlackRock never even touches the Bitcoin. It's, it's just facilitating the trade." So, Wall Street is happy to do this and take a tiny, you know, uh, fee for their service.

>> Well, doesn't that blow up the whole decentralization of this whole thing anyway? If, if the whole idea of it is peer-to-peer or you don't have to worry about the, the governments of the world to have [ __ ] BlackRock involved?

>> I mean, the democratized, decentralized future of money brought to you by BlackRock.

>> Right?

>> What are we talking about? This is nonsense. This is total nonsense. No, I mean, so many of these arguments that they make are so, um, flimsy and and they contradict themselves so often. I mean, the ultimate irony that the democratized, decentralized future of money needs the president of the United States to be its pitch guy. Like it needed, it was down and out after 2022. You know, these guys were going to jail. The price was down. What happened in 2022 that that caused, because it was, you know, listen, Bitcoin, if you were one of those guys that, you know, and the early adopters are like, "I've got a thousand Bitcoin in a wallet and it's worth $40,000," but then Bitcoin goes up over, I don't know, $100,000, $110, you know, whatever it, it got up to, and and suddenly these guys are billionaires, and then it plunges again. What, what plunged it? Was it Sam Bankman-Fried? Was it the collapse of of an, you know, one of those >> exchanges or >> Yeah.

>> Or the exchanges. Yeah.

>> You know, hard to say. Any collapse is hard to know sort of, you know, what the, the first butterfly to flap its wings was, right?

>> Um,

>> Especially in something that you don't think is really tied to any kind of intrinsic value.

>> Yeah. But basically, an enormous amount of speculation and leverage had built up inside of crypto where, to give you an example, Binance was allowing 125 to 1 leverage for a retail trader. Like a regular guy could borrow $125 against every $1 that he put in.

>> Wow.

>> Yeah. Which sounds fun if it's going up, but if it's going down.

>> But also put that in, like, I think the 2008 financial crisis was caused by like banks going 30 to 1 on leverage. Like, not like, so think about that in the, you know, and the collateralized uh obligations that came in after Dodd-Frank brought that even that down by like half.

>> Yeah. And we're talking about, you know, multiple, many multiples of that. So when the mark, when the, so it pumps it up, the leverage helps the pump up, but when the pump, when it starts to correct and go down, it speeds that process up too, as people are constantly trying to sell these worthless currencies, I'm using air quotes, worthless currencies, and there's not enough buyers to actually buy them. So, this happens a lot. Um, and that's why you saw an enormous number of crypto companies go bankrupt in 2022. But what happened in 2024 is Trump's embrace of it said to people, "Well, look, he's a good chance he's going to be president. Uh, he came out publicly in the summer of '24, probably 50/50 shot. And if he is president, he can do a lot to to pump this thing up. And people will see that. So, I need to buy now." So, the price started to go up. Went up more and more and more. And by the time he's in office, it's a, it's $120,000 a coin. It's the highest it's ever been.

>> And that's across only Bitcoin. That's not including >> I don't know if it's Ethereum or whatever else. That's that's literally Bitcoin is 125. And do the other coins follow Bitcoin? Like, uh, if Bitcoin goes up, do the other coins and other exchanges also go up, or that they're not necessarily tied to each other?

>> Not necessarily, but there is a broad >> halo effect on >> Yes. Yes. I would say which which is sort of interesting to >> to look at if you're trying to understand how the market works. But I, you know, really, I've come to to think of these cryptos as the story >> that you're going to be get, you're going to get rich for the retail public. This is the story. You're going to get rich on this stuff.

>> Sure.

>> So, in economics, that's kind of called that's called greater fool theory.

>> You never want to be a part of greater fool theory when it comes to money.

>> Well, well, it's when the price of a speculative asset rises so much that it's really unlinked from any value it could have in the real world. It's not based on its value. It's based on the value you expect other people to give it. So, you're constantly trying to sell, you buy the thing thinking you could sell it for more to a greater fool than you, which is a fun game until you end up on the top, and you're the biggest idiot left holding the bag. Um, it, it's, it's a fundamentally unsustainable dynamic, but they, but they can last for a long time. And and there's also these things. I'm a big behavioral economist guy. That's really my um, my bag. And Robert Shiller, famous uh behavioral economist, talks about uh naturally occurring Ponzi schemes. And

>> Does that involve tulips by any chance?

>> Yeah, exactly. Same dynamic. Somebody, uh, some, some product, something has gets a value, the price is starting to go up, people see the price going up, which uh draws them in, which sends the price further and draws more people in. And and you know, these things can can last for a very, very long time. Um, but if they are actually Ponzi schemes, if there isn't actually a product underneath, I mean, at least with tulips, there was a flower.

>> Uh, with this, you're talking about lines of computer code. Um, you know, eventually they, they >> But that's what

I mean, by like this whole system, it appears to be a funhouse mirror of our actual financial system, which includes all of these kinds of downsides. Some speculative assets that seem to rise in value in ways that don't connect. Uh, big actors that come in and make transaction fees that, uh, you know, payment for order flow. You know, all these different ways that our system is skimmed and tries to avoid regulation and creates the lack of trust in the system that you're talking about, that allows this parallel system to flourish because people are so frustrated, especially on the retail side, by our actual system.

Yeah, that's right. And so I think crypto should force us back to fix the problems in the system. If, if we're gonna learn anything from anything from this, it's not that crypto is the way, right? That that is it's worse than our regulated system, which is saying a lot. Um, but it is saying we need to fix these underly I mean, the fact that so many, particularly young guys, believe that they really can't get ahead, that like they're the deck is stacked against them. I'm not trying to give too much credence to it, but I do think it's, it's a real feeling that these guys are having, like, how am I going to afford a house, right? How am I going to

And those exploitative, uh, aspects of our actual market are real?

Very much so.

You know, we're not all operating on the same information. There are guys that purchase real estate so they can put microwave towers next to it so that they can make transaction money. It's not the crypto whale that creates volatility selling back and forth to anonymous, you know, IP.

Talk about that because that, that to me is such an interesting phenomenon in this online world, which is sort of phantom transaction.

Yeah. Yeah. Fake trading, uh, or wash trading, I guess. Uh, it's because the pseudonymity of the blockchain obscures who's trading what. You can basically take a dollar in one hand and flip it to the other and back and forth and back and forth and bid up.

That's a Beavis and Butt-Head episode. That's Beavis and Butt-Head had, uh, 20 chocolate bars. Okay. And, uh, Beavis had a dollar, so he gave Butt-Head the dollar. Uh, Butt-Head gave him a chocolate bar. Uh, and then with the dollar, uh, he bought the other one and by the end of it all the chocolate is gone and they still just have $1.

Ah, Mike Judge.

Mike Judge, the best.

Genius. Genius. There's also a very funny, uh, Always Sunny in Philadelphia episode about a guys create a currency, but it's like a Ponzi scheme. They can't, they can't figure it out. Anyway, uh, uh, uh, so you can, you can basically make it look like there's a real market for a coin and you're bidding the price of the coin up, but all you're trying to do is lure in people that are actually putting money into this thing, right? Because if you're just trading it back and forth, you're paying like the tiny fee that it costs to do the trade. And and quite frankly, there's a lot of evidence that the exchanges at least have been in on this action, right? Like they're, they're

Oh, really? Even, even the bigger exchanges.

Yeah. In the past. I don't want to say anyone in speci specifically, but like

I mean, to give you an example of how weird it is, with Sam, Sam Bankman-Fried's company, he had an exchange at FTX, which everyone knew about, but he also had a trading firm called Alameda Research and they were in the same building, on the same floor, right next to each other in the Bahamas. And his ex-girlfriend was running the, I'm using air quotes for that, was using, was was the CEO of the of the trading firm and Sam was running the exchange. I mean, in a regulated market, I mean, you can't get away with that. That is such a blatant conflict of interest.

But, but it's not so far off from Citadel. It's not so far off from a guy running, uh, all of the orders, you know, you know, having, I don't know, 40% of all the flow orders on Wall Street and having his own fund. Like that does occur. Even on a, I guess that's my point is it, it may be a pumpkin patch, but it's mirroring very real conflict of interest and other things even within our regulated system.

Mhm. Mhm. It's sort of a bizarro version of it, right? It just sort of takes that even further in terms of the, you know, information asymmetries, in terms of the man, the manipul manipulability. That's not a word. The manip the ability to manipulate the market.

Is there anything worth saving on this? Is there, what would you, securitize it? Do you, what do you do that? So that's

I think, I think you do two things. I, if I were, you know, king of the world for a day, I would say, uh, securitize all the speculative ones. The reason that the crypto industry doesn't want, they they sort of were randomly categorized as commodities in like 2015 and it's a very sort of strange fluky thing where they were selling futures and because they hadn't been classified as a as a security, the CFTC, the Commodities Future Trading Commission, could claim that they were commodities monies.

Like oil, like oil and soybeans. Okay.

And, and currencies. Currencies are classified as commodities as well. So that's their argument. And the crypto market was so small at that time that I don't think a lot of people were paying attention. But if you look at them, as we've discussed, they really operate like securities. And the crypto industry does is so terrified of having, uh, their products classified as securities because

Securities law is predicated on disclosure. You need to know who you're giving your money to and what they're doing with the money.

And crypto doesn't want that. Right. Um, so there's a bill that is threatening to pass Congress that would put, uh, cryptos under the supervision of the CFTC. And that's the same thing Sam Bankman-Fried wanted when he was spending time on Capitol Hill in 2021 and 2022.

Now, why did he want that bill?

Gee, I don't know. I mean, you want the, we, so the reason you want the CFTC in charge is not just because of the disclosure of securities, but also the CFTC is the smaller, weaker regulatory agent.

Rather than the SEC.

The SEC is is stronger by comparison. And, and by the way, just to point out something that's really glaringly, it's such a huge problem in our system. We're the only, only country in the world that separates our securities regulation from our commodities regulation and puts them in rival agencies competing over jurisdiction.

Wow. With rival committees in the House.

You, you'd almost think it would weaken both.

You might. I mean, it, it just creates all these perverse incentives because the committees that oversee these these agencies in the House and the Senate, people want positions on the committees so that they can get the donations from the industries that they're supposedly regulating.

And these crypto guys have not been shy. I mean, there's that infamous dinner at Mar-a-Lago where the buy-in was an insane amount of money to get to sit in a room with Donald Trump and let him talk about how we're not going to regulate you at all.

Yeah. If you, if you bought the top, whatever it was, 10, 25 holders of his coin got access to the president. I mean, what are we talking about?

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Here's what's so fascinating about this because if you look at it sort of under the absurdity microscope. So the president of the United States, Donald Trump, comes in and legitimizes this cryptocurrency world. It gives it access to the most powerful office, you know, maybe in the entire world. But the example of his own entree into that business is a meme coin where almost everyone got [ __ ].

Yeah.

Like 90% of the people that bought into that coin got [ __ ]. And Trump walked away with millions and millions of dollars. H how is that not example number one of everything that would be wrong? And why wouldn't the industry speak out about that?

Because they need him.

He left every retail person holding the bag.

Yeah, but the guys who put a lot of money in, they sure they quote unquote lost the money, but they got access to the president, so they got something for their investment, right?

Or were they the early, did they, were they front-running and they actually ended up making money?

I'm sure some of them were, but the insiders always benefit in crypto. That's really the repetitive theme is like

Although that, listen, that's that's the whole

That's true of a regulated system. It's even it's just more pronounced, I would say, uh, take it to another level in crypto. Um, I, you know, the irony to me that that we have a convicted fraudster president, right? A guy who's convicted of 34 counts or his organizations, right? That he ran his company, 34 counts, uh, by a jury.

Is now hawking the fraudulent coin. And the people who believe in decentralization, democratization, really, really need to be, stay on his good side.

It's just, it's really delicious, I have to say, on a dark, dark level. It's funny.

Now, do you see this then as, so if the, so I don't know where Bitcoin is. What is it around $40,000?

Seventy.

Oh, it's seventy.

Yeah, it's in the seventies. I don't know.

Okay. So, it's still wild. If you were in early, it's wildly valued. Like those people

Still make. What then would cause this to go up again, other than some sort of, I, I don't know. Is it that the supply would run out and like, why would it elevate anymore?

Uh, you know, I, I, it'd be hard to, there's so many reasons there. It's hard to say. I, I, I, I think what has happened while we're focusing on the price of of Bitcoin, um, that's kind of like the, um, you know, uh, the bright shiny object that sort of distracts us. What's what's happening on the other side is these stablecoins are growing like crazy. You know, there's hundreds of billions of dollars.

Now, what are, when you say stablecoins, talk, talk, what, what is the, the meaning of stablecoin?

It's supposedly a stable, uh, cryptocurrency whose value is pegged one to one with a real currency like the US dollar.

Okay. So it's not a meme coin. These aren't the ones where like Elon Musk throws a picture of a dog on a coin, the thing rockets up and then, you know, whoever is one of the whales or whoever the people that are front-running make a [ __ ] ton of money and everybody else gets [ __ ]. This is actually pegged. So this is an attempt to peg it to a real currency to, I guess, get the advantages of low fees and transactions and the ability to move between borders. Is that

Is that their fix?

Without going through a bank? Yeah.

So that stablecoin is is an attempt to fix some of the more egregious problems within crypto world.

Yeah. You, if you want to avoid, if you're a criminal and you've gotten something of value, you're trying to send it somewhere else, uh, to sort of launder your money or to to to to I don't know, engage in some transaction with another criminal on the other side of the world, you'd rather not have the volatility of Bitcoin and other cryptocurrencies, right? Because you could be on the losing end of that. You'd rather have something that's stable that you can send. So unless that currency has high volatility, you're, you're, it's not going to be like we're at 120, now we're at 90, now we're at it's, you're not going to have that rocket ship.

Yeah. You'd rather use something that's quote unquote stable. And so these stablecoins have grown, you know, enormously. And to give you how intricate, example of how intricate this system is, it's things like Russian oligarchs selling sanctioned oil to the Chinese in the form of crypto to buy drones to send to Ukraine.

I mean, wild. That's the silkiest road of all.

It is. I mean, you're talking about last year, uh, a crypto, uh, organization, estimated crypto company estimated that $154 billion of illicit activity was financed via cryptocurrency. Um, $154 billion last year, and that was a crypto company that made the estimate.

Here's what's [ __ ] crazy about that. So Donald Trump is literally shilling for the product that allows our enemies to avoid our sanctions. Is that what this ultimately?

Yes.

Wild.

It's wild. And to give you an example of how deep the corruption goes, the biggest stablecoin company by far is this company Tether. And Tether's broker is Cantor Fitzgerald. And Howard Lutnick was

The commerce. Yes. That's how I mean, guys, we're talking about

Through Tether.

Yes.

And I, like, who knows what's actually going on? Because you said it's synonymous, but is it possible that through Tether, Russian oligarchs are moving oil to, let's make it worse, moving Iranian oil to China in exchange for drones and weapons?

Well, it's not only it's not possible. It happened. It does happen. I mean, if you, you can read stories about this.

And Howard Lutnick profits from that?

Or his kids, technically, because he's technically not the. But I mean, come on. What are we talking about?

Holy [ __ ].

Oh, yeah. And then, I mean, can we talk about Jeffrey Epstein for a second?

Uh, not that I'm aware of. I don't think, I don't think you're allowed to. Yeah. Was he an early crypto dude? Is that what that was?

Yes. Yes. So his sex trafficking was enabled by that same system.

One can assume. I mean, we don't have evidence of it because again, pseudony pseudonymity of the the ledger and who knows, but

And redactions.

And redactions. But here's what we know. We know in the emails that Epstein was, uh, funding something called Bitcoin Core Development, which is the group of programmers, software engineers who maintain Bitcoin's operating system. Yes, there are people behind this supposedly, you know, computer, completely computerized future. So, he was funding that through the MIT Media Lab. You remember the MIT Media Lab? There was a blow-up some years ago, a big article in the New Yorker. It's like this offshoot of MIT. This guy, Joey Ito, was running and they were had relationships with a lot of very wealthy people, including Bill Gates, and funding various projects. So Epstein was, was basically funding, keeping the Bitcoin system alive in 2015 at a point when it was kind of languishing. Silk Road had been shut down. There was a lot of fighting and, and why would, why would Jeffrey Epstein like crypto? Well, if your main businesses are blackmail and money laundering, you know.

We have, we have buried the lead here, Ben. We have spent a a good amount of time parsing what all this stuff means and now we're in the good stuff, which is, and how is it deployed to undermine our society and the like. This feels, I don't want to, like this feels Watergatey times a million.

There's, there's too many directions to go and there's too much corruption. It's like, I, I feel like, uh, Charlie Day and Always Sunny in Philadelphia. I got the pens on the board.

Right. Right. Right. A beautiful, you're going to mind it.

Yeah. Yeah. Yeah. Um, yeah. And to give you another example, um, that guy who's supposedly Satoshi, the guy that hates me, the guy had back, who called me a crisis actor, uh, his company Blockstream received an investment from Jeffrey Epstein. We also learned that in the files.

What?

There's an email from from his co- whoever started the company with with Adam and Joey Ito confirming Epstein's investment in their company.

But back, back says, back says, no, that didn't happen. But there's an email. People can read it for themselves and judge whether.

But here's the other [ __ ] crazy thing. Lutnick lived right next door to the guy.

Yes. And visited him on the island. There's pictures. They tried to hide that. There's a picture of them on the island together.

But, but this is where, boy, I, I hate, you know, like, okay, that guy is now the, the poster child of this, you know, corrupt Silk Road in real life system of depravity and and degradation and exploitation and all those different things. But you're also talking about people at the highest levels of our government right now enabling a system that fuels the very types of weapons that are killing our own soldiers.

Yeah.

Like that's unforgivable.

It is. I, I, I was so angry when he unsanctioned that Russian oil, you know, when he decided, "Oh [ __ ], I [ __ ] up. I went into Iran without a plan." And who could have predicted the price of oil would go up when you, when you start a war, uh, around the Strait of Hormuz? And then he has to un, he has to, he doesn't have to, he does unsanction the oil. And the Russians at the same time were, you know, reporting, there's been a lot of reporting this, were providing intelligence to the Iranians to kill our guys over there, right? They were trying to help the guys we're fighting against and we're rewarding them by unsanctioning their oil. And

This is [ __ ] madness, you know? And the selling point, the whole selling point of this thing is it will allow poor people to avoid those financial fees of international transactions. It will allow dissidents to still be able to live and and pay for certain things, uh, even though their governments are, uh, repressive. But what it really is, is oligarchs and arms dealers and, uh, uh, corporate titans controlling a black market of war and and degradation around the globe. That's really what it's been most utilized for.

That's the majority. Yes. An overwhelming majority. Of course, it's so you can't find, you're never going to get a statistical breakdown because again, pseudonymity of the ledger. It's, it, it's purposefully trying to be obtuse.

So on Tether, could you go on Tether and track whether there are transactions between illicit oil shipments and weapons? Uh, if you, if they gave you access to their, their blockchain?

But they, and they don't have to do that.

Well, I don't know if you went to a lawyer. They, they have on occasion when when forced to by law enforcement, when sort of like threatened with, well, if you don't do this, we're going to go after you, they have given over certain limited, you know, uh, clients of theirs. Their their rationale for this is look, we don't, you know, money can be used, regular money can be used for all sorts of bad things. We're just, you know, we're just issuing the coin. People can buy and sell it. We don't, you know, we don't control what they do with it, kind of a thing. Um, it's preposterous because article after article after article goes specifically to this company, Tether, and specifically, uh, to all of the different ways in which it can be used to, uh, finance criminal activity. We're talking about global, uh, criminal cartels, you know, South American, uh, drug cartels, but also Chinese triads, but also, you know, ISIS, but also North Korean hackers.

So, this is, in, in, in a way, in the way that the US dollar has been utilized as a weapon, the weaponization of, because we are the global currency, the way that we weaponize that is through sanctions on petrodollars or oil system or any of those other things. And the way they get around it is the exchange that is owned by our Secretary of the Treasury's company, that that is what we are, the stablecoin company. Yeah. Yeah. He, they have an exchange too. But yes, the, the stablecoin company is represented, their financial interest is represented by our commerce secretary. I, I don't know how that's not, well, I don't know why we're talking, I don't know how that's two idiots in a podcast talking about that and that is not a global corruption scandal and crisis.

Is so I've been doing this for four or five years and you have your high high moments and your your low moments, but you know, the reason that Lutnick came on Trump's radar is all of a sudden he was raising money for him in his campaign, right? He was the co-chair and there's there's all these stories from the summer and fall of 2024 about these incredibly lavish fundraisers where Lutnick would host him and they would raise, you know, a million dollars a head or whatever to go into their super PACs. And, you know, it doesn't take a rocket scientist to figure out, you know, that some of that money is is, um, well, that the money is the money is given with the expectation that there will be something in return.

Right?

And what's been given in return under the Trump administration for crypto is they, uh, they disbanded the cryptocurrency, uh, crime task force that the DOJ had set up. They've ripped apart the SEC. Hundreds have left the SEC. They've gotten this bad bill through Congress called the Genius Act that allows corporations to issue their own money in the form of stablecoins. That's what the Genius Act does with what?

Literal corporate money. Yes.

So corporations, not only are they people,

Not only is their speech, uh, protected now by the First Amendment and their money is considered speech, they are also their own nation states with their own currencies.

Yes. Yes. And I want to say a hundred, a hundred Democrats voted for voted for this legislation, including Hakeem Jeff and my congressman Dan Goldman, which is why I'm supporting Brad Lander for Congress. But I am outraged that the Democrats because they're so fearful of the crypto lobby, which has so much money and they do have an enormous amount of money to spend.

Clearly.

In 20, clearly.

I don't want to say where they got it from, but clearly.

Exactly. Exactly. In 2024, to give you a sense of how big this is, it was $240-something million dollars and it was 40-something percent of all corporate donations in the cycle came from crypto, from the crypto industry and the companies, uh, the the players inside, the individuals and the companies. 40% of all the money that's like more than the defense industry and the pharmaceutical pharmaceutical industry combined. It's crazy.

And how is this not the bubble of all bubbles then?

It might be. I mean, I describe it in the movie as the largest Ponzi scheme in history. I didn't know it was going to come back and reinflate, but, uh, but, you know, sometimes that that that does happen. Um, but has it in some ways been reinflated even? So now the question is, has it been reinflated by what you call, uh, the fool theory, or has it been reinflated by international money laundering?

Both. Both.

Yeah. I mean, the scary part to me is that crypto is notoriously volatile. It seems as though we are getting close to being in a recession, if not there already. We're we are certainly slowing down a lot economically and this war is such a disaster already, um, that it, it seems like inflation isn't going away anytime soon. If the economy goes down, then, you know, traditionally, historically, if there's a correction, the most speculative things, most speculative things fall the fastest. And if you think crypto is only speculation, as I do, on the retail side, what happens when these ETF holders try to sell? You could sell a billion dollars worth of these ETFs, but let's say you tried to sell $10 billion in a day and there isn't there aren't enough buyers on the other side. And the whole thing collapses, just like it did in 2022, but instead, it's now tied into our regulated system. Now all of these Wall Street firms are in on it. Now, you know, they're getting banking licenses.

So now it's a, it's a subprime contagion.

They recreated the thing that was created in opposition to subprime has effectively recreated subprime.

And there's not even homes involved. Like there's not even, like, so it wouldn't, would, would crypto be a hedge? Like if the actual financial system falls, does crypto function similarly to like gold and silver? Does it then hold value as a hedge against societal collapse because somehow it's an intrinsic value item that isn't tied to any of this other [ __ ]?

Yeah. I mean, that's been the pitch, right? Um, and if you go deep, like the hardcore crypto crypto people, and that's a very small group of people, but the hardcore ones are sort of a narco-capitalist guys who are like, you know, we kind of want the system to to fall apart and then we'll be saved by our Bitcoin. That's pretty crazy. That's really pretty crazy. But historically, what's happened when inflation goes up is that crypto goes down. That's what happens in 2022 in the film. Is the inflation had started to, so, so crypto really took off during the pandemic because there was all these, there were all these stimulus checks, people were sitting at home, guys, they they needed something to gamble on.

Looking to go to the moon, right?

Yeah, yeah. So, so that happened. But of course, then the result of the easy money was inflation. And when that became sort of unavoidable, the Fed, uh, or undeniable, the Fed had to raise interest rates. And right around when the Fed, Fed raised raised interest rates in March of 2022, crypto was just nose-diving. Just, you know, dropped by half or something in the span of six months. So, I hope it doesn't happen again, but in history, guy, it will.

Well, the reason why it, it, it might not is because if you think about it in, in that way, you really, crypto is in some ways an ETF of black market goods. If it's, it's an ETF of the illicit markets. It's an ETF of gun running and drug running and sex trafficking and all the ways that international, you know, cartels will avoid the the regulated system. Does it ever have to reconvert? Is there, you know, when, if you're moving crypto and is it a barter system and crypto is kind of the linchpin of it? It's not like they have to take that then and then reconvert it into, and I don't know if maybe they do this with stablecoin, reconvert it into actual currency.

Yeah, most of the time they do. And they do that through things like over-the-counter desks where people are actually getting dollars, like or or whatever physical currency and the porn bills for. So a lot of the transactions that actually occur in crypto don't happen on the ledger. You can have off-ledger transactions, which further obscures the identity of who's transacting. You can give somebody, you know, I could give you $50 and you could give me your crypto coins, right? And so

That would be their their version of dark pools.

Yeah, exactly. Exactly. And so, um, you do, most of the time you do need to get get into a real currency on the other side. But not necessarily. There is this sort of

Digital, um, what's the system in Southeast Asia? Um,

It is a way of sending something. If, if basically the criminals have reasonable, reasonable assurance that they can transact with each other and get something that they want in exchange for something, uh, that they're selling, uh, via this crypto stuff, then maybe they don't have to cash in, right? If the, if the Russians sell the oil and get the drones, then maybe they never have to really cash out. Do you have a sense at all of how much of this has been adopted by rogue states and how much of it is used to evade whatever we would call the kind of international, you know, rules-based order? H how much of of this system of payment is being utilized for those actions?

To give you one example, North Korea has teams of hackers that hack in and steal people's cryptocurrency. Um, half of the North Korean nuclear weapons program has been funded via crypto.

Are you [ __ ] kidding me right now?

Wall Street Journal. Wall Street Journal. Look it up. It's

Why is it, I don't understand this. Why is this blowing my mind?

Dude, it's so wild. It's so cr I mean, it's You get so depressed because you're like, can we? Nothing. It feels like nothing's going to happen until Trump's out of office, right? Like

And but, but you just said a hundred Democrats were like, "Hey, man, it's cool." Do they not know? Have there been, uh, uh, government hearings on the actual usage of this stuff?

Uh, well, there was one that I testified to and then the crypto lobby spent $40 million defeating Sherrod Brown, the chairman of the committee, the chairman of the Senate Banking Committee. They spent $40 million.

In that race.

In that race alone.

In Ohio.

In Ohio. $40 million in Ohio goes, goes pretty far. Uh, and, uh, and they elected a literal car car salesman instead. Bernie, Bernie Moreno, who's pro-crypto. Shocker.

What?

No. Who, who, yeah. So, I, I don't think that I mean, look, I would love to talk to an elected representative on camera, uh, who voted for it, who's a Democrat, and have him explain his deep understanding of blockchain technology, but I'm going to just take a wager, a guess. Uh, a wager, actually, might be the nice appropriate way of phrasing this.

They're afraid of them. They're afraid of them. But even that, you know, the fact that they don't separate out, let's say if there is value in these coins and they don't want to ultimately undermine whatever it may become or kinds of thing. The idea that they wouldn't step in to prevent bad actors from using this very same thing to undermine the security of the United States is a mind-blowing proposition. I, you talk a lot on the podcast about how the Democrats have really, the this the Democrats in power, the elites in power in the Democratic party have made this decision or a series of decisions starting from a while ago and chosen capital over labor.

Man, are you? Yep.

And, and crypto is just like such a vivid illustration of that, right? This is a thing that's a net negative for people in general. Most people who who invest in crypto are going to lose.

Well, it's, it's unrelated to labor in any way, unless of course you work in a crypto mine, but it's, it's, it's unrelated to labor in any way. It's the purest form. It's like the Tron of capital.

Yeah. Yeah. And they're choosing that side. Um, I hear that there's this that Clarity Bill, which is trying to work its way through Congress. I hear that Chuck Schumer is pressuring the, there's a working, there's a caucus that's sort of trying to figure out the Democrats' position on this, and he's trying to pressure them to agree to whatever deal the banks are are coming up with with this the crypto companies to get this legislation through. How do these banks not, how do they, are, are, do they plead ignorance to what this is being utilized for? Like the way you laid it out of Russia and oil and weapons and drones, like, are they going to pretend that that's not the, uh, the manner in which this is being utilized?

Yeah. I mean, as long as they can make money on it, I feel like. Yeah. Right now. What's funny is that the, so, what the crypto, one of the things the crypto companies want, the crypto exchange, Coinbase in particular, is it wants to be able to offer interest to people that put money in in the form of a stablecoin on their exchange. They want to be able to offer them interest, which sounds an awful lot like like a like a loan, right? Like something that the bank would do. And the banks don't want them to be able to do this because that's cutting in on their core business. So, there's a fight between the banks and the crypto companies. And when the banks are the good guys, when the banks are the ones that are holding the line and saying, "Well, we should have some rules, guys. There should be, you know, KYC and AML." And you're like, "Oh, we're so [ __ ]. Where's

Wow. This is bananas. Ben is really, uh, I, I can see. How is this? Are you? Is this a full-time gig now? What are, are you going back to acting? Like, what? Or is this, is this your white whale? Are you the Ahab, uh, you know, going after this?

I don't know. I'm so ready to go back to show now. This is so, I miss people. I miss interacting with people on a set. No,

I, I really, I mean,

Writing books is lonely. Making documentary films is wonderful when you're shooting them, but so much of it is the post-process and it's virtual and you're lonely. And I'm like, so, yeah, I'm working on trying to get back into TV. I want to create a show and do that. I, I think crypto will be will be a part of my life most likely, you know, moving forward. And, um, that's okay. I, I hope to continue to be an advocate and a talk about these things and quite frankly, shame, uh, I can't, I can't control the Republican party. It sounds like no one can, other than Trump. But, uh, if, if that's what we mean by control, I don't know, whatever that is. The free-for-all that's over there. But with the Democrats, I can at least speak, you know, speak up and speak out about

And there's, and there's a possibility for influence. Are there other, you know, I have found that, you know, celebrity gives you the opportunity to shine a light, but you also need allies. You need people who are the people in the trenches doing the day-to-day grunt work of of advocacy. Do you have allies within that world that together you can form a really formidable kind of battalion to go after this?

I'm, I'm trying. I'm working on it. I know there are a lot of organizations. I've done some videos with More Perfect Union, um, the group started by Fasia and a few others. Um, Americans for Financial Reform is a great organization that is really trying to protect, uh, consumers. You know, one of the things that that Trump has done, his administration has done is just rip apart the CFPB. Um, just destroyed it. You know, send in those Doge idiots and they fired, uh, uh.

Well, they, I mean, they just defanged and defunded and pulled people and that's their.

Consumer protection is no longer.

Yeah. Yeah. Yeah. Yeah. Well, that's not, that's not freedom, John. You know, that's a good point. You need freedom.

Freedom to exploit.

Freedom to be screwed. Uh, I, I, yeah. So, I'm working with organizations like that. I would love to continue to work with others. Um, uh, but I do think it's going to take kind of a grassroots effort in order to hold these people both.

No question. And, and the idea that you could put that kind of shaming campaign but have real stamina behind it so that they understand, you know, uh, it will be exposed and you won't be going away. I wish you well. It's a hell of a a story. Uh, for those of you out there who would like to to learn more about it, follow Everyone Is Lying Film on Instagram or go to everyoneislying.com for updates on on where it is or where the film is or any of those other things. Uh, Ben, geez, man. Hell, hell of a job. Hell of a deep dive. Uh, he's the author of the New York Times bestselling book, Easy Money. Uh, you, you, you got to get it. It's a fascinating read and Everyone Is Lying To You For Money, which is, uh, the documentary about this industry. Ben McKenzie.

John Stewart.

And say hello to your lovely wife and I look forward to, uh, seeing you also playing some kind of cop.

Indeed.

All right.

Inshallah. Thank you. Thank you.

All right. Good stuff. Good talking to you.

Good talking to you too.

Guys. What the [ __ ]?

Yeah. What?

What was so crazy? So I, I know we had to spend a lot of time just being like, and what is it again? Bitcoin? And then what's a stablecoin? Like, there was a lot of remedial, like, what are the terms? How does this work? What do they say that it is? And then he, it was just like, he was just like setting me up. He was just walking me down the street like, oh, let me walk you down the street. You know what it felt like? The end of Planet of the Apes. We're like, we're having a nice time. Dr. Zaius is doing these, and then all of a sudden I turn around and go, "Is that the [ __ ] Statue of Liberty?"

It was Earth the whole time.

Wait, what? Where are we?

Yeah. You can really tell he's been sitting with all of this, digging through the Epstein files looking for clues. He's dedicated.

It's, it's I told him I, it's You're not an actor who wrote a book. It's like you're an economist who happened to be in the OC. Like,

By the way.

Oh, OC. Yeah. Yeah. I don't know anything about it. I don't, I don't know. I was trying to tell Tracy. I was like, I think it was on like Laguna Beach. And she's like, I think that's a documentary. I'm like, oh, all right. Well, he's on one of those.

Close. Next week we'll have Laguna Beach. Did, did you know anything about these ex, like when he said Cantor Fitzgerald has the leading interest in Tether, I was like, wait, because if that's being used to undermine our sanctions?

I mean, it's even closer than that. I read something this morning in the Washington Post. I don't want to get it wrong, but it said Trump and his family made more in four months, the first four months of his second presidency, off of his meme coin than four years running his Washington D.C. hotel during his first presidency.

Like that just shows. But yeah, I mean, it's incredibly entangled with our financial system at this point. Yeah. Like, and just sort of runs through, you know, this decentralized form of currency just runs through all of our very central banks and is honestly like tied up too with our very real money.

But I remember, do you guys remember when we discovered like HSBC had money laundered for certain cartels?

Yeah. Like in Iran and.

Yeah.

Right. And, and, you know, the SEC and the DOJ never catch up with anything and they're just like, "Oh, I'm sorry. Did we make $10 billion over that? Here's $2 billion. We're cool, right?"

Yeah. So cool.

This is so much worse if the titans and pillars of our financial industry are are the very conduits to this black market economy that allows the United States' enemies to evade any of our sanctions. What are we doing?

I mean, we ourselves are evading our sanctions. We're, we're buying oil from Iran. Like it's very, I don't know how serious any of this stuff is anymore.

Yeah. And I remember reading that last year Iran's, uh, cryptocurrency ecosystem grew to like nearly $8 billion. Like it's not small, the avoiding of sanctions, most likely. And I mean, we're the largest holder of Bitcoin at this point. So it's really a tool of states and it's going to keep spiraling if all these politicians have no incentive to regulate.

And here's, here's my guess. Even Khamenei wouldn't be so shameless as to create an Ayatollah coin. Even Khamenei would not. He would be like, "Look, I don't, I don't want to rip people off to that extent. I'm."

That seems a little scammy.

Yeah.

"I'm a crazy dictator who wants them to live in, but I, even I would not. That seems."

A bridge too far. That's.

Feels dirty. Just feels dirty to me. [ __ ] crazy. Britney, Britney, what, what, what do people want from from us this week?

Here we go.

Come on.

Uh, John, do you think presidents and governors should have the power to grant pardons?

It depends on if I'm friends with them. Uh, I, I think, uh, I, I do think there is value within the pardon, uh, system. Uh, I just think you, it has to be done, uh, where you're like rod and reel fishing, not just throwing a net at and going, "Yeah, all right. 3,000 people, they're go, they're fine." But I, I, I mean, I would say the pardon, it just shouldn't be absolute. That there should be some, uh, process within the court system that can redress those that are, uh, and look, let's face facts, the Supreme Court has made it so that corruption no longer really exists in this country unless it's like you write on a piece of paper and go, "Here's $10,000," and you have to do these three things, like unless it's such explicit quid pro quo. But, uh, I mean, the selling of pardons, the fact that, uh, money grants you access to our judicial system in that way. Don't rich people have enough of an advantage?

Give them more. Why not?

They are all satisfied.

Yeah.

I mean, would you guys get rid of it completely?

No. I mean, well, it's hard. And I feel like now with the ways that we're seeing it so abused, it's like you would kind of rather that it just went away. But like we have such, there's such failures in the justice system that you want something to exist in that regard. But

Right.

And you do want to redress and and think about what felonies do to a person's life and you do want a system that allows for mercy and grace.

Absolutely. Yes. Yes. I mean, I would love if it didn't have to go all the way to a presidential pardon or a governor's pardon in order to get that justice for people, but sometimes it does.

Oh, Jillian, I, I don't know. What do the kids do now? They do this with their fingers on that. That's I'm, I'm giving you.

Although, you know, when I was a kid, this was just the way that you attacked, uh, your, your brother.

All right. Uh, what, what else? What else? What else? Uh, John, is it just a coincidence that TDS stands for both The Daily Show and Trump Derangement Syndrome?

Listen, we were here first.

That's all I'm going to say. These are my initials. If anything, this is copyright infringement, uh, that that that he is purporting on us. Uh, but, but we were, we were here first and it will always stand for The Daily Show. John, do you think that with those initials and you possibly appearing in an image of Trump as maybe Jesus, that maybe someone's sending you a sign?

Listen, when I saw that image.

Yeah.

And I, the people, it's a podcast. You can't, you can't see the image. There's the image of Trump as a, I'm sorry. He, he believes as a physician, by the way, wearing.

You know, it's, it's literally the picture you always see of Jesus with the light in his hand healing somebody. But somehow Trump was like, I think that's from the pit. Like he's such a [ __ ] like he's such a lazy liar now. He doesn't even.

He's that he's that comfortable with us that the magic is gone from our relationship. He doesn't even try anymore when it comes to the lying. Uh, when I did see that image, I was like, "Wait, I I know I don't look great. It is uncanny." Honestly, when I saw I thought it was you and then when you brought it up, I was like, "Oh, good. It wasn't just me."

Can I tell you what's most upsetting about it is it's clearly an AI picture. So, someone had to write in uh Trump as Jesus uh with eagles and fireworks and all this stuff and uh just grab me a sickly looking man. Like that's clearly the prompt to AI was and we need somebody in the bed. Somebody robust. No, no, no. Make it like somebody that looks like they are in a bed in need of divine healing. Oh no. Brutal. And it's [ __ ] exact. Like it's not even Oh, that like I really thought like did they use a like is that what that is? It's very possible. It is right. It's a little too close. Somebody wrote in healing John Stewart of his Trump derangement syndrome. There you go. Oh, that's what it was. That would make me feel better than random computer image of sickly man on bed that could use divine light. You know, the worst part about the whole thing is he was laying his hands on my head, his little Trumpy hands. Yeah. That's not I didn't I didn't I didn't need that aspect of it. And I love the people that I'm surrounded by on the bed. Yeah. The like the lady. So hopeful. I hope he's okay. He's so low on vitamin D. I hope he's okay. I really couldn't believe how busy that image was. It was like Lisa Frank for MAGA. There's just like so much chaos. So surprising. His taste is normally not not garish in that. It literally is.

Have you seen, by the way, a wonderful thing to do? Somebody should do a time lapse of the Oval Office uh since he's been in there cuz he keeps like at a certain point it's just going to look like my grandma's apartment in Brooklyn. Like there's it's just going to be chachkas that she [ __ ] won on the boardwalk at Coney Island and like a little jar of butterscotch candy. My grandma still has all of that. I'd take the butterscotch. They lived above a candy store in Benson and you'd walk into her apartment and it was just like are you opening up a vintage shop? Like what are we what are we doing in here? That sounds cozier than the Oval Office. So yeah, sounds like a mind palace. It was cozy and also slanted. So when you walked on it, you literally looked like you felt like you were walking and you were just going to go right out the window.

Um uh last one, Britney. Last one. John, has anyone interesting slid into your DMs? Uh, that's a great question. I don't know. Yeah, we talked about this before. I don't know what that So, so there are interesting people have commented like Jack White I put up uh the drum set and Jack White or whoever runs whoever runs Jack White's thing was like cool setup man and I was like obviously no chill like come by anytime let's play drums. Uh, so that was like ridiculous. So you read the comments. Oh, you got to read the comments, which they told you not to do. But yes, I understand. Yeah. And I would especially say after the crypto episode, maybe take a break from reading the comments for a few days. You have to read Let me Let me tell you why. Why should I feel good about myself? Why shouldn't I spend a little time having people beat the [ __ ] out of me uh with uh with their own commentary? Uh but the DMs I don't know. I'm tempted to ask you to open them right now and like read the first one. Okay. You see where it says requests on the right hand side? Oh yeah. Hit that baby. I have 10 of them. Let's see. That's all. Yeah. Oh, okay. It Oh, all right. Oh, no. I am never doing that again. That is for sure. Oh, [ __ ] Oh, no. Okay. Are you all right? We'll never do it again. I'm sorry. You need to be healed by Trump now. I feel like one of those things where like it's it's the end of Raiders and I opened up the Ark of the Covenant. I'm just like melted. I'm so sorry. Oh, that is correct.

Well, how Britney, how how do they get in touch with us? Not your DMs. Thanks. That's not all right. Uh, Twitter, we are Weekly Show Pod, Instagram threads, Tik Tok, Blue Sky. We are Weekly Show podcast. And you can like, subscribe, and comment on our YouTube channel, The Weekly Show at John Stewart. Uh, fabulous, fabulous job. Uh, everybody, fascinating, uh, episode as always. Thanks to our fabulous staff and crew. Lead producer Lauren Walker, producer Britney MDIC, producer Jillian Spear, video editor and engineer Rob Vlo, audio editor and engineer Nicole Boyce, and our executive producers Chris McShane, Katie Gray. All right, we will see you guys next week. The Weekly Show with John Stewart is a Comedy Central podcast. It's produced by Paramount Audio and Bus Boy Productions.