By Zeke Faux
Investigating cryptocurrency's spectacular bubble and collapse
Subject
Themes
The cryptocurrency mania of 2020 to 2022 generates trillions of dollars of supposed wealth from digital tokens with no practical use. At the centre of this speculative frenzy sits Tether, a stablecoin that claims every coin is backed by one U.S. dollar but cannot prove where its reserves are. Investigative reporter Zeke Faux, spurred by a friend's Dogecoin profits and his own scepticism, sets out to find Tether's money. His two-year journey takes him from Miami crypto conferences to Italian clinics, Bahamian superyachts, Cambodian trafficking compounds, and the penthouse of a ruined billionaire.
The cryptocurrency mania of 2020 to 2022 generates trillions of dollars of supposed wealth from digital tokens with no practical use. At the centre of this speculative frenzy sits Tether, a stablecoin that claims every coin is backed by one U.S. dollar but cannot prove where its reserves are.…
Number Go Up was published in September 2023, arriving at a moment when the cryptocurrency industry was still reeling from the collapse of FTX and the arrest of Sam Bankman-Fried. The timing proved significant: Bankman-Fried was convicted of fraud in November 2023, just two months after the…
Cryptocurrency's most fundamental vulnerability is the absence of any intrinsic value. Bitcoins are numbers in a spreadsheet. Dogecoins are numbers in a different spreadsheet. Smooth Love Potions are numbers in yet another. None of these tokens generates revenue, pays dividends, or has any practical…
Throughout the cryptocurrency boom, regulators consistently failed to act despite abundant warning signs. The New York attorney general's office, working with just two investigators on $80,000 salaries, was the only governmental body that seriously scrutinised Tether. John Castiglione and Brian…
The cryptocurrency industry's most profound harm lies not in the billions lost by speculators in wealthy nations, but in the devastation inflicted on vulnerable people in the developing world. From Filipino farmers to Cambodian trafficking victims, crypto promised liberation and delivered…
Sam Bankman-Fried's embrace of effective altruism raises uncomfortable questions about whether philanthropic philosophy can become a tool for self-serving rationalisation. Effective altruism, founded on Peter Singer's utilitarian argument that failing to donate to charity is morally equivalent to…
Tether occupies a paradoxical position at the centre of the cryptocurrency ecosystem: it is simultaneously the most questioned financial instrument in crypto and the most indispensable. Every scheme, every exchange, and every speculative bubble depends on this single stablecoin, which functions as…
During the pandemic lockdowns of early 2021, millions of bored, flush consumers begin gambling on cryptocurrencies. Investigative reporter Zeke Faux watches his high school friend Jay buy Dogecoin, a cryptocurrency based on a dog meme, and turn a few hundred dollars into several thousand. Jay taunts…
Devasini discovers Bitcoin in 2012 and sells 20 million unsold CDs for 0.01 Bitcoin each, a stockpile that could later be worth more than $3 billion. He invests in Bitfinex, a crypto exchange whose code was copied from a site programmed by a teenager, and takes over as its de facto leader. When…
Sam Bankman-Fried relocates his exchange FTX to the Bahamas, a territory with centuries of experience welcoming schemers, from Blackbeard's pirates to Meyer Lansky's casinos to cocaine traffickers. Faux arrives in February 2022 to find the twenty-nine-year-old billionaire playing a fantasy video…
Arthur "Art Art" Lapina, an unemployed bar cook in Cabanatuan City, Philippines, discovers the crypto game Axie Infinity during the 2020 lockdown. Players buy teams of cartoon blobs and earn Smooth Love Potion tokens through battles. As potion prices rise, Lapina becomes a local celebrity, hiring…
The crypto industry unravels in the summer of 2022. Do Kwon's $60 billion Terra-Luna scheme collapses when his stablecoin TerraUSD, backed only by another made-up coin called Luna, enters a death spiral. Comedian John Oliver summarises the logic: "One blorp is always worth one dollar. And the reason…
Faux travels twice to Lugano, Switzerland, hoping to confront Devasini. At a Tether-co-hosted conference, former Swiss prosecutor Paolo Bernasconi, who fought the Mafia's "Pizza Connection" money laundering through Swiss banks, points through his office window at the crypto event across the street.…
By Zeke Faux
Subject
Themes
The cryptocurrency mania of 2020 to 2022 generates trillions of dollars of supposed wealth from digital tokens with no practical use. At the centre of this speculative frenzy sits Tether, a stablecoin that claims every coin is backed by one U.S. dollar but cannot prove where its reserves are. Investigative reporter Zeke Faux, spurred by a friend's Dogecoin profits and his own scepticism, sets out to find Tether's money. His two-year journey takes him from Miami crypto conferences to Italian clinics, Bahamian superyachts, Cambodian trafficking compounds, and the penthouse of a ruined billionaire.