Is Crypto Dead? Or More Influential Than Ever?

The hype over cryptocurrency may have faded since the fall of Sam Bankman-Fried and FTX, but beneath the surface, a lot of real money is involved, including the millions being funneled into the American political system. The actor turned documentarian Ben McKenzie joins “Galaxy Brain” host Charlie Warzel to talk about the current state of cryptocurrency, why he became interested in investigating it, and how the crypto craze influenced some people’s enthusiasm, or lack thereof, about AI. Get more from your favorite Atlantic voices when you subscribe. You’ll enjoy unlimited access to Pulitzer-winning journalism, from clear-eyed analysis and insight on breaking news to fascinating explorations of our world. Atlantic subscribers also get access to exclusive subscriber audio in Apple Podcasts. Subscribe today at TheAtlantic.com/Listener. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Tired of rage scrolling through AI slop and clickbait just to get a handle on today's news? Meet Inpress, the algorithm-free news app that makes it fun and rewarding to stay informed. Track your media literacy and rediscover reality. Download today at inpress.app. That's I, N as in news nerd, press.

• 0:20Speaker 01

  Do you want to hear about visionaries creating a better world? People working in conservation, exploration, science and tech alongside storytellers imagining and creating a better future. I'm Alex Honnold, professional rock climber and founder of the Honnold Foundation, bringing you season six of Planet Visionaries. This season, I speak to guests like National Geographic photographer Tom Pescek and Anna Rappman, executive director of the Jane Goodall Institute, USA, in partnership with the Rolex Perpetual Planet Initiative. Watch Planet Visionaries on YouTube or wherever you get your podcasts.

• 0:50Charlie Warzel?

  The big joke always about crypto or Bitcoin is that, you know, it is a technology in search of a actual use case, right? And my question is, is this the first truly useful application for cryptocurrencies, which is political power?

• 1:06Speaker 03

  Not the, it's not the first. I mean, the first was buying drugs online.

• 1:12Charlie Warzel?

  Fair.

• 1:20Charlie Warzel?

  I'm Charlie Warzel, and this is Galaxy Brain, a show where today, we're going to call up a TV star and ask him the following question. Is crypto dead, dying, dormant, or is it thriving in 2026? Now, thankfully, we've chosen the right TV star for this very specific job. If you were alive and conscious in the early 2000s, you've likely encountered Ben McKenzie on a television screen, on an online recap, or a magazine cover. He played the heartthrob Ryan Atwood on The O.C., and he's parlayed that into a career on other shows like Southland and Gotham. But then, during COVID, something weird happened, and McKenzie became obsessed with cryptocurrency. Now, unlike other celebrities who spent the

• 2:03Charlie Warzel?

  pandemic shilling it, McKenzie started investigating it. He wrote a bestselling book with the reporter Jacob Silverman, and then he made a documentary. It's called Everyone is Lying to You for Money. Now, recently, I met McKenzie at the Atlantic Festival, and I wanted to talk to him and bring him on to speak about his work, because it is a very strange moment for crypto. After the fall of FTX and Sam Bankman-Fried around 2022, it feels like we've heard less about the technology. But while the early 2020s hype has largely faded, crypto is not gone. In 2024, crypto companies threw millions of dollars into American elections,

• 2:45Charlie Warzel?

  elevating pro-crypto candidates and trying to take down its skeptics. And at the same time, Donald Trump and his family became entangled with their own crypto projects. Democrats in the House Judiciary Committee called it, quote, "a multi-billion-dollar crypto empire fueled by self-dealing and corrupt foreign interests." Since then, crypto's presence has been somewhat quieter in the headlines, but arguably more influential than in the days where cartoon ape NFTs were selling for six figures. This summer, in a 927-page disclosure to the U.S. Office of Government Ethics, it was revealed that in the first year of Trump's second term, the president made $635 million from the

• 3:25Charlie Warzel?

  meme coins using his name, and that his crypto holdings exceeded $1 billion. Crypto money is also pouring into next month's midterm races. Back in 2024, I wrote that crypto was a perfect fit for the turbulence and the distrust of the 2020s, as well as the nihilism and the corruption of the Trump era. And so I wanted to bring Ben on to talk about all of this. Is political influence crypto's most successful use case? Why aren't people paying more attention to how crypto is being wielded by Trump and the people around him? How on earth did we all get here? And where is it all leading? Ben McKenzie will join me to discuss it all. But first, I just wanted to say, we

• 4:07Charlie Warzel?

  are doing an Ask Me Anything episode later this year, and we would really like your submissions. You can write in to Charlie at theatlantic.com with any burning question that you have for me or the show. I look forward to reading it. Put Galaxy Brain AMA in the subject line. And now, Ben McKenzie.

• 4:33Charlie Warzel?

  Ben McKenzie, welcome to Galaxy Brain.

• 4:36Speaker 03

  Hi, Charlie.

• 4:38Charlie Warzel?

  Thank you for coming on.

• 4:39Speaker 03

  Thanks for having me.

• 4:40Charlie Warzel?

  Yeah. So you said that your interest in starting to investigate cryptocurrency, the career pivot that you did, was born out of a combination of the pandemic and a midlife crisis. Unpack that for me. What happened?

• 4:55Speaker 03

  Oh, nice. So usually, my therapy is on Mondays, but I get a little-

• 4:59Charlie Warzel?

  We're doing it on Friday.

• 5:00Speaker 03

  I love this. Yeah, so when the pandemic hit, I'd done three different television series. I met my now-wife on the third show, and we started a family. And I loved what I did, but it was becoming a bit repetitious. And my wife, Morena Bakren, who's an actress as well, she has chronic asthma. And because New York was hit first, we didn't know what was going on. And so we moved out of the city briefly, out of fear, basically. And so I'm sitting in like the country with like nothing to do. And that's when the crypto

• 5:40Speaker 03

  thing happened, because a buddy of mine came to me saying I should buy Bitcoin. The celebrities were selling it. I had never really paid attention to it. But my buddy has given me terrible financial advice before. He, in the mid aughts, when I was on my first TV show, The O.C., he encouraged me to invest in a company that had supposedly produced synthetic blood. And they were going to make a fortune. And so Dave and I both invested in this company, mild, not a major investment, but I think I maybe put in 10 grand. But I, but I, we lost most of it, you know, almost immediately. Because it was probably some sort of penny stock bump and dump. Wasn't Theranos, some precursor.

• 6:25Charlie Warzel?

  I was gonna say, it's like hipster Theranos, right?

• 6:27Speaker 03

  Yeah.

• 6:28Charlie Warzel?

  You were in that before it was cool. You were in the blood scams before-

• 6:31Speaker 03

  Totally. It's almost like Theranos didn't dream big enough, you know, like synthetic blood, that would, that would really change things, you know? So anyway, when Dave came back to me in 2020 and said, you should buy Bitcoin, I was like, Dave, I'm not going to do that. But tell me about it, like, explain this to me, because I really hadn't paid any attention to it. And I have an undergraduate degree in economics from the University of Virginia. I hadn't used it much in 20 years of showbiz. But, you know, one thing that I remembered in my middle-aged fog of a brain from Econ 101 is, you know, currencies, monies, you can usually buy stuff with them. One of the things you can do with them is

• 7:13Speaker 03

  buy things and sell things. And so Dave, can I buy stuff with this crypto stuff? He's like, ah, you know, you could buy drugs online, probably. I, you know, hey, that's a use case. But he really just couldn't, he couldn't give me even the most basic of answers as to what this thing was. And so I, my curiosity was piqued, and I fell down a rabbit hole pretty hard, where I was sort of fascinated by the, I guess I would say myriad intellectual fallacies of the crypto believers, in terms of their, their misunderstandings of money and of how private money works versus public money and things like that. But I was also

• 7:55Speaker 03

  fascinated by the true crime of it all. I love true crime. And I particularly like a subgenre of true crime I call stupid crime, or Cohen Brothers-esque crime, where the criminals are like, obviously committing crimes, sometimes via tweets. And, you know, and then they turn on each other when the feds come, because as much as they say they're a community, like, you know, when the shit hits the fan, they all turn on each other and start, start, you know, trying to flip in order to save their skin. So crypto had a lot of that stuff, and I couldn't give up.

• 8:26Charlie Warzel?

  This, this brings me, I mean, there's two, there's two elements here. The first is that, what's interesting about you getting into this during the pandemic is, I think the pandemic basically produced the opposite effect on so many people to dive into crypto, right? Like, in this moment where people are tethered, you know, to their computers, they can't go anywhere, this idea of digital money, the hype around like the NFTs and things like that shifted it. I don't know if you could ever say it became cool, but it certainly became like, it had a cultural cachet. And I'm, I'm curious what you think the pandemic's effect was on, on this industry?

• 9:06Speaker 03

  Oh, it was huge. The crypto advocates will say Bitcoin has no marketing department, right? That like, there's- Synonymous force Satoshi Nakamoto created out of thin air. And so it's this decentralized thing. But in reality, because there isn't a product with crypto, I mean, all you're buying is lines of computer code stored on ledgers called blockchains. They don't have any relationship to anything in the real world. They don't signify ownership of any physical asset. Really, all you're buying is a story. So it's not that Bitcoin has no market environment. It's that crypto is only marketing. That's all it is, is marketing, really. It's just convincing people to give you their real money in exchange for the promise

• 9:48Speaker 03

  that they're going to get wealthy with this crypto stuff, which they don't really understand usually. That dynamic really leads you to manias and bubbles. And the bubble that was created in the pandemic, I do think, was somewhat a result of people being at home, being on their phones all the time. There's nothing to do. Sports was briefly shut down. It was hard to gamble on sports for a little while. And then crypto was a new thing to gamble on. And once the money, real money started coming in, it feeds itself because then the crypto companies use the money from the customers to pay for the advertising budgets and the celebrities.

• 10:28Speaker 03

  And sort of by the end of it, you have the most famous people in the world selling you on this thing that I regard as a Ponzi scheme.

• 10:37Charlie Warzel?

  You know, that's so interesting, that piece about when the world shut down, there was nothing to gamble on, like at all, like not just sports, right? There's just like nothing, like no one was doing anything. And the only thing I guess you have is like the stock market, which is in, you know, at that moment in the pandemic, especially really early on, was in like this free fall. And it's like, oh, I don't want to, you know, put all my money into that type of thing. Like, I hadn't thought about the fact that the pandemic provided like a chance for them to kind of corner the market in speculative assets. That's like, so fascinating.

• 11:11Speaker 03

  Yeah, it's also, it was gambling, but better because it was also like the quote unquote "future of money," which is really funny to an amateur economist like myself because actually crypto is the past of money. And we could talk about private money, but like, we've actually tried this before and it didn't work. But they're talking about it's the future of money and like, you're going to be really smart. If you invest, you're going to be, you're sort of ahead of the curve, right? You're a part of the future. You're, this dynamic is very much emperor's new clothes, right? Like, only the smartest people, only the people of highest station can perceive these imaginary clothes that the tailors weave.

• 11:51Speaker 03

  And so adult after adult is tricked into not believing their own eyes because they don't want to appear foolish. And I think that dynamic was really happening because the celebrities were out there selling it. And once something gets so big and it's on your TV all the time, you start to doubt yourself, you start to say, well, maybe there is something there, right? I mean, how could all of these incredibly famous, powerful people believe in this thing if it's not true? The economist who influenced me the most was Robert Schiller, behavioral economist. And he talks about naturally occurring Ponzi schemes, which are the price of a speculative asset rises far beyond what it could really be worth.

• 12:32Speaker 03

  But people see the price rising, which draws them in to invest, which sends the price higher, which draws more people in. So these things kind of like take on a life of their own.

• 12:41Charlie Warzel?

  I am interested, though, in a point you made just a minute ago, where you said, we've tried this before. When did we try this before?

• 12:48Speaker 03

  We tried it before in the 19th century, during what was called the free banking era. The free banking era was an attempt to create a banking system as we moved west, met west being like now sort of the middle of the country. But back then, banks were allowed to issue their own notes, their own currencies, as long as they held a certain amount of state bonds. And I think the idea, it was well intentioned. It worked better in places like New York that had more access to capital. But because they were tethered to these state bonds, which were very volatile, the whole system really just didn't work very well. And ultimately, it was scrapped and replaced with a central bank.

• 13:30Speaker 03

  Because, you know, the only way we've really been able to scale the trust that's necessary in an economy, like money really is just trust. Do you take a dollar bill from me, not because you trust me, but because you trust that you can use it? The only way we've been able to scale that trust is through government issue. And so when the crypto guys talk about, oh, it's the future of money. Well, if the money isn't coming from the government, where's it coming from? It's coming from corporations and individuals, whether it's World Liberty Financial, in the case of Donald Trump, or even Bitcoin, the majority of the Bitcoin that are created now, that quote unquote "mind," these crypto minds, computers guessing at random.

• 14:12Charlie Warzel?

  Yeah, solving puzzles.

• 14:14Speaker 03

  Solving puzzles in order to, on the off chance they want to bet coin. It should, I think, to, I'm a leftist, so to me, the idea of corporate money is just sort of obviously not a good idea. But it's also something that we've tried before and it's failed.

• 14:30Charlie Warzel?

  So you embarked on this journey, basically you turned yourself into a reporter, working alongside a reporter.

• 14:38Speaker 03

  Yeah, working with a good reporter, yeah.

• 14:39Charlie Warzel?

  Jacob Silverman, right?

• 14:40Speaker 03

  Mm-hmm.

• 14:41Charlie Warzel?

  Wrote a bestselling book about your journey into this world and then did this documentary, which is out that people can see, everyone's lying to you for money. And in this, you spent so much time in the world talking to regular people who use or love crypto. And I'm curious if we could walk through a little bit here, like a taxonomy of crypto believers.

• 15:05Speaker 03

  Well, it's a lot of dudes. It's very heavily male.

• 15:10Charlie Warzel?

  It's a lot of dudes.

• 15:10Speaker 03

  I think I've seen polls where it's like two to one. That feels a little low to me. When I was going, at least when I went to the Bitcoin convention, the Bitcoin conference in Miami in 2022, which is like the largest Bitcoin conference every year, when you walked around the halls, there obviously were women as well. But it was a very heavily male thing of sort of, it was kind of like a trade show, right? I mean, you're walking from booth to booth, people are selling you on different things. But guys are drinking and chatting and, you know, partying. And that was really the vibe. When you talk to individual investors, I mean, they're all going to have different reasons. I describe it in the movie as, because again, there's no real product there.

• 15:54Speaker 03

  You're believing in a story that crypto is going to make you rich or give you what you want. So crypto is really, to me, a projection of the hopes and dreams of all of these different investors. They all want something different out of it. I mean, it's all broadly the same, if they want to get rich. But it also gives them a sense of identity, of shared community to some degree. And what's interesting, though, is that outside of the big conferences, you know, crypto really exists only online. It's an online phenomenon. I mean, blockchain and everything, it's not something that's in the real world. So a lot of the sense of community is fake. It's not real. I talked to the victims of the Celsius scam, which was all guys.

• 16:38Speaker 03

  And I mean, we posted on a Reddit board for victims and only guys responded to us. And I asked them about this sense of community because Celsius was pitching itself as a community bank, or like a community bank, except they didn't have a banking license. But in reality, what was happening was they had a really nice website and they had this guy, Alex Mashinsky, at the center of it. And they were telling people, give us your crypto and we'll give you like 15% return every year on your crypto. So we're better than a bank. We're going to give you like this incredible rate of return, which is literally a red flag for a Ponzi scheme. If you go on the SEC's website, seven red flags for Ponzi schemes, one of them is promising guaranteed returns.

• 17:23Speaker 03

  You can't, you can't do that. It doesn't work. I mean, I guess you could say, I'll give you the rate of treasuries, but 15% is impossible. And so it was a Ponzi scheme and it fell apart and these guys lost money. And so I asked them, like, what about this community? Was this community real? And several of them said, no, I think it was always just a lie. Because it's, it's very easy to fake things online. It's much harder to run scams in real life.

• 17:48Charlie Warzel?

  You saying that basically it's a projection, right, of everyone's, of everyone's hopes and dreams? I mean, it feels to me like it is so inextricable from so many of like the broader societal concerns that people have, especially younger people with the, the economist Kyle Scanlon has this phrase, like the, the lack of a path to predictable progress, right? With like, you know, jobs and having the stability and the dream of, you know, the middle class American dream being harder and harder to attain for people. And the idea that, you know, that crypto is selling this story to you in the same way that like, you know, gambling on DraftKings or something like that is selling, is selling a kind of story.

• 18:32Charlie Warzel?

  It's, you know, in so many ways, it's combining that frustration with the idea that like, I don't know how to get ahead in this thing. And it's pairing a fake seeming community with that idea of like, oh, here's a pathway for, for success. I think that it's really interesting that, you know, when I'm asking you for a taxonomy of those people, it's like, no, no, no, it's just like, it's in the eye of the beholder, right? It's whatever you need in that moment that crypto can provide you.

• 19:03Speaker 03

  Right, because you're on your phone and you're scrolling through social media and you're seeing a post of someone who got fabulously wealthy on cryptocurrency and they're showing off their cars and their houses and their things like, and, and, and maybe that's the post to respond to. Like, that might feel noxious to you and me, but to a lot of young guys, that's, that sounds like, you know, the dream, right? It's, I came away feeling a lot of sympathy for the victims of Celsius that I interviewed. There's this one guy named Joe, who was from Fort Worth. I'm from Austin, so we bonded over barbecue and Texas football. But he was investing in Celsius because he wanted to make a little extra money so

• 19:48Speaker 03

  he could spend more time with his daughter. And he felt like, because he lost the money, he let her down. And that really touched me and made me kind of feel, maybe this is obvious, but that, that to really address the problems of cryptocurrency, we have to fix our economy so that it does work better for people, so that they don't feel like they have to gamble. And it also requires, I think, you know, a fair amount of regulation of these social media companies, which are just rife with misinformation and manipulation of, of these markets. You know, people have this view that this crypto thing is really popular, but if you look at the numbers, it's, it's really not.

• 20:40Speaker 00

  If you're trying to get news today, you'll find a lot of biased algorithms, rage bait and AI noise. Thanks, social media. That's where Inpress comes in. It's a social platform on top of factual journalism, not the other way around. Track your reading and earn points. It's like Strava for your brain. Plus, you can connect with other users in your city who share your genuine curiosity. Ditch the echo chamber for reality with Inpress. Download it today for iOS or Android at inpress.app. That's I, N as in news nerd, press.

• 21:13Speaker 01

  Do you want to hear about visionaries creating a better world? People working in conservation, exploration, science and tech alongside storytellers imagining and creating a better future. I'm Alex Honnold, professional rock climber and founder of the Honnold Foundation, bringing you season six of Planet Visionaries. This season, I speak to guests like National Geographic photographer Tom Pescek and Anna Rattman, executive director of the Jane Goodall Institute USA, in partnership with the Rolex Perpetual Planet Initiative. Watch Planet Visionaries on YouTube or wherever you get your podcasts.

• 21:45Charlie Warzel?

  You sat down with Sam Bankman-Fried pretty much sort of as the walls were probably closing in on him a couple of months before the whole FTX thing, you know, crumbles down. And you were one of the people, I feel like, who, and again, that interview wasn't, I don't believe, made public till after, but you came to him skeptical. And what I think is really interesting, seeing that, is what was happening in tandem, where he's on magazine covers, he's doing, you know, all kinds of conferences and cable news hits and talking to different people. And in some places, he's saying the quiet part out loud. Like, there is a moment

• 22:29Charlie Warzel?

  where he essentially, in this great Bloomberg podcast, he's explaining what yield farming is to Bloomberg's Matt Levine. And when he describes the whole thing, Matt Levine says, this is a great quote, "I think of myself as like a fairly cynical person, and that is so much more cynical than how I would have described farming." You're just like, "Well, I'm in the Ponzi business and it's pretty good." And SBF just goes, "That's a pretty reasonable response," and quote, "a depressing amount of validity." And so my question for you here is, why do you think everyone was so blind to what was going on? Like, here is this guy who's everywhere. He's the boy wonder. Like, why do you think

• 23:13Charlie Warzel?

  so many people didn't see through him and FTX and all that?

• 23:17Speaker 03

  I think that, I think that some people did, right? Obviously, Matt Levine was not having it. That was, that is one of my favorite interviews as well. But at the same time, because Sam had made, really, we now know, stolen his customers' money, but quote unquote, "made" all this money through his crypto exchange, through his trading firm, he had a lot of money to spend to burnish his image. And so he was getting feted by all of these publications. I don't know how the economics work exactly, but, you know, if you have a desk set up at a major media organization to cover cryptocurrency, where is your advertising coming from on that desk? My guess is your advertising is coming from the crypto companies.

• 24:01Speaker 03

  And are you, how hard are you looking at the reality of the crypto? But you tell me. I mean, I see you sort of thinking about that. I'm curious. I'm not a real journalist. I only, you know, like, I did a little light journalism with Jacob, but Jacob's a real journalist, and I appreciate what you guys do. But I was trying to figure out why journalists, and many were, many were asking the right questions. But how did it redound to me? Shouldn't it, shouldn't have?

• 24:29Charlie Warzel?

  Yeah, I would, I would, I mean, there were people, I'd like to think of myself as someone who is skeptical of a lot of this. I mean, I think some of it is, is, you know, getting, getting access, like, you're a celebrity. It seems like DMing him worked better than it did when I tried to DM him at the time. But what I would say is, like, that point about, like, the, you know, like, where's the advertising coming from on these desks? I'd push back on that, because I think a lot of these media companies and stuff don't actually want to get mired in that. And there is the reputational hazard. What I think is real, though, what I think is actually the part of this, is the FOMO element that you

• 25:13Charlie Warzel?

  were talking about, just on the side of, of like, the normies who are investing and getting involved. There is a FOMO, I think, as a tech writer, as someone who covers this industry, when something new comes out in this way, like, you don't want to be massively wrong, right? Like, there is, there is this, there's this old, I believe it's a Newsweek story, but some, like, columnist who wrote this piece back in, like, you know, 1997 or sometime like that, I'm not sure exactly the date, that's basically like, "This internet thing's never going to take off. This thing is, you know, this thing is BS," whatever. Nobody wants to be that person, right? Nobody wants to be the person who's going to retroactively

• 25:57Charlie Warzel?

  miss this thing, miss. And there's something you said way early in this conversation that I think speaks to how a lot of technologists now, and venture capitalists and people, use this FOMO feeling to raise money, to get people involved, to generate the hype cycle, which is this idea of, yeah, it's complicated, and you just, like, you just don't understand it. Like, you just, like, you lack the technical expertise. If you dove into the white papers on the blockchain, if you really got deep in the weeds, which you're either not able to because you're not smart enough, or, you know, you're lazy or whatever, if you've done the work, you would see that this is the future, this is the thing, right? And

• 26:37Charlie Warzel?

  I think, like, Sam's affect of, you know, being like schlubby and just wearing the shorts and doing whatever, and, you know, allegedly taking a lot of stimulants to stay up all night and trade and find this thing. It was like, "Oh, this guy is like, a wonder boy," right? In some, in some way. And I'm just Joe Schmo, who, you know, is skeptical of this thing. And I feel like that, that's the playbook. Like, that's the thing. And it's not nefarious, it's more, these folks are playing off of the insecurities of everyone else, thinking, "I must just not be seeing it here," which is sort of, seemed to be the initial thing that, like, led you into all this, right? You're like, "What am I not

• 27:18Charlie Warzel?

  seeing here? Let me go investigate." And I think a lot of people just, instead of investigating, like you did, were just like, "Well, let's just, um, let's put him on the magazine cover."

• 27:28Speaker 03

  Yeah, yeah. I mean, he had pat responses to a lot of the questions. So, you know, when I was preparing for the interview, I was watching all of his media hits, including the Matt Levine Odd Lots appearance and others. And I was just struck by the repetition of it all. I mean, I guess it's, I shouldn't have been surprised, because I come from showbiz, I'm used to doing, you know, media junkets and things like that. But he was just repeating the same lines over and over again. But, you know, if you looked just a little bit underneath those lines, they fell apart very quickly. You know, one thing that he would say repeatedly, that he said to me when I asked him, "What does it do? Like, give me one good thing that crypto does," is he says remittances, sending money

• 28:13Speaker 03

  overseas. You know, remittances can be expensive, you have to use MoneyGram or Western Union, they're going to charge you a fee. So what if we built a system with crypto where you didn't have to pay that fee? But I had just come from El Salvador, which is the only country in the world that was trying to use cryptocurrency as real money. And the foundation of the Salvadoran economy, I would argue, is remittances. The 2-3 million people of Salvadoran descent that live primarily in the United States, sending money home, it's a big part of the economy. And so when Bukele, the president, rolled out this crypto scheme and built a system where people could use that to send money home, if it was going

• 28:57Speaker 03

  to work anywhere, it should have worked in El Salvador. And it was an epic disaster. No one used it. It was less than 2% of remittances, according to the government's own figures, were using the Chivo system, the system they built at the time. Now it's less than 1%.

• 29:14Speaker 03

  The notion that this was being used to help poor people in developing countries, you know, send money back and forth just wasn't true in my experience. Like, I had just seen the antithesis of that. And so that felt, things like that felt very frustrating to me. And the whole interview, which was, you know, over an hour, but cut down for the movie, obviously, a lot, was just a series of me asking him a question, him giving me some sort of kind of pat response, me pushing back, and then him just like flailing, just like really not being able to

• 29:47Charlie Warzel?

  Yeah.

• 29:47Speaker 03

  engage in an honest back and forth intellectually about so much of this stuff.

• 29:52Charlie Warzel?

  Yeah. So FTX's collapse, I think it marks a turning point for crypto. And I want to see if you agree with this. So there's, I think it ends like the COVID crypto craze. There's this feeling of distrust, but crypto never fully tanks. And the people who got in early, the people who are perpetrating the scheme, they have a lot of money now. And these people are either in it because they have this deep financial interest in it, or they're true believers and they really care about the anti-institutional side of this, right? That this is a decentralized thing. But what I see here is that these people then take that money and then they buy influence in the form of lobbying in elections.

• 30:36Charlie Warzel?

  So I, tell me a little bit about crypto's influence in politics and lobbying power as you see it, because I think that that is part two of the crypto story. Like, that's where we live now.

• 30:47Speaker 03

  I, I think you're absolutely right. I think that's a good way of, of looking at it, that by 2022, Sam Bankman-Fried had been arrested and a lot of these companies had failed, because it turns out they were actually interconnected. You know, this was not decentralized in the, in any meaningful sense. You know, they had real financial relationships with each other. And so when one fell, many of the others fell. And it was lingering, but to your, you're, you're also correct that if you bought in early, even with the crash in 2022, you were still way ahead. And crypto kind of kept, you know, kind of floundering about for a little, little bit. And then, not to make it all about Trump, but Trump has just been, you can't overstate

• 31:31Speaker 03

  Trump's importance in crypto's resurgence, in my opinion. Because, you know, when he started embracing crypto in the summer of 24, and I think whispers were happening earlier than that, you start to, you start to see the market recover and the price start to go up and up as people realized, you know, this guy has a 50/50 chance of becoming president again. And if he is really pro crypto and knowing Trump's,

• 31:57Speaker 03

  I'd say aggressive businessman tactics, like what he can do with the power of the office of the presidency to help crypto along, people, you know, quite rationally, frankly, bet that, that, that that was going to mean the price was going to go up, right? That this naturally occurring Ponzi scheme was gonna, that dynamic was gonna take off again. And sure enough, it did. And, and the price of Bitcoin hit an all time high of like 120,000.

• 32:25Speaker 03

  Since at least 2022, when I was on the scene, crypto was trying to manipulate the political process. Sam Bankman-Fried was spending a lot of time on Capitol Hill, trying to get a bill through Congress that was affectionately called Sam's Bill,

• 32:43Speaker 03

  that would have shifted the, the regulation of crypto over to the CFTC.

• 32:50Speaker 03

  And, and Sam was spending wildly on, on political campaigns and super PACs. I mean, he spent 40 million donating to the Democrats. It was one Biden's largest donors. The money has only gotten bigger since. In 2024, 40 something percent of all corporate donations in the cycle were from the crypto industry and people associated with it. It's just a staggering amount of money and they're doing the same thing now with the midterms. I, I forget how many hundreds of millions they've spent or have announced that they will spend, but it's, it's an enormous number.

• 33:27Charlie Warzel?

  And were successful too, right? Like, they were successful in primarying candidates. They were successful in, you know, backing the, the right people. And obviously Donald Trump, in the sense of he comes in, he gets rid of some, some regulations, makes, makes for a very crypto-friendly environment for them. My question to you is, the big joke always about crypto or, you know, Bitcoin or, or whatever, is that, you know, it has, it, it is a technology in search of a actual use case, right? And my question is, is this the first truly useful application for cryptocurrencies, which is political power?

• 34:09Speaker 03

  Uh, not the, it's not the first. I mean, the first was buying drugs online.

• 34:15Charlie Warzel?

  Fair.

• 34:15Speaker 03

  I mean, when you look at the history of crypto, it's kind of interesting. It came, comes out in, well, the paper comes out in 08. It actually goes into existence in 09. It kind of flounders around for a little bit, because people, that's a cool idea, but why does it have value? What can I do with this thing? And then the Silk Road really was like this dark web drug marketplace, really was like the, one of the first places where, where Bitcoin had some value, because you, you know, could obscure your identity while buying drugs online. And, and so it's become, you know, all sorts of criminal activity. But I think with Trump, he doesn't hide it. The, the, I think he announced another dinner. He's already held one dinner with the top investors in his meme coin. If you give him a lot of money for his meme coin, you can have dinner with the President of the United States.

• 34:59Speaker 03

  So it's, you know, literally selling access to the president.

• 35:01Charlie Warzel?

  He recently announced, this is an article that I'm looking at from October 1st, a promising to hold, quote, "the most exclusive dinner in the world" for owners of the meme coin. This is a good part to just talk to the audience here about World Liberty Financial, which is the, the, the company that the Trump family has a stake in. Help us understand the story of World Liberty Financial as you know it.

• 35:26Speaker 03

  You know, my understanding is World Liberty was, was set up. The, the, the Witkoff family, or Steve Witkoff has a financial stake.

• 35:37Speaker 03

  His, his kids, obviously, at least Don and Eric, Don Jr. and Eric, they have a stable coin and they have, they have, they had the Trump meme coin. It's, it's just simply a way to cash in on the office. Trump got this huge investment in his stable coin from the UAE. And the head of the largest crypto exchange, Binance, the head of that, Shengpeng Zhao, CZ, he's known as, had pled guilty to money laundering under the Biden administration and spent a couple of months in jail. And Binance had paid, I think, $4.3 billion admitting to money laundering. And Trump pardoned him and CZ now lives in the UAE.

• 36:22Speaker 03

  And this money flowed into Trump's stable coin. Now, obviously, I can't say definitively it's a, it's a quid pro quo, but it certainly looks pretty bad. And in addition, this sheik in the UAE invested in his stable coin and, and then the UAE received these Nvidia AI chips shortly thereafter. So it's, you know, whatever the particulars of World Liberty Financial are, the way it's operating is a way for Trump and his associates to make enormous amounts of money for the power of the office and what they can do for people that want to invest in them.

• 36:56Charlie Warzel?

  Right, but we should, we should also note that the White House has denied any connection between those two deals. An administration spokeswoman called the crypto transaction, quote, "totally unrelated to any government business." But what that makes me think about is this Sam Bankman-Fried line. And I'm going to paraphrase here, but it's something about how everyone talks about how much money there is in politics. But when he got into it, he was actually surprised at how little money there was in politics. And, you know, I think to borrow a phrase from the industry, it seems like crypto solves this, right? Like, you can't donate tons of money to politicians directly, but you can throw a whole bunch of money behind either World Liberty Financial or invest in Trump coin, or something to that effect,

• 37:41Charlie Warzel?

  and put money into the political system. And again, you can't make these direct connections necessarily all the time, right? There's sort of a step in there that, that gives some, you know, quote unquote plausible deniability. But all of this sounds a lot like a bribe. And so my question to you is, how is all of this, how, how is all this legal?

• 38:08Speaker 03

  I, you know, look, I'm not a lawyer. My dad's a lawyer. I come from a family of lawyers, but I'm not a lawyer. I think it's as simple as Trump, you know, that Trump's former personal attorney is the Attorney General of the United States of America. And he runs, Trump runs the DOJ like it's his own personal law firm that's supposed to protect him and go after his enemies. If I was in the Democratic Congress or advising the Democratic Congress, you know, assuming the Democrats at least take the House in the fall, I would say, in my opinion, probably the first task, or at least on the top half a dozen, is document what's happening.

• 38:50Speaker 03

  Start holding hearings, but start recording and subpoenaing records of what exactly is going on. Because this should be illegal. I mean, I, I don't, I don't understand what the, does the emoluments clause just not mean anything? Is it just like, is it just words that are written down that just don't have any, we can't enforce them in any way? And there are, you know, laws on bribery and corruption. But yet, at, at the present time, with the DOJ under his control, it doesn't seem like there's much enforcement of laws against corruption.

• 39:34Speaker 00

  If you're trying to get news today, you'll find a lot of biased algorithms, rage bait and AI noise. Thanks, social media. That's where Inpress comes in. It's a social platform on top of factual journalism, not the other way around. Track your reading and earn points. It's like Strava for your brain. Plus, you can connect with other users in your city who share your genuine curiosity. Ditch the echo chamber for reality with Inpress. Download it today for iOS or Android at inpress.app. That's I, N as in news nerd, press.

• 40:08Speaker 01

  Do you want to hear about visionaries creating a better world? People working in conservation, exploration, science and tech alongside storytellers imagining and creating a better future. I'm Alex Honnold, professional rock climber and founder of the Honnold Foundation, bringing you season six of Planet Visionaries. This season, I speak to guests like National Geographic photographer Tom Peszek and Anna Rappman, executive director of the Jane Goodall Institute, USA, in partnership with the Rolex Perpetual Planet Initiative. Watch Planet Visionaries on YouTube or wherever you get your podcasts.

• 40:39Charlie Warzel?

  It's an odd thing to say now in 2026 because there's just so many competing outrages for our attention. But something that I can't really understand, and I'd like your take on this, is why this isn't more of an outrage? Like, why people, why World Liberty Financial isn't known by more people, right? Like, if you just read out the facts of all of this, right? Like, he's personally made $1.4 billion from this situation here in the sector. Investors in Trump coin and crypto assets in World Liberty Financial are down a reported $4 billion. Why do you think this isn't a bigger deal?

• 41:22Speaker 03

  I think we live in the craziest time. There's just so much going on. I think AI and the fear of what AI can do, the anger at the AI data centers, I think things like that have really kind of taken over from the position that crypto occupied, you know, maybe prior to Trump's reelection in terms of the minds of the public, in terms of like things that they're really mad about. People remark, oh, AI is a scam too. And I understand the mentality there, and I definitely think there are dynamics to that potential AI bubble that, you know, could be similar to the crypto bubble that popped. But AI is a fundamentally

• 42:06Speaker 03

  different technology that, you know, is having a real world impact right now, whereas crypto was the story of a technology that people didn't understand, that didn't work that well. At least for me, part of the problem is even I have to, because I can't do anything about it in the present, because I can't hold Trump accountable in the present because of this dynamic with the DOJ, even I have to to log off sometimes just for mental health. You know, I think if we're going to address the underlying issues with crypto, even just the crime, it's going to take years and years after Trump is out of office to sift through all of this stuff and hopefully hold people to account. But I do think it's really important to hold people that have broken the law to account, whether they're the President of

• 42:48Speaker 03

  the United States or not. Because if we don't, then this trust that is our monetary system, that is our economic system, that is our government, that the trust just breaks down and we get kind of this environment where we feel like we can't trust anything, you know, and people get really, you know, depressed and in some senses complacent, you know, like, what can we do?

• 43:07Charlie Warzel?

  Well, which is a good environment for people to perpetuate grifts and scams and things like that, right? Like, it is a cycle that perpetuates itself. Like, if you get people into this situation where they feel powerless without anything and a complete distrust, then it's easier to sell particular stories. One thing I wanted to address there with the AI stuff is I agree with you that these things are not the same in terms of like one AI is having this real world impact. What I think is interesting, though, is the

• 43:46Charlie Warzel?

  way that the griftier elements of crypto, of the Web three and like metaverse style, you know, hype cycles, the way that those have actually impacted the way that a lot of people think about AI, right? Like, people are conditioned because they were sold this from the tech industry, because the tech industry went all in on the hype train on these things that had proven not really have this value or proven to be scammy in certain ways.

• 44:16Speaker 03

  Yes.

• 44:16Charlie Warzel?

  I think a lot of people are just conditioned to respond to this. And I think that the tech industry has also, very importantly, marketed a lot of artificial intelligence stuff the same way that they tried to market a lot of the crypto stuff, which has led to people kind of associating them or feeling like the scam has to be there, even if it might not be. I wanted to ask, though, what are some of the stories in crypto that you're still tracking right now? Like, what are some of the loose ends? Because the way that I think of this conversation is your time, your investigation into this world very much

• 44:58Charlie Warzel?

  corresponds to the pandemic era froth that sort of ends with the SBF stuff. And now we're in this other realm where crypto is kind of quiet in some ways, but very, very influential. And so I'm just curious, like, what are some of the things that you're still tracking?

• 45:17Speaker 03

  I'm really interested in this company, Tether. Tether is this massive stable coin company that supposedly has something like $200 billion of real money, supposedly has more treasuries than Germany, the entire nation. It is a massive stable coin company that, whose financial interests are represented by Cantor Fitzgerald, their broker, and Howard Lutnick, our Commerce Secretary, you know, was the head of Cantor. Now his sons run it. And Cantor owns a stake in Tether as well as being its broker.

• 45:56Charlie Warzel?

  Explain to people what Tether is real quick.

• 45:59Speaker 03

  It's a stable coin, meaning that it's a cryptocurrency whose price is supposed to be stable. One tether is always supposed to be worth $1. And they're treated as sort of chips in the crypto casinos you can gamble on, but also these kind of synthetic dollars that can be sent anywhere in the world instantaneously. Criminals are able to use these stable coins to get paid for their crimes, to coordinate with other criminals in other locations, and to avoid the banking system, because it doesn't have to, the stable coins don't have to run through a bank. There's a system in Southeast Asia called Hawala, where if you're trying to send money from a small village in India, you can send something

• 46:44Speaker 03

  of value by going to your local Hawala leader, and they'll mark it down. And then on the other end, the wall on the other will mark it down. It's a system of credit. And to me, stable coins are digital Hawala, is a digital Hawala system for international criminal cartels. And tethers are used for all sorts of, I mean, some of the worst criminal activity you can think of. They have just gotten bigger and bigger and bigger, you know, to the point where their interests are being advocated for in the White House by, you know, Lutnick, who raised an enormous amount of money for Trump so that he could be reelected. I'm just interested in what happens with Tether.

• 47:29Charlie Warzel?

  How do you think about crypto right now? Is it losing steam compared to, you know, the boom times of, you know, 2021, 2022? Is it dormant? Is it hibernating? Has crypto shifted from something that, you know, regular retail investors were interested in to something that's exclusively a vehicle for the currently rich? What is the state of it now?

• 48:03Speaker 03

  If you look at like the Fed survey, retail interest in terms of a percentage of the population peaked somewhere around 2021, 2022. It was never that high. I mean, I think the, in terms of like legitimate pollsters that I've seen that have tried to poll this, it was maybe like 16% of the public could ever mess around with cryptocurrency. And most of those people are, you know, throwing in a few hundred bucks, like my buddy Dave, you know, hoping to get rich. But it's not like highly invested in it. But if you look at the Fed survey more recently, the number is down. The number of people in the general public that are buying this thing seems to be going down. And yet crypto, at the same

• 48:44Speaker 03

  time, is working its way further into our regulated financial system and our political system through Trump, but in our economic system through these things called ETFs, exchange traded funds, where a person, if they want to buy some Bitcoin, they go to BlackRock. And BlackRock, which issues a Bitcoin ETF, turns to a crypto exchange Coinbase and says, my client wants some Bitcoin, hold it for us. These ETFs, the ETF market has gotten really big. And it's also getting into our banking system as, you know, Trump has applied for a banking license, his family's applied for a banking license. I think they've gotten a provisional license.

• 49:26Charlie Warzel?

  Yeah.

• 49:26Speaker 03

  The worry to me is not so much that like, there's all these new converts out there, like, oh my God, I'm so excited. Who comes in now? And it's like, you know what I just heard about? Cryptocurrency. You know, like, you'd have to be pretty far off the, you know, where have you been living, buddy? It's more like, it's the like,

• 49:45Charlie Warzel?

  Yeah.

• 49:46Speaker 03

  The virus is spreading into a different part of our body that's even more delicate and could have far worse repercussions. I don't know if that metaphor works, but it's the only thing that came to mind.

• 49:58Charlie Warzel?

  Yeah, the contagion is spreading is scary. I think that's a, I think that's a good place to leave it. We will, hopefully, we can pick up on this conversation with whatever nightmares come next from crypto and our grand experiment with it. But Ben McKenzie, thank you so much for coming on Galaxy Brain. It's a delight.

• 50:16Speaker 03

  Thanks for having me, Charlie. It was a good conversation.

• 50:26Charlie Warzel?

  That's it for us here. Thank you again to my guest, Ben McKenzie. If you liked what you saw here, new episodes of Galaxy Brain drop every Friday. You can subscribe on the Atlantic's YouTube channel, or on Apple, or Spotify, or wherever it is that you get your podcasts. And if you want to support this work and the work of my fellow journalists, you can subscribe to the publication at theatlantic.com/listener. That's theatlantic.com/listener. Thank you so much, and I'll see you on the internet.

• 51:07Speaker 00

  If you're trying to get news today, you'll find a lot of biased algorithms, rage bait and AI noise. Thanks, social media. That's where Inpress comes in. It's a social platform on top of factual journalism, not the other way around. Track your reading and earn points. It's like Strava for your brain. Plus, you can connect with other users in your city who share your genuine curiosity. Ditch the echo chamber for reality with Inpress. Download it today for iOS or Android at inpress.app. That's I, N as in news nerd, press.