WEBVTT - Human Trafficking in the Crypto Rabbit Hole 0:00:13.800 --> 0:00:17.000 Hello, and welcome to What Goes Up, a weekly markets podcast. 0:00:17.040 --> 0:00:20.080 My name is Mike Reagan. I'm a senior editor at Bloomberg. 0:00:19.720 --> 0:00:22.640 And I'm Wildona Hirik, across Acid reporter with Bloomberg, and. 0:00:22.600 --> 0:00:25.160 This week on the show, well WELDNA. I'm not sure 0:00:25.200 --> 0:00:29.720 if listeners quite understand what our work environment is at Bloomberg. 0:00:29.760 --> 0:00:32.360 We're all in this sort of open area. There's not 0:00:32.400 --> 0:00:35.960 even cubicles, there's just desks, no knocks, tweets, so no 0:00:36.040 --> 0:00:40.280 privacy none, and as a result, you can often overhear 0:00:40.760 --> 0:00:44.240 other conversations, other reporters conversations, and I guess it's kind 0:00:44.240 --> 0:00:46.360 of rude to eachstrap, but I mean. 0:00:46.440 --> 0:00:46.919 I do it. 0:00:47.240 --> 0:00:48.000 Yeah, we all do it. 0:00:48.040 --> 0:00:49.400 I listened to your lunch orders. 0:00:51.159 --> 0:00:53.680 But a lot of times what you overhear, what you 0:00:53.760 --> 0:00:56.880 eaveschop on is super boring. You know, oh, why did 0:00:56.880 --> 0:00:59.400 the stock market go Monday? And I'll say, not boring? Sure, 0:00:59.400 --> 0:01:01.760 why is the market up today? What do you think 0:01:01.760 --> 0:01:06.560 of this stock? You know? What does this economic data 0:01:06.600 --> 0:01:09.640 mean for the market. That's where thing. It's very mundane stuff. 0:01:10.080 --> 0:01:12.640 But about a decade ago, I was sitting near a 0:01:12.680 --> 0:01:16.000 guy in next row over from me, who was on 0:01:16.040 --> 0:01:19.760 the phone. I'd say ten hours a day, heavy Boston accent. 0:01:20.760 --> 0:01:24.880 He was the most fun reporter to eavesdrop on I've 0:01:24.920 --> 0:01:28.640 ever had in my career. Everyone else's asking about, you know, 0:01:29.200 --> 0:01:32.520 the latest earnings and you know, what does the java's 0:01:32.560 --> 0:01:35.679 claims number mean? And this guy would be talking about 0:01:35.800 --> 0:01:42.039 scam artists, crime and strip clubs and drugs. Wow. I 0:01:42.080 --> 0:01:44.120 wish I had recorded some of these interviews. It was 0:01:44.160 --> 0:01:47.520 the most entertaining reporter evesdropping I think I've had in 0:01:47.560 --> 0:01:48.040 my career. 0:01:48.440 --> 0:01:50.800 I can only imagine. I'm so jealous. I'm dying of 0:01:50.840 --> 0:01:52.680 jealousy right now because I'd love to hear some of 0:01:52.720 --> 0:01:53.200 this stuff. 0:01:53.200 --> 0:01:55.800 Well, don't be too jealous, because we have him. We 0:01:55.840 --> 0:01:56.640 have him on the show this. 0:01:56.640 --> 0:01:58.960 Week because he wrote a book that was I read 0:01:59.000 --> 0:01:59.320 a lot. 0:01:59.280 --> 0:02:02.040 Of books, not to you know, Oh, I know you do. 0:02:02.200 --> 0:02:03.880 I read a lot of books, but this was like 0:02:03.920 --> 0:02:06.400 the best book I've read this year. It was so fun. 0:02:06.440 --> 0:02:09.640 I read it so fast. Maybe one of these days 0:02:09.639 --> 0:02:11.680 we'll let our audience know what book it. Who the 0:02:11.680 --> 0:02:16.120 guy is without further ado, it's Zeke Fox. He is 0:02:16.240 --> 0:02:19.839 our Bloomberg colleague, and he's the author of the brand 0:02:19.880 --> 0:02:23.120 new book number go up. Inside Crypto's wild rise and 0:02:23.120 --> 0:02:26.160 staggering fall. Zeke, I'm so happy you could join us. 0:02:26.160 --> 0:02:27.520 Thank you so much for coming. 0:02:27.560 --> 0:02:29.760 Thanks for having me and for putting up with my 0:02:29.880 --> 0:02:31.760 really loud conversations all those years. 0:02:32.440 --> 0:02:34.680 And I apologize for Eves wrapping on you all those years, 0:02:34.680 --> 0:02:35.720 but no, it is possible. 0:02:35.800 --> 0:02:37.680 I'm sorry. Yeah, no, he's not sorry. 0:02:37.800 --> 0:02:40.120 What was like do you remember any of the well, so, 0:02:41.320 --> 0:02:44.640 Zeke was pretty famous as an investigative journalist in our 0:02:44.680 --> 0:02:47.760 circles in the financial world, long before Crypto, and I 0:02:47.800 --> 0:02:52.000 think the probably the stuff I was Eves dropping on 0:02:52.240 --> 0:02:56.040 might have been like the payday lender scams. Uh, one 0:02:56.080 --> 0:02:58.239 of the first things you really started digging deep into. 0:02:58.800 --> 0:03:01.079 If I'm not mistaken, I mean, I have to admit that, 0:03:01.120 --> 0:03:03.200 like you said, it's impossible, everyone's going to hear it. 0:03:03.480 --> 0:03:06.360 And I talk pretty loud. I can't control myself. But 0:03:06.440 --> 0:03:08.080 also I know that everyone's listening. 0:03:08.280 --> 0:03:09.760 I want to sit next to you. I'm going to 0:03:10.040 --> 0:03:10.560 request it. 0:03:10.680 --> 0:03:13.160 Every new retrader should have to spend like a month's 0:03:13.440 --> 0:03:15.600 sit next to Zeke and just listening to how he interviews. 0:03:15.680 --> 0:03:16.440 It's a work of art. 0:03:16.639 --> 0:03:19.519 I learned a lot from Max Abelson, who would sit 0:03:19.560 --> 0:03:22.760 near me. It was also very like a loud talker 0:03:23.160 --> 0:03:25.720 and was great at inter getting these billionaires to tell 0:03:25.760 --> 0:03:28.040 him all their secrets. He would be really interested in 0:03:28.080 --> 0:03:30.480 their stories, but also he wouldn't let them off the hook. 0:03:30.520 --> 0:03:32.720 He'd be like, don't just tell me that the new 0:03:32.760 --> 0:03:35.240 CEO of Goldman Sachs is a nice guy? Like how 0:03:35.320 --> 0:03:37.400 is he nice? Was he nice to you last Thursday? 0:03:37.560 --> 0:03:39.320 What did he do that was so nice? How did 0:03:39.320 --> 0:03:42.160 his eyes look while he made that nice statement? 0:03:42.680 --> 0:03:46.000 Okay, so you have your famous in the newsroom and 0:03:46.040 --> 0:03:51.240 outside the newsroom for these strings of very interesting, intriguing stories, 0:03:51.360 --> 0:03:55.240 very interesting characters. Mike mentioned the payday lenders. You have 0:03:55.320 --> 0:03:59.360 so many. But so your new focus is crypto, and 0:03:59.400 --> 0:04:01.920 I want to ask Q what made you go down 0:04:01.960 --> 0:04:03.000 the crypto rabbit hole? 0:04:03.640 --> 0:04:07.280 Resisted looking into crypto? Like you said, I have always 0:04:07.280 --> 0:04:10.360 really liked scams, and people would tell me crypto is 0:04:10.400 --> 0:04:12.600 perfect for you, But there's something about it that I 0:04:12.640 --> 0:04:16.200 didn't like it, because I like when you've got like 0:04:16.240 --> 0:04:18.320 a kind of complicated scam and you have to look 0:04:18.360 --> 0:04:20.880 through all the paperwork and figure out like the loophole 0:04:20.920 --> 0:04:24.000 they're using and with crypto, they're just like, hey, buy 0:04:24.040 --> 0:04:26.919 my new coin, and then like suddenly they're a billionaire. 0:04:27.200 --> 0:04:30.800 I got into it like everybody else through Fomo. I 0:04:30.880 --> 0:04:34.640 had this fuddy who we have like a group chat, 0:04:34.760 --> 0:04:37.520 and he was texting us all about something he called 0:04:37.960 --> 0:04:41.239 doggy coin. And this is like the height of the pandemic. Dudes, 0:04:41.279 --> 0:04:43.080 you got to get some of this doggy coin. It's 0:04:43.080 --> 0:04:47.240 so funny. It's going to go up, and I'm like, 0:04:48.000 --> 0:04:52.159 it's dogecoin. And this already went viral, like several years ago. 0:04:52.680 --> 0:04:54.839 They made fun of it on the Daily Show. It 0:04:54.920 --> 0:04:56.720 was not even funny to begin with. This will never 0:04:56.800 --> 0:04:59.680 happen again. But like he was right, doge coin went 0:04:59.760 --> 0:05:03.520 up and he made a fair amount of money. And 0:05:03.520 --> 0:05:08.160 he's sending us pictures from Disney World. He's like, he said, 0:05:08.279 --> 0:05:11.760 I'm freaking nostra damis. You know, if you had listened 0:05:11.800 --> 0:05:14.560 to me and bought dogecoin, you'd all be rich now 0:05:14.600 --> 0:05:17.760 in Disney World, Yes, which would be a I do 0:05:17.839 --> 0:05:19.240 not want to go there, so all. 0:05:19.160 --> 0:05:22.280 The prices are like extortions. Yeah, he must have made 0:05:22.279 --> 0:05:22.880 a lot of money. 0:05:23.080 --> 0:05:24.839 This primed me to be like, you know what I 0:05:24.920 --> 0:05:28.200 really want to prove I am still right. This stuff 0:05:28.279 --> 0:05:30.640 is dumb. I'm going to look into it. And then 0:05:30.920 --> 0:05:35.080 I Joel Weber, the editor of BusinessWeek, came by and 0:05:35.320 --> 0:05:37.840 was like he had an idea for a crypto story, 0:05:38.200 --> 0:05:40.840 and like in the past I might have turned it down, 0:05:41.120 --> 0:05:43.120 but this time I was like, no, I'm going to 0:05:43.200 --> 0:05:46.360 look into it. And once I did, like the first 0:05:46.880 --> 0:05:48.040 part of it was to go to one of these 0:05:48.040 --> 0:05:50.440 crypto conferences, and I was just like, as soon as 0:05:50.440 --> 0:05:52.919 I started, I was like, oh my god, this is 0:05:52.960 --> 0:05:56.120 a crazy world. Whatever you think about crypto, these people 0:05:56.160 --> 0:05:58.640 are making like billions of dollars. This has got to 0:05:58.640 --> 0:06:00.600 be like one of the craziest things happened in the 0:06:00.640 --> 0:06:02.960 history of finance. It turned into like a two year 0:06:02.960 --> 0:06:05.039 trip down the rabbit hole. By the end, I was 0:06:05.080 --> 0:06:06.760 in like Cambodia. 0:06:06.279 --> 0:06:09.320 As one does. Yeah. But so that initial story from 0:06:09.400 --> 0:06:14.720 Joel was about tether, which listeners who are unaware it's 0:06:14.720 --> 0:06:17.480 a stable coin, which is a crypto coin that's meant 0:06:17.480 --> 0:06:21.080 to track the US dollar exactly one to one, no 0:06:21.120 --> 0:06:23.680 more and no less than. The idea is that he 0:06:23.800 --> 0:06:26.039 maybe you made a bunch of money in crypto, and 0:06:26.040 --> 0:06:29.080 now you want to store it in US dollar or 0:06:29.160 --> 0:06:31.000 stable value, or you want to move it from one 0:06:31.040 --> 0:06:33.680 exchange to the other, or whatever you want to do. 0:06:33.920 --> 0:06:36.320 You want to keep it in that one dollar increment. 0:06:36.480 --> 0:06:39.680 So Joel came here about tether, and that put you 0:06:39.760 --> 0:06:43.120 onto the trail of a guy named Brock Pierce. So 0:06:43.480 --> 0:06:45.599 talk to us about brock Pierce, and you're sort of 0:06:45.600 --> 0:06:49.040 pursuit of him to find him and ask him about 0:06:49.120 --> 0:06:50.120 what's going on with Tether. 0:06:50.520 --> 0:06:53.120 The best resume I've ever seen of anyone in finance. 0:06:53.320 --> 0:06:56.440 He started off early. He was a child actor. He's 0:06:56.560 --> 0:07:01.400 in the Disney classic The Mighty Ducks and he plays 0:07:01.880 --> 0:07:05.159 the coach Gordon Bombay in a flashback when he misses 0:07:05.200 --> 0:07:08.000 this crucial penalty shot that haunts him decades later. 0:07:08.040 --> 0:07:08.280 Away. 0:07:08.760 --> 0:07:10.280 Oh no, it's right at the beginning of the movie. 0:07:10.280 --> 0:07:12.600 Don't worry, So he went on. It wasn't just like 0:07:12.640 --> 0:07:14.880 this one movie. He started in one called First Kid. 0:07:14.920 --> 0:07:17.440 He had kind of like a Macaulay Culkin look. But 0:07:17.520 --> 0:07:21.560 then he quit acting. As a teenager, he gets hired 0:07:21.600 --> 0:07:25.080 at this dot com startup called den. He's given like 0:07:25.120 --> 0:07:27.840 this great title, two hundred and fifty thousand dollars a 0:07:27.880 --> 0:07:33.280 year salary. What happens at Den truly bizarre. Not even 0:07:33.280 --> 0:07:35.520 sure it's appropriate to talk about in this podcast. You'll 0:07:35.560 --> 0:07:37.440 have to read about it. Yeah, But by the end 0:07:37.480 --> 0:07:40.320 of it, he's fled to Spain with the founder of Den, 0:07:40.840 --> 0:07:45.920 and he's gotten really into massively multiplayer online games. He 0:07:46.880 --> 0:07:50.240 ran a virtual item trading companies. Basically, you want to 0:07:50.280 --> 0:07:53.640 get ahead quick in this game everquestor World of Warcraft, 0:07:53.880 --> 0:07:56.280 you could pay real money to buy the megasword and 0:07:56.320 --> 0:07:59.160 then you know, bump up to level seventeen really quick. 0:07:59.360 --> 0:08:04.120 This would be big business, and he eventually hired Steve 0:08:04.200 --> 0:08:08.000 Bannon randomly to be like the chairman of the company. 0:08:08.280 --> 0:08:10.720 They made a big I think they sold it to 0:08:11.680 --> 0:08:13.760 Did they sell it to Goldman Sachs or Goldman Sacks 0:08:13.760 --> 0:08:16.360 broker the deal. Anyway, he gets out of this deal rich, 0:08:16.760 --> 0:08:19.360 and he sees the potential of making real money from 0:08:19.400 --> 0:08:24.560 the virtual world, and he becomes one of the earliest 0:08:25.080 --> 0:08:28.360 investors in crypto. There's some debate over how much credit 0:08:28.360 --> 0:08:31.680 he gets, but he's a co founder of Tether, which 0:08:31.720 --> 0:08:34.120 was this first stable coin. So when I went to 0:08:34.160 --> 0:08:36.440 go look into Tether, the big mystery was like, by 0:08:36.480 --> 0:08:39.040 the time I'm looking into it, Tether claims that they 0:08:39.040 --> 0:08:41.480 have fifty billion dollars in the bank somewhere, but they 0:08:41.480 --> 0:08:43.920 won't say where. So I'm trying to find this fifty 0:08:43.960 --> 0:08:47.280 billion dollars. And at the time, people are really worried 0:08:47.320 --> 0:08:50.280 about this. Jim Kramer's on TV being like this could 0:08:50.320 --> 0:08:53.280 crash everything, Like where's Tether's money? They won't say. Even 0:08:53.400 --> 0:08:55.920 Janet Yellen held a meeting of all the top financial 0:08:55.960 --> 0:09:00.000 regulators where they're like, where's Tether's money, What's gonna happen? 0:09:00.040 --> 0:09:03.959 What does this mean for financial market? Yeah, So as 0:09:04.000 --> 0:09:05.840 I started to look into it, I just couldn't believe 0:09:05.880 --> 0:09:09.800 that this coin that was seemingly so important basically appeared 0:09:09.800 --> 0:09:12.160 to be like the central bank of crypto, a key 0:09:12.200 --> 0:09:16.160 point in the infrastructure holding all these schemes together, had 0:09:16.200 --> 0:09:20.000 been founded by the Mighty Ducks guy. So in the 0:09:20.040 --> 0:09:23.000 book I talk about I went down to a crypto 0:09:23.000 --> 0:09:29.959 conference in Miami and went to a party at Brock's 0:09:30.000 --> 0:09:32.440 house or a house he'd rented for the conference, and 0:09:32.480 --> 0:09:36.679 it was truly just like the weirdest scene, like everyone's 0:09:36.679 --> 0:09:39.280 just sort of milling about, getting like drunk, drunker and drunker. 0:09:39.320 --> 0:09:42.000 Brock's not there, And when After I spend like a 0:09:42.000 --> 0:09:46.240 whole day there, Brock shows up and then immediately disappears. 0:09:46.600 --> 0:09:49.559 I catch up with him at another conference in the Bahamas. 0:09:49.600 --> 0:09:51.840 I hear from a friend of mine is like, hey, 0:09:52.160 --> 0:09:54.480 last night, I was at the craziest party on this yacht. 0:09:54.559 --> 0:09:57.320 It was this mega yacht that this crypto billionaire bought 0:09:57.320 --> 0:10:01.200 from this Russian oligarch. And she's just showing me her Instagram. 0:10:01.480 --> 0:10:04.520 She shows me this video of him jumping off the 0:10:04.600 --> 0:10:06.560 yacht and I'm like, oh my god, Brock's here. So 0:10:06.600 --> 0:10:09.080 I text him. I'm like, can I come to your yacht? 0:10:09.280 --> 0:10:14.480 He sends a speedboat to the sequel. Yes, it was 0:10:14.600 --> 0:10:17.080 very I'm not gonna lie, it was very cool. So 0:10:17.120 --> 0:10:19.559 when we finally talk and get into it and talk 0:10:19.559 --> 0:10:24.360 about Tether, at this point he's sold his stake in 0:10:24.400 --> 0:10:28.280 the company, he says for no money, and he it 0:10:28.360 --> 0:10:29.920 turns out to be kind of like a dead end, 0:10:30.000 --> 0:10:32.840 like he doesn't really know where this fifty billion dollars is. 0:10:33.120 --> 0:10:36.319 But he's a really compelling interview. When we started talking 0:10:36.320 --> 0:10:38.200 about like the mystery and how does he have any 0:10:38.200 --> 0:10:40.760 clues about how to find Tether's money. But he's like 0:10:40.800 --> 0:10:42.840 that do not mess this one up. This could be 0:10:42.880 --> 0:10:45.800 your big chance, and I'm like, I totally agree, But also, 0:10:45.880 --> 0:10:47.440 what's going on here, Brock, I. 0:10:47.400 --> 0:10:49.439 Don't think you guys are thinking of the chance and 0:10:49.520 --> 0:10:51.280 the same sort of outcome. 0:10:52.200 --> 0:10:54.120 Yes, I think what he was saying is that Crypto 0:10:54.200 --> 0:10:55.760 is going to do huge things for the world, and 0:10:55.800 --> 0:10:57.800 if I'm just going to be like another hater, that's 0:10:57.840 --> 0:10:58.839 how it wouldah. 0:11:06.120 --> 0:11:08.960 Teather ends up being the crux of the book. I 0:11:08.960 --> 0:11:13.199 would say, so much revolves around Tether and coming things 0:11:13.320 --> 0:11:16.240 just leading you back to Tether. But one of maybe 0:11:16.280 --> 0:11:21.360 the more interesting avenues was with this character named Vicky, 0:11:21.440 --> 0:11:26.240 who I like to call your pseudo girlfriend, maybe because 0:11:26.280 --> 0:11:28.679 that's an interesting way to put it. So tell us 0:11:28.679 --> 0:11:32.600 who Vicky is, how that relationship developed, and then what 0:11:32.640 --> 0:11:34.960 that led you to. And this is I mean, really, 0:11:35.000 --> 0:11:37.120 this was like such a great part of the book. 0:11:37.440 --> 0:11:40.439 One of the questions I have as throughout my two 0:11:40.520 --> 0:11:43.760 years is who's using tether. One of the people I 0:11:43.840 --> 0:11:45.839 find who's using it a lot I won't get is 0:11:46.080 --> 0:11:49.320 Sam Bankman freed for his exchange FTX. But another thing 0:11:49.360 --> 0:11:51.760 I hear about is people crooks are using this for 0:11:51.880 --> 0:11:55.520 like money laundering, and then one day, I get one 0:11:55.520 --> 0:11:58.720 of those random messages that like everybody gets. It's just 0:11:58.760 --> 0:12:02.200 like a text mess and it's just like, hey, David, 0:12:02.360 --> 0:12:07.400 like how's it going. And I'm like, I'm not David. 0:12:07.400 --> 0:12:11.440 And everyone else ignores these text messages. Yeah, it's like 0:12:11.480 --> 0:12:12.760 I think we got a story here. 0:12:13.000 --> 0:12:15.480 Yeah, I'm like I was kind of like, you know what, 0:12:16.000 --> 0:12:17.959 let's see where this goes. And so I wrote back. 0:12:18.000 --> 0:12:19.760 I was like, I'm not David, I'm Zeke, but like, 0:12:19.800 --> 0:12:23.760 who are you? And she says she's Vicky, and Vicky 0:12:23.800 --> 0:12:26.280 from New York, right from New York. Yes, and we 0:12:26.480 --> 0:12:32.480 kind of become pals. And she doesn't immediately let on 0:12:32.640 --> 0:12:36.000 to what her angle is. She's just telling me about herself, 0:12:36.120 --> 0:12:38.400 asking me what I like to do about my life. 0:12:38.880 --> 0:12:40.400 She asked me to send her a picture. 0:12:41.120 --> 0:12:44.280 It sounds like the typical catfishing scheme at first. Yeah, 0:12:44.320 --> 0:12:46.400 it's not quite that right. I was kind of playing 0:12:46.400 --> 0:12:48.760 along and waiting for this to happen. And what it 0:12:48.840 --> 0:12:50.480 is that she starts to let on that she's a 0:12:50.480 --> 0:12:53.560 great crypto trader, like she's learned some tricks from like 0:12:53.600 --> 0:12:58.040 her uncle or something. After like days of chatting and 0:12:58.440 --> 0:13:00.640 where I finally had to be like, Vicky, I need 0:13:00.679 --> 0:13:02.480 one hundred grand so I can get a Tesla. And 0:13:02.520 --> 0:13:04.280 then she was like, I'll let you in on my secret. 0:13:04.559 --> 0:13:06.520 And this is what I really wanted, what I was 0:13:06.520 --> 0:13:09.800 waiting for. She has me download like a crypto trading 0:13:09.840 --> 0:13:12.520 app that I had to like, she had structured me 0:13:12.520 --> 0:13:14.920 how to sideload it on my iPhone, like it wasn't 0:13:14.960 --> 0:13:19.560 from the official app store, and it looked like pretty legit. 0:13:19.720 --> 0:13:22.280 But this is how the scam works. They get you 0:13:22.320 --> 0:13:27.319 to buy tether on a regular trading app like coinbase, 0:13:27.440 --> 0:13:31.559 orcrypto dot com, and then send it to this special 0:13:31.559 --> 0:13:33.400 app where you're gonna learn how to use the like 0:13:33.440 --> 0:13:37.920 short term nodes, and like, once you've sent the money 0:13:37.920 --> 0:13:41.720 to it was called zbxss, it appears to be in 0:13:41.720 --> 0:13:43.400 your account and everything, just like it would be on 0:13:43.440 --> 0:13:45.760 a normal app, and like if you make trades, they'll 0:13:45.760 --> 0:13:47.760 show you gains. They might even let you make a 0:13:47.760 --> 0:13:50.360 small withdrawal, but like, really, once you've sent the tether 0:13:50.559 --> 0:13:55.080 over to zbxss, it's gone. So at this point I 0:13:55.160 --> 0:13:58.720 feel like I've gotten her tether address, and I feel 0:13:58.720 --> 0:14:01.320 like I've let this go on long enough, and I'm 0:14:01.320 --> 0:14:03.240 like Vicky, I have to tell you, Like I'm an 0:14:03.240 --> 0:14:06.280 investigative reporter. I've been looking into these kinds of crypto 0:14:06.320 --> 0:14:08.760 scams and how they use teather, and I've heard some 0:14:08.880 --> 0:14:11.080 like disturbing things about what might be going on, which 0:14:11.080 --> 0:14:13.839 I'll get into. Can we talk about can we get 0:14:13.840 --> 0:14:16.400 real here? And then Vicky just said oh no, no, no, no, 0:14:16.880 --> 0:14:18.839 it's not what you think, and she disappeared. 0:14:20.200 --> 0:14:20.840 I'm shocked. 0:14:21.360 --> 0:14:23.840 Yeah, So this is the real crazy part, which is 0:14:23.840 --> 0:14:29.120 that I learned from reports out of Cambodia that a 0:14:29.160 --> 0:14:31.360 lot of the people who run these kinds of scams 0:14:31.440 --> 0:14:35.520 are themselves victims. And it sounds like some sort of 0:14:35.680 --> 0:14:40.000 Quanon conspiracy theory, but they're victims of human trafficking. And 0:14:40.040 --> 0:14:45.840 there's actually these whole office towers, floor after floor of 0:14:45.920 --> 0:14:49.360 people who've been let's say they've been lured from say 0:14:49.400 --> 0:14:51.720 like Vietnam, with the offer of like a good job 0:14:51.760 --> 0:14:55.360 and like customer service. Then when they get there, they're trapped. 0:14:56.000 --> 0:14:59.920 They're told they can't leave, they're beaten, they get electric shocks, 0:15:00.080 --> 0:15:02.640 other forms of torture, and they're just made They're given 0:15:02.720 --> 0:15:05.360 like ten phones each and made to like try to 0:15:05.440 --> 0:15:09.360 lure people into scams from around the world. So I 0:15:09.400 --> 0:15:12.400 suspected that Vicky was like one of these people, and 0:15:12.440 --> 0:15:16.040 I wanted to, Like I was hoping she would tell 0:15:16.080 --> 0:15:18.600 me more about like her working conditions, or that even 0:15:18.680 --> 0:15:21.720 I might be able to, like somehow help her. 0:15:22.000 --> 0:15:23.640 But no Dice. 0:15:23.720 --> 0:15:26.320 So I start to go down this rabbit hole of 0:15:26.360 --> 0:15:29.600 these other people who've looked into this, and there's actually 0:15:29.680 --> 0:15:34.560 this crazy organization of people who've been scammed who, instead 0:15:34.600 --> 0:15:37.040 of trying to get revenge, have made it their mission 0:15:37.440 --> 0:15:42.160 to help these human trafficked scammers. Through them, I meet 0:15:42.200 --> 0:15:44.160 a lot of experts are working on this. One guy 0:15:44.560 --> 0:15:48.240 tells me that a crypto tracing expert, he estimates that 0:15:48.240 --> 0:15:51.600 this accounts for like that ten billion dollars has been 0:15:52.520 --> 0:15:56.840 lost this way and all using tether. From these guys, 0:15:56.880 --> 0:16:00.440 I get connected with a YouTuber in Vietnam who's his 0:16:00.480 --> 0:16:03.800 thing that he pays ransoms to help people get out 0:16:03.800 --> 0:16:06.400 of these scam compounds. He connects me with some of 0:16:06.400 --> 0:16:11.120 the victims who he's helped rescue, and I start talking 0:16:11.160 --> 0:16:14.640 with them with a translator about their experiences. And I 0:16:14.680 --> 0:16:18.080 meet this one guy, Twee, who had just gotten out 0:16:18.120 --> 0:16:21.240 of one of the most famous compounds in Cambodia. He 0:16:21.360 --> 0:16:24.920 tells me about just like horrific things like this. He's 0:16:24.920 --> 0:16:27.240 in this compound that holds some people, say like five 0:16:27.320 --> 0:16:28.480 or six thousand people. 0:16:28.680 --> 0:16:30.960 Wow. And it's all in Cambodia. 0:16:31.080 --> 0:16:36.240 Yes, and Seannookville in southwestern Cambodia, and it's it's called Chinatown. 0:16:37.680 --> 0:16:41.800 It's run by like Chinese gangsters. So I've made arrangements 0:16:41.800 --> 0:16:45.400 with two reporters in Cambodia who had really been instrumental 0:16:45.400 --> 0:16:48.240 in exposing this problem and bringing it to light, and 0:16:48.840 --> 0:16:51.680 went over to out there to meet some of these 0:16:51.760 --> 0:16:54.560 victims and to see some of these compounds myself. 0:16:55.240 --> 0:16:57.160 Yeah, you know, and this is a scam that sounds 0:16:57.280 --> 0:17:00.760 like it's really would only be made possible because of 0:17:00.800 --> 0:17:03.600 crypto and because of the sort of you know, no 0:17:03.720 --> 0:17:06.680 border transactions that are allowed with crypto. 0:17:06.960 --> 0:17:10.080 That's really what made me think it was so interesting, 0:17:10.200 --> 0:17:14.000 because I yeah, like there've always been these kinds of scams, 0:17:14.400 --> 0:17:17.560 but there haven't been such a first of all, I mean, 0:17:17.560 --> 0:17:20.479 the Crypto's story makes it very plausible that or at 0:17:20.560 --> 0:17:23.199 least mildly plausible, that someone like Vicky might have some 0:17:23.240 --> 0:17:24.359 secret trading secret. 0:17:24.400 --> 0:17:26.920 I mean, in the crypto world, like people are getting ridy. 0:17:27.080 --> 0:17:31.800 Everyone's suffering from fomo. Like you said, you know, everyone's thinking, 0:17:32.280 --> 0:17:34.040 you know, should I be in? Should I be in 0:17:34.080 --> 0:17:37.000 this asset class? Everyone else's seems to be making money. 0:17:37.040 --> 0:17:39.479 It's it's perfect timing for a scam like that. 0:17:39.520 --> 0:17:41.240 I feel weird just even thinking about it, but I'm 0:17:41.240 --> 0:17:43.720 getting what I would get to Cambodia with these reporters, 0:17:44.160 --> 0:17:47.800 mech Doron, Danielle Keaton Olsen, who had brought this Chinatown 0:17:47.800 --> 0:17:51.920 problem to light. Right at the entrance to Chinatown, there 0:17:52.000 --> 0:17:56.000 was a cash exchange store and I could still see 0:17:56.040 --> 0:17:59.520 their like faded sign where they offered to trade tether 0:18:00.080 --> 0:18:04.040 for cash. And like I'd spent like years looking ato crypto, 0:18:04.119 --> 0:18:06.119 I'm not seeing any place where it's actually used in 0:18:06.160 --> 0:18:08.960 the real world. But then, like in panom Pen, I 0:18:09.000 --> 0:18:13.360 went to a currency exchange place to advertise teather. Outside 0:18:13.359 --> 0:18:17.080 I saw a bunch of these and I, you know, 0:18:17.119 --> 0:18:19.600 I had some tether on my phone, zapped it over 0:18:19.680 --> 0:18:22.520 to this Chinese guy working behind the counter. He gave 0:18:22.560 --> 0:18:25.920 me US dollars, no questions asked, and finally I'm like, oh, 0:18:26.040 --> 0:18:27.640 like this is what crypto is good for. 0:18:28.000 --> 0:18:30.159 That's another part of the book that I wanted to 0:18:30.200 --> 0:18:32.440 ask you about. Where you go to this money exchange 0:18:32.440 --> 0:18:35.960 and this man comes in with flip flops and pajama pants. 0:18:36.440 --> 0:18:41.040 He has this big plastic bundle of one hundred dollars bills. Ye. 0:18:41.200 --> 0:18:45.760 So this currency exchange was in the capital in Panompen 0:18:45.840 --> 0:18:49.800 and the capital of Cambodia, in a sort of Chinese neighborhood. 0:18:50.240 --> 0:18:56.040 So the boss was Chinese. This other Chinese guy walks 0:18:56.080 --> 0:19:00.280 in kind of like hungover and just walks out with Yeah, 0:19:00.320 --> 0:19:04.000 this brick of hundreds that a clerk told me later 0:19:04.160 --> 0:19:07.800 was fifty grand. This is the Teather exchange. And I 0:19:08.160 --> 0:19:11.119 since I sent some tether to the exchange place, I 0:19:11.160 --> 0:19:13.280 got their wallet address and was able to see that 0:19:13.320 --> 0:19:16.040 they were making big transfers every day. And this is 0:19:16.119 --> 0:19:20.320 just one of many exchange places. And I visited another 0:19:20.880 --> 0:19:24.080 town that was reportedly home to a lot of these 0:19:24.119 --> 0:19:28.480 scam compounds with forced labor. It was the first place 0:19:28.480 --> 0:19:30.800 I saw in Cambodia. I crossed the border, I got 0:19:30.800 --> 0:19:33.600 off the bus. I'm at this town that's full of 0:19:33.640 --> 0:19:36.919 like scam compounds where I've seen videos of like workers 0:19:37.119 --> 0:19:41.520 getting beaten and right in the parking lot of one 0:19:41.560 --> 0:19:45.000 of these casinos. I see a little booth that's advertising 0:19:45.840 --> 0:19:48.360 trade your dollars for tether, Trade your tether for dollars, 0:19:48.720 --> 0:19:50.119 And I was just like, I don't know, it's not 0:19:50.200 --> 0:19:51.720 evidence of anything, but I'm. 0:19:51.560 --> 0:19:55.520 Like, so, you know, I think throughout the crypto boom, 0:19:55.800 --> 0:19:59.760 many people were where released suspicious that yeah, it's frequently 0:19:59.800 --> 0:20:03.080 you crypto is frequently used to facilitate scams like this 0:20:03.240 --> 0:20:06.960 or make sort of this new version of these scams possible. 0:20:07.000 --> 0:20:10.119 But what caught a lot of people by surprise, I 0:20:10.119 --> 0:20:12.919 think fil Donna and I included, and then many in 0:20:12.920 --> 0:20:16.840 the press, is that some of the players who were considered, 0:20:17.720 --> 0:20:21.320 you know, the righteous leaders of this movement were scam 0:20:21.400 --> 0:20:25.000 artists too, allegedly. And obviously the name that comes to 0:20:25.040 --> 0:20:28.560 mind is Sam Bankman Freed. He really seemed to have 0:20:28.840 --> 0:20:32.520 the world convinced that he was just sort of this 0:20:32.640 --> 0:20:37.240 honest programmer who's building the infrastructure for crypto and you 0:20:37.280 --> 0:20:41.000 can trust him. He testified before Congress. You met Sam 0:20:41.240 --> 0:20:45.720 a few times in the Bahamas, and I think one 0:20:45.760 --> 0:20:48.560 time in Miami too. It just talked to us about 0:20:48.880 --> 0:20:53.320 meeting him, your first impressions and just kind of your 0:20:53.359 --> 0:20:55.160