The secret behind most conspiracy-driven movements is that there is often a glimmer of truth at the centre of their beliefs. Anti-vaxxers, for instance, can point to the past behaviour of large pharmaceutical companies as evidence that the medical establishment can’t be trusted. This glimmer is what’s used to ensnare you, says Ben McKenzie, the actor and cryptocurrency critic.
“If there’s one thing that the crypto [community] does, somewhat correctly: it has pointed out that our current system is deeply flawed,” he told me from New York over Zoom. It’s no coincidence that the rise of cryptocurrencies happened in the wake of the 2008 financial crisis. “Almost everyone agrees that our current financial and economic system, well, sucks. And so crypto says: we can fix all of that. Yeah, we can fix it – and you’ll become rich.”
The problem, as McKenzie notes in his co-written new book Easy Money: Cryptocurrency, Casino Capitalism and the Golden Age of Fraud, is that “crypto was effectively the biggest Ponzi of all time”.
Though he has gained a reputation as an anti-crypto activist in the past couple of years, McKenzie is better known as the former Hollywood heart-throb star of the early 2000s drama The OC. McKenzie shot to fame as the show’s protagonist, a troubled, working-class teen who was taken in by a wealthy family in the opulent Orange County community of California. The show was enormously popular and inspired a number of reality-TV franchises – Laguna Beach and The Hills – that were cultural phenomena in their own right.
Since the series ended in 2007, McKenzie has continued to act, mostly playing cops in crime dramas, including FX’s Gotham. During the pandemic, as filming ground to a halt, he became intrigued by crypto. After a friend urged him to buy Bitcoin, McKenzie – a former economics student with a degree from the University of Virginia – took a 24-part online course on cryptocurrencies, taught by the current US Securities and Exchange Commission chair Gary Gensler. He came away thinking the entire cryptocurrency thing was a scam. Worse, it was a scam with a lot of momentum behind it. “Advocates will tell you there is no ‘Bitcoin marketing department’,” McKenzie said. “But of course, if Bitcoin and crypto doesn’t have a product, if there is no actual tangible asset behind it, then in fact, Bitcoin and crypto is only marketing. It’s only a story.”
McKenzie wanted to tell a different story, so he decided to write a book. He teamed up with the journalist Jacob Silverman, his Easy Money co-author, and together they interviewed crypto traders and exchange founders (including FTX’s Sam Bankman-Fried), proselytisers, whistleblowers and government agents. The duo also started writing articles for US publications, criticising the then-booming industry.
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One of their early focuses was on calling out the so-called Hollywoodisation of crypto. During the peak of 2021, some of the most recognisable people in the world – including Matt Damon, Reese Witherspoon and Kim Kardashian – began promoting cryptocurrencies and non-fungible tokens (NFTs).
McKenzie told me this is part of a more aggressive “hustle culture” in which people use their social contacts to promote products. Multi-level marketing (or MLM) and pyramid-selling schemes have existed for at least a century, but they have been transformed by technology. “In the 1950s, if you wanted to sell someone Mary Kay Cosmetics or Tupperware, you would need to invite them over to your house, cook them dinner, spend three hours trying to convince them [to buy products].” Now, he said, “the MLM can be done through TikTok and Instagram.”
Though McKenzie is openly critical of the celebrities who have pushed these products, he reserves ultimate blame for the sluggish regulators that allowed it to happen. “I think in many cases the celebrities didn’t really understand what they were selling. Which is not to absolve them of a moral, ethical [or] potentially even legal responsibility for their actions. But they don’t need to be bad people – they just see easy money, right?”
Easy Money positions itself a bit like The Big Short (2010) – the bestselling book turned Hollywood film that exposed the reckless idiocy that caused the 2008 subprime mortgage crisis — but for crypto. (the author of The Big Short, Michael Lewis, releases his own book on Bankman-Fried in October.) The book is told in the first person, from McKenzie’s perspective, and is punctuated with self-deprecating asides – he refers to himself early on as an “econ dork” and “mid-level celebrity” – reassuring the reader that he, too, realises how odd it is to be taking financial advice, of any kind, from an actor. When recounting his first forays into publicly criticising cryptocurrencies, he writes, charmingly, that “it was time to announce exactly what people don’t want to hear from famous people: I have thoughts about things other than showbiz.”
Yet a notable detail about crypto is that it wasn’t just Hollywood stars helping to fuel the bubble; those running these operations – the Celsius founder Alex Mashinsky, the Terra founder Do Kwon, the “boy wonder” Bankman-Fried – became celebrities in their own right. Bankman-Fried in particular enjoyed a special kind of status, held up by credulous media as the future of finance, gracing the covers of magazines and spending time with Bill Clinton. In the book, McKenzie and Silverman sit down with Bankman-Fried; he gives mostly roundabout answers to their toughest questions and plays with a fidget spinner. Months after the interview, Bankman-Fried’s $32bn crypto exchange collapsed and he was indicted on criminal charges.
Thanks to the downfall of Bankman-Fried and the plunge in crypto’s value in 2022, a lot of the momentum has gone out of the crypto story. “The good news is that once bitten, twice shy – most people [who have invested before] are not going back in now,” McKenzie said. “But it doesn’t absolve regulators… because this can reinflate.”
I noted that a lot of the energy around crypto seems to have found a new target: AI. McKenzie recounted asking ChatGPT to explain how cryptocurrencies are a Ponzi scheme. “It did not like that question,” he said, laughing. “It denied the premise of the question.” But he agreed that the shift in boosterism from crypto to AI is significant. He points to Sam Altman, the CEO of OpenAI, and his project Worldcoin, which marries AI and crypto while also collecting users’ biometric data via eye-scanning orbs. Regulators in several countries have begun investigating the project’s legality; Kenya has suspended Worldcoin from operating in the country outright.
Again, there’s reason to be sceptical of the hype. “A lot of this is just tech utopianism,” McKenzie said. But if the crypto example is any indication, the path to utopia could be littered with plenty of losers – and very few of them will be the celebrities in Hollywood and Silicon Valley.