Let’s begin with a unifying notion that went through all of our heads at one point: “Ben McKenzie, the guy from The O.C. and Gotham, wrote a book about crypto schemes?!” Yes, and he wrote the hell out of it, teaming with journalist Jacob Silverman to create the New York Times best-selling Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud. He’s also testified in front of Congress on the matter. Life is funny, actors can do more than cry on command.
Let’s jump back to the point, though, because it’s something I asked McKenzie about when we spoke recently: How do you combat the shock of “the actor?!” when trying to dive into the world of finance bros and crypto gold rushes that isn’t native to you? To McKenzie, it was an initial concern, but one Silverman quickly reframed for him by urging him to see his unique blend of notoriety and outsiderism as a tool. Through storytelling and humor, McKenzie could disseminate the twisty mysteries of crypto and disarm his critics (well, some of them). “Crypto guys are funny to me […] but their jokes aren’t very good, in my opinion. It felt like a battle I could win,” McKenzie told us. And indeed, storytelling and humor are at the heart of a book that’s centered around a topic that could easily lose you due to its density and inherent batshittery if it were in the hands of a stuffy economist (for what it’s worth, Ben McKenize, the actor, also has an economics degree). As is often the case, a little showmanship is needed to reach the cheap seats and hold our attention. And we need to pay attention when it comes to crypto, a market force that is post-bust but far from dead.
What does it want from us (he said, asking the question as though it were an entity in a John Carpenter movie)? In the following conversation, McKenzie lays it all out, including the batshittery. We’re discussing his initial crypto obsession, how some words lose all meaning in the crypto-sphere, what’s to blame for crypto’s existence, bad faith actors, the need to reimagine crypto as gambling over investment, losing the equivalent cost of a house betting crypto would bust before it did, and whether he thought he might face a backlash for calling out the myriad celebrity crypo endorsers, some of whom have found themselves in legal trouble over those ads.
You have to be obsessed with something to write a book on it. How does this become an obsession for you? Why does this become an obsession for you?
I could answer that question a million different ways. I was bored was the way it originally started. And my buddy encouraged me to buy crypto. And I love him, but he’d given me this terrible financial advice. So I was suspicious, but I still thought about it (buying crypto). The story was everywhere, and it seemed so easy, no pun intended. I guess there was a pun intended there.
The truth of the matter is it started with me going, “What is this? I don’t understand it.” It’s so complicated. The words don’t mean what they normally mean. Currencies aren’t currencies. Stablecoins aren’t stable. Decentralized means central. I was like, “This is so weird.” It just gave me bad vibes. Not that the people who were selling it necessarily didn’t believe in it. I mean, I got that they did, but that didn’t mean that they were right. And then, of course, there were a lot of people who were scammers and fraudsters.
So, once I started going down the rabbit hole, it just became, “This is insane. This is all insane. This is based on nothing.” And I couldn’t even articulate for a while how hollow it was. And then I read Robert Shiller’s work, the economist who I cite in the book, who talks about how economic narratives form and how these stories form. Because at the end of the day, crypto is just a story, or a collection of stories that form a narrative. And he writes about it really well. They’re a reaction to real events.
So, the subprime crisis and the debacle of that really created an understandable lack of trust in our financial institutions. I mean, they screwed over Americans royally. So, that made sense, right, that you would want something that could avoid using those institutions? The banks. And there’s always been a libertarian culture out there. But, that story started there. And then, by the time I got into it, it had morphed into, “Crypto could just solve anything. It’s going to bank the un-banked, and build generational wealth, and democratize our financial system, and make everyone rich at the same time!” And, I was like, “Come on. It can’t do all those things.” So I think I became obsessed with the story and telling it as a story, telling the story of what I did in my journey with Jacob, as a way of explaining the story of cryptocurrency to reveal what it really was.
You have this career that you’ve been nurturing for decades as an actor. In the book, in past published work, you’ve not been shy about calling out celebrity endorsers of crypto products. Did you have to have a hard talk with yourself about realizing that that could have some blowback for you at some point?
Yeah, I did. I was afraid of a number of things when I first started out. First of all, that I could be wrong, of course, and that would be extremely embarrassing. And potentially, I could be lighting my career on fire…it’s a small business. And, people know each other. But again, I felt compelled to do it. There’s this myth that Hollywood is this organized place. It’s pretty much chaos. It’s the William Goldman quote.
It takes one person to hold a grudge and make a few mentions of something, right?
Yeah, I guess so. But also, people will love it too, potentially. If you’re right, people would be like, “That’s cool. Maybe I’ll put him in a movie playing an economist for five seconds as like a ha ha.” I mean, none of this is personal. So, maybe I would never get to be in a movie with insert celebrity who shilled crypto. Matt Damon, or whoever. But, like, I hope not.
Your chances for Curb season 12 are probably smaller than the average actor.
Yeah, Larry David’s not going to have me on. But then again, I was never going to get on Curb Your Enthusiasm anyway. You know what I mean? So, it is what it is. At the end of the day, I felt like I could tell this story in a book, and I’m making a documentary as well — it’s a comedy. And, there’s an opportunity here too. It’ll be a different career than I anticipated. But nobody’s career, especially — and I’m including us as a similarish profession — in the creative professions, you never know what’s going to happen.
Oh yeah, I started writing about politics to sports to entertainment, now I work on the business side as well. Yeah, it’s adapt or die, really.
Exactly. You’ve just got to acknowledge that, and hopefully, even embrace it. My natural tendency, I always want to know what the worst-case scenario is and try and plan it out. It’s my way of controlling my OCD. But, you have to remind yourself that there’s tremendous upside that your brain is not even allowing you to really think that that’s a real thing. I’m like, “People might actually really want to buy this book, and it actually might be good, and be well reviewed, and all that stuff.” So I had to kind of remind myself of that. And then, I needed my wife, and my family, and my friends, and fellow skeptics. I needed to find my own community.
Big question. At this stage of things, what is the sort of larger lesson that people should take away from crypto’s rise, fall, and attempts to re-rise?
The lesson is that we actually need to trust each other more. We need to build the trust that underlies the functioning of our economic system and political system.
So, it’s not greater skepticism, it’s more trust?
Well, that’s a great pushback. I should clarify. We need to speak honestly. We have to be allowed to speak honestly. And we are allowed to speak honestly, but we have to be brave in speaking honestly.
This thing was such a peer pressure thing — so not going along with the trend.
Yeah, they’re bullies. I mean, let’s be honest. Obviously, not everybody in cryptocurrency (is a bully).
Not even bullying. They just have the ability to pied piper it to a certain extent.
Totally. Totally. And then, they use the most famous people on earth to help you sell that narrative, right? And where did they get that money from? From you. You put it on the exchange, the exchange took your money, and sold it to other people. But somebody needed to point that out. And I looked around looking for who was in charge, and I realized nobody was. And I was like, “Well, I guess my dumb-ass is going to have to do it.” So ultimately, it’s about speaking truthfully, but it’s about trust in this sense. What crypto wants to do, what it says it wants to do anyway, is to create a trustless money, right, where you don’t have to trust an institution or another person or entity. You just have to trust the code. Right? But of course, it’s nonsense because money is trust. So you can’t create trustless money. It’s like saying you want to create government-less government, or religion-less religion. The words you’re searching for are anarchy and cult.
Yeah.
What you really mean is trust the code, but code doesn’t fall from the sky, people write it. But let’s just go even deeper: to aspire to not trust one another, to have that be your goal is nihilistic ultimately, in my opinion. I mean, we have to trust each other. It’s this libertarian fantasy that we could live by ourselves but transact with anyone all over the world, and be free of any social rules that would bond us together. Yes, privacy is important. Yes, freedom is important, of course. But we have to try to speak honestly to each other and to build trust. Trust does not drop down from the heavens. Code does not fall from the sky. Trust is earned. You earn it by showing up, by doing the work.
Our regulated financial system has failed so many times that it’s given the story of crypto a lot of power. At the end of the day, the one thing crypto does is point out that our regulated system is fucked up, and we need to address some of these systemic issues. Right? I mean, the story of it banking the unbanked wouldn’t have gotten as much resonance if that wasn’t a real problem. The story of it building generational wealth wouldn’t exist if people weren’t really struggling and really wanted a way to build generational wealth. So, it’s really just addressing those issues.
There’s good advice that you mention in the book: if you don’t understand something, don’t invest in it. I never invested in crypto, I never understood it. But one thing I feel like I did understand was the pull for this because it’s the opportunity for easy money and everybody’s making a killing on it. And that’s the dream. So, the people that went for that, that lost money big, do they bear some responsibility because they saw easy money and didn’t pump the brakes?
Well, sure. But, the trick here is to what degree? Because the libertarians, the crypto advocates will famously say, “DYOR — Do your own research.” And they’ll say something like, “You’re responsible for your own financial decisions.” Which, everyone agrees with that. Who else would be? It’s your money. But, that doesn’t absolve the person you’re investing the money with of like, they can just do whatever they want! And so DYOR, to me, as I research fraud, is a way of cooling out the mark. It’s a way of basically redirecting somebody who’s potentially been scammed or frauded, and redirecting their anger towards themselves, which is pretty pernicious. So, they bear some responsibility, but of course, the system also bears responsibility for allowing it to happen, any functioning good system. The reason we have federal security laws is we didn’t in the 1920s, and people got defrauded, and the market crashed. I mean, there were other things going on, it was a general bubble. But, there was also a ton of market manipulation and fraud.
And so, we needed rules. And so, crypto avoiding all of these rules and saying, “This is going to free you.” This is of course the opposite. It’s going to expose you to far more risk than even exists on our regulated markets, which of course, any investment carries risk. It was just lying at the end of the day to me. You could call it rationalization, I guess. That’s another word for it. But, let’s just say as I went up the chain, because of course, crypto is highly hierarchical, despite it saying it’s decentralized and whatever, it’s highly centralized, hierarchical. As I went up the chain, the people that were telling me these stories, they were smart enough to know they weren’t true. I don’t believe that they didn’t, at least some of them. So, that’s lying. And we have to call it lying. You can call it rationalization, but you’re rationalizing because on some deeper level, you know that you’re lying. So, they bear some responsibility, and of course, the system does. And then, we need to enforce securities laws.
You should be allowed to gamble, I believe. I don’t think gambling should be illegal. But several people told me gambling addiction carries the highest suicide rate of any addiction, which is a very serious thing that is not discussed in part because of masculinity, because men are more susceptible to it, and we’re prideful, and we don’t like to admit that we lost money. That’s why I include that in the book, that I lost money initially. I wanted people to understand, it happens to me too. And by the way, I was right. I was just wrong on the timing, which is still wrong for investing.
You should be gambling on crypto, not investing in crypto, because there’s nothing to invest in. What are you investing in? If it’s a security and it’s a share of a stock, where’s the revenue stream? Where’s the product? Where’s the good? Where’s the service? Is it the link to the JPEG of the monkey on the blockchain? That’s your product? I’m going to say, probably not. We need to be honest about it. Regulators have been playing catch up, but thankfully, they’ve been exposing some of it. Once it’s properly regulated, and then advertised correctly… And I would put restrictions on it too.
You can find ‘Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud’ on Amazon and wherever you buy your books.
Credit: Source link
