'Crypto is a funhouse mirror of bullshit’: actor and campaigner Ben McKenzie on a get-rich-quick illusion

Ben McKenzie is known to a certain generation for his time spent as a TV actor, most famously playing Ryan Atwood, the bad boy with the heart of gold, in noughties California high school series The OC. 

But he also has a side hustle: for the past four years he has been one of the crypto industry’s most persistent critics. In December 2022, a month after Sam Bankman-Fried’s digital asset exchange FTX disintegrated, McKenzie gave evidence to the US Senate banking committee, telling senators that crypto was “the largest Ponzi scheme in history”. His book Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud, written with journalist Jacob Silverman, was published in 2023 and was a New York Times bestseller. His subsequent documentary, Everyone Is Lying to You for Money, follows him through 2022 as two of the industry’s biggest names, FTX and the crypto bank Celsius, fall apart.

Since then the industry he cautioned senators about has become a political player in Washington. Fairshake, the Super Pac funded by Coinbase, Ripple and Silicon Valley venture capital giant Andreessen Horowitz had spent around $151m by mid-October on this year’s US midterm elections, according to Reuters analysis. Changpeng Zhao, the co-founder and CEO of Binance, pleaded guilty in 2023 to failing to maintain an effective anti-money-laundering programme and served four months in prison. In October last year Donald Trump pardoned him.

Last week, Binance once again made headlines, when it lost about $6.3bn “in a blink” to hackers in what appears to be the largest crypto theft on record. The FBI holds North Korea responsible and Binance says it will be refunding all its customer’s losses. 

The Nerve’s Lucia Osborne-Crowley spoke to McKenzie before the hack. 

My trip down the rabbit hole of cryptocurrency started in the spring of 2020. We were coming out of the pandemic and I was bored. I have a degree in economics and a friend suggested I buy crypto. I had never paid attention to it. My friend has given me terrible financial advice, so I said “I'm not gonna do that, Dave,” but I was curious. I set out with a journalist to document everything that was going on in crypto, and I turned a camera on in the process. That led to a book and then to this film. 

It’s a 90-minute comedy about how stupid crypto is, but also how dangerous it is. If there's one thing that we've learned in the era of Donald Trump, it's that something can be both incredibly stupid and extremely dangerous at the same time. 

A few months after I interviewed them, the company halted withdrawals and then promptly went bankrupt. Pretty soon after that they were charged with running a fraud. The CEO, Alex Mashinsky, is now in prison. He pleaded guilty to defrauding his customers.

Celsius was pretending to be a crypto bank. You give your crypto to them and they give you this magical return by investing your crypto in ways they couldn't quite explain, and they would give you something like 15% interest. That's literally a red flag for a Ponzi scheme. You cannot guarantee above-market return, particularly one as high as 15%. That's simply impossible. 

That is the key. Once you've gotten the real money on to your platform, whether it's a crypto exchange or crypto “bank”  like Celsius, you now have much more ability to manipulate things. It's much easier to run a fraud online than it is in real life. It’s hard to take real people and real buildings. A fancy website's quite easy. Slickly produced videos are quite easy. 

So the story of crypto is really a marketing exercise. How many people can we get to believe that they're going to be fabulously wealthy with this thing that they don't quite understand? Give them flashy examples of people that have made money and show off the fabulous lifestyle that they could have, to obscure the fact that most people are going to lose and some people are going to lose everything. The people that benefit in crypto are the people that are on the inside, the Alex Mashinskys, the Sam Bankman-Frieds, the people issuing the coins and running the exchanges. 

Crypto claims to be decentralised and democratised, and it's going to make everybody rich. In fact, it makes most people poorer and really only benefits a handful of insiders. Currencies that aren't currencies, stablecoins that aren't stable, decentralised things that are centralised. It's a funhouse mirror of financial bullshit.

It's a time-honoured conman tactic to basically find another object that you and your mark can agree you don't like. Look at that guy over there, he's awful. In the meanwhile, his hand is dipping into your pocket to steal your wallet. 

The crypto guys are exploiting an understandable mistrust of our regulated system. A lot of people feel left out from the regulated system. It is hard to get ahead. The crypto story is basically two parts: the regulated system sucks, and bitcoin fixes this. The first part is true, the second part is the scam. 

The only people that responded to our Reddit post were guys, of different ages, different financial backgrounds, different levels of financial literacy. One worked in finance, and when he lost the money, he was really more embarrassed that he'd been conned. 

The one that sticks with me is Joe from Fort Worth in Texas, near where I grew up. I think he worked construction and he was trying to save a little money so he could spend more time with his daughter. I mean, who can't relate to that?

When I go back at the end and I ask them “Do you still believe in crypto?”, they all said yes. That’s the neatest trick of crypto, in a dark way. The anger that should be directed at the people who scammed them gets turned back on themselves. They shouldn’t have put it on Celsius, but bitcoin is still an incredible thing. You’re getting into cult-like dynamics.

It was one of the strangest hours of my life. He's a very strange guy. He had done a lot of press and so I'd watched a lot of his interviews and my goal was to get beyond the talking points that he'd endlessly iterated online. Sam presented as this very MIT-educated son of professors of law at Stanford. He was calling himself an “effective altruist” who was gonna make all of this money and then give it away.  

But nothing added up. He starts his crypto business in Hong Kong, where he meets this guy named Changpeng Zhao, CEO of Binance, the largest crypto exchange, who was an original investor in FTX. Then he moves the company to the Bahamas, a place not known for its strict financial regulation, and he banked at the same bank that Tether banked at. There were a lot of troubling signs. The most obvious is that he was running a trading firm and an exchange, which would never be allowed in a regulated market, an obvious conflict of interest.

My presumption was that he was making money hand over fist. In fact he was losing it hand over fist, and that's why he had to steal from his customers. I felt vindicated but also empty. This was a twentysomething supposedly running this multi-trillion dollar industry and he can't answer any questions. That’s terrifying.

Tether is key to the whole operation, in my estimation. It is the lion's share of the stablecoin market. And stablecoins are used for criminal activity on a global scale. Tether is an instrument for that criminal activity. If, collectively, we can drill down into what's happening at Tether, it will reveal how this system actually works. 

I'm not accusing any one individual. But if a company’s financial product is being used for crime all of the time, then that company should bear some responsibility. Banks encounter this all the time and – according to them, unbeknownst to them – they have facilitated money laundering. They pay fines, and sometimes people go to jail. 

My fix for this is relatively simple. Regulate all of the cryptocurrencies whose price can go up and down – you know, Bitcoin, Ethereum, Fartcoin, Trumpcoin, all of them, like securities. Then you would need to know who you're giving your money to and what they're doing with it.

Then the stablecoins. I think they are very dangerous. You're either a bank or you're not a bank. You either play by the banking laws, or you don't play. We should consider outlawing stablecoins, because if you're issuing something that says it's a dollar, but it's not actually issued by the US government, not backed by the full faith and credit, that sounds like you're issuing a counterfeit dollar to me. If you mix the fake money with the real money, the stablecoins with the rest of the banking system, you could get a banking crisis like the one we had in 2023. 

Everyone Is Lying to You for Money is available to watch here