- [Announcer] Funding for "Overheard with Evan Smith" is provided in part by HillCo Partners, a Texas government affairs consultancy; Claire and Carl Stuart; and by Christine and Philip Dial.

- I'm Evan Smith.

He's an actor, whose credits include the TV shows "Gotham" and "The OC," and the movies "Junebug" and "Line of Duty."

His first book, "Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud" has just been published.

He's Ben McKenzie.

This is "Overheard."

(gentle rhythmic music) A platform and a voice is a powerful thing.

You really turned the conversation around about what leadership should be about.

Are we blowing this?

Are we doing the thing we shouldn't be doing by giving into the attention junkie?

As an industry, we have an obligation to hold ourselves to the same standards that we hold everybody else.

Cue.

This is "Overheard."

(gentle rhythmic music ending) (audience applauding) Ben, thanks for bein' here.

- Yeah, my pleasure.

- It's good to see you.

Congratulations.

- Thank you.

- This has finally been loosed on the world.

- [Ben McKenzie] That's right.

- You were workin' on it for a long time.

- Two years.

- [Evan And Ben] Yeah.

- The story of this book, I have to say, ties back to your career as an actor because it was during a period of time when, because of COVID, you were not necessarily working as much- - Yes.

- You were not making things that you make- - Mm-hmm.

- That you decided to turn your attention away from that and toward this, tell that story.

- Well, it was COVID, it was 2020 / early 2021.

Showbiz was on ice, there was nothin' to do, and I'm a storyteller without a story to tell.

And, you know, I make my living pretending to be other people.

All of a sudden, I needed to be myself, and that can be somewhat terrifying actually.

So I had a lotta time on my hands and I saw the markets going nuts.

Obviously, the markets went way down as COVID hit, and then went way back up as the easy money was unleashed.

And things like meme stocks, and NFTs, and cryptocurrency were out there.

And I just couldn't figure it out.

- Yup.

- So I decided to brush off my degree, which is in economics.

- Yeah, you know a little bit about this stuff.

- A little bit.

I went to UVA, University of Virginia, I have a degree in economics, 20 years old though.

And I was smart enough to know that the last thing you wanted to do in Los Angeles was tell people about the dismal science, that is not something that they wanna hear about.

So I sorta kept that close to the vest.

But I was familiarizing myself with sort of what was going on 'cause I couldn't make sense of it, and I realized we were in a bubble.

At the same time, a friend of mine came to me and said, "You gotta buy Bitcoin."

And I love my friend Dave, but he had given me terrible financial advice when I was in my 20s, encouraged me to invest in a company that had supposedly produced synthetic blood.

And they were gonna make a fortune, we just needed to invest right now.

- And of course, you did.

- And of course I did, and of course I lost money.

And as did he, he was not scamming me.

But when Dave came back to me in 2021 and said I should buy Bitcoin- - Got your guard up.

- Yeah, it sparked curiosity.

- Yup.

- 'Cause I couldn't understand it.

It actually started with language.

You know, I'm a storyteller, words are our tools and they can be used for a variety of purposes: to educate, to entertain, but also to deceive- - Yup.

- And potentially, to defraud.

And so it was actually the word "currency" that is the thing that I bumped on first.

Because of course, anyone, even without an economics degree, knows one of the things that money does is you can buy stuff with it.

- Mm-hmm.

(Ben laughing) - And crypto, you actually can't buy things with.

You can trade it, hoping to make more of it, hoping the price goes up, and then you can sell it, and then you can cash out into real money.

But that's different, that's an investment.

It started with the word "currency," and then it just continued from there.

So after a few months of looking at crypto, I came to what seemed to be sort of a terrifying conclusion that at best, this was a speculative bubble built off of very little sort of value foundationally.

And at worst, it was a bubble predicated on fraud, which would mean it would be the biggest Ponzi scheme in history.

You know, at this point- - I mean, as you say in this book, "It would put Madoff to shame."

- Three trillion dollars is what this stuff is supposedly worth.

- Right.

- And yet, from my vantage point, as someone who...

The book's about crypto, but it's really about money and lying.

I know about money 'cause of econ.

I know about lying, I'm an actor, I do it for a living.

- Right, you make the point, "I do know lying, I know I've been in Hollywood for a while"- - Yeah, and they're always lying to you.

- "That's what we do," right.

- I get it, I get that.

- Yes.

- But, you know, this was a lie being perpetrated on the American public to a degree that I don't think we'd ever seen before.

40 to 50 million Americans bought this stuff.

- Say something...

I wanna come back around to some things you said, but say something about the intentionality of this.

If we could wind this back to the beginning, as you posit this as a scam, the people responsible for us being aware of this thing and then encouraging us to participate in this thing.

And you make the point very early on in this book, only only 16% of Americans indulged in cryptocurrency.

- Correct.

- 84% of Americans never did.

- Yes.

- So the people who were susceptible and bought into this, was there an intentionality to the scam at the beginning?

Did they have a plan, was there a story boarding out of how this would go?

- We don't know, but unlikely.

- [Evan Smith] What do you suspect?

- Well, so we don't know who started this whole thing.

Satoshi Nakamoto is a pseudonym.

Someone published a paper in October of 2008, so right at the height of the subprime crisis.

- [Evan Smith] Yup.

- Somebody published a paper saying, "We can create a peer-to-peer currency.

You can avoid all intermediaries," banks- - Banks.

- "And you can transact directly with someone else."

And the story of cryptocurrencies obviously got a lot of appeal, particularly at that moment in time, given the banks were even more unpopular than they usually are, the debacle that was the subprime crisis.

- So this was really a reaction in your mind to that.

- Well, that was the story, that was the story that was sold.

- [Evan Smith] Right.

- I go into the book, an alternate theory because at the same time, online "Poker" was in the crosshairs of the federal government.

And online "Poker," which had moved to the Caribbean, was about to be shut down, in what is known as Black Friday in online "Poker."

There's a lot of overlap between gambling and cryptocurrency.

At their core, they are zero-sum games economically.

Meaning it's like "Poker."

You and I sit at a table in Vegas, you win hand, I win a hand.

- Yup.

- We're not creating value, we're not putting capital to productive use.

Any money I win comes at your expense and vice versa.

- Right.

- And while we play the game, the house takes the rake.

So could you win in Vegas?

Sure.

But if you go to Vegas long enough, of course you're losing 'cause how else do they keep the lights on?

Crypto's the same thing, you may have noticed something as an investment.

They're pretty weird investments because what are they an investment in?

They're just lines of computer code stored on ledgers called blockchains, but they're not correlated with any real world asset.

So at best, it's a zero-sum game, and at worst it's fraud.

So I don't know what Satoshi Nakamoto's intention was, whoever he, or she, or they were.

But by the time I entered it, in 2021, it was snake oil.

It was being sold as the future of money, which is pretty funny 'cause it's actually the past of money.

It was being sold as a way to build generational wealth, when in fact it was going to destroy it.

It was billed as a way to bank the unbanked, which is also terrible 'cause of course the unbanked then got involved in a highly speculative "currency" that- - And dangerous, in some respects.

- And dangerous in many ways.

So all of the narratives to me, as I kept going into them, were not true.

And so I was debating whether to go public with this, these were my private thoughts.

I was reading my daughter "The Emperor's New Clothes."

My daughter was six at the time.

(laughing) And I remembered the story, but I'd forgotten a couple of key points.

The first is the tailor's trick is to say that only the smartest people, only the people of highest station can perceive the imaginary clothes that they weave.

So the genius of the con is just an appeal to ego and status worship.

Adult after adult is tricked into believing something that literally does not exist for the simplest reason of all, they don't wanna appear foolish.

And then the second thing is, at the end of the story, is the emperor gallivants through town naked and the adults pretend not to notice.

It's a child who calls out the lie.

- Yeah.

- The only one brave enough to speak truth is someone who doesn't know who's being brave, he's simply telling the truth.

Well, it was hard not to put myself as a child.

- The implications of that, in some ways, I kind of like this as a story, are that people were aware throughout all of this that the emperor had no clothes, but did not speak up.

- They were- - Is is part of the story of cryptocurrency, the fact that people knew that it was illegitimate, or a scam, or fraud, funny business, and didn't say anything about it?

- Yeah, absolutely.

And so, and the majority of the people who have ever bought cryptocurrency are not some diehard libertarian private money enthusiasts, they just saw the most famous people in the world telling them they should buy crypto.

- And so they followed.

- And so they followed, and they bought... And I don't blame them for that.

- Right.

- At the end of the day, you ask sort of what is crypto about?

It's a story as old as money, it's a get rich quick scheme.

- Yeah.

- But how it took off, why it resonated with so many people is I think a fascinating thing to study.

- And Ben, the way it mainstreamed.

- 100%.

- Right, I'm thinking about these television ads that were briefly on, featuring celebrities vouching for cryptocurrency.

- In the most vague terms possible, yeah.

- But the kinds of ads that you would see for a soda pop or for who knows what.

I mean, it was really...

I remembered seeing those ads and thinking to myself, "Boy, we've really gotten to a point here where this is just like every other thing that is commodified."

- I keep comin' back to language.

Because if cryptocurrency...

So cryptocurrencies are not currencies economically because they don't do what money does.

So I mentioned before, one of the things that everyone knows money does is you can buy and sell stuff with it, right?

- Right.

- But I can't go...

I live in Brooklyn.

I can't go to my neighborhood deli and buy a bagel with Bitcoin.

I've tried, they look at you like you're crazy.

- Right.

- It's not money.

The two other things you can do with money are store of value, its value stays relatively consistent over time, and unit of account, you can run your books with it.

Crypto can't do the other two things, store of value and unit of account because it's so volatile.

The price goes up and down like a rabbit on amphetamines, it doesn't work.

If these things are not currencies, what are they?

Well they're investments, right, people put real money into them expecting to make real money off of them through no work of their own.

Under American law, they ought to have been classified as securities, but they weren't.

The failure there in just the ability, I know it sounds academic, and kinda erudite, and kind of...

But it really is... What it is about is words and language, and what these things are.

If they are investments, if they are securities, they're unregistered, unlicensed securities.

- Right.

- And there's 20,000 of them.

Which is more, if you think of 'em like stocks, more unregulated licensed securities than exist in our regulated markets in the major indices, like the NYSC and Nasdaq.

- Yup.

- And they're being sold to the general public with no investor protections.

That's terrifying.

- So not everybody who was not workin' during COVID wrote a book.

George Clooney didn't write a book.

- (laughing) Well, he's got a tequila company, so.

- Yeah, but right, so I guess my question to you is why this, as opposed to any other way you could have spent your time?

- Because I couldn't get it outta my head.

- Right.

- I mean, I think that a lot of authors have a similar feeling.

I'd never written a book before.

I've written a couple episodes of television.

I- - And really it started out, let's be honest, it started out as a "column."

I mean, you were working on this, but you started writing a column for Slate, the online publication.

- Yes, but with the purpose of...

So basically, I read my daughter that story, I thought, (sighing) "I gotta do this," you know, "This is just ridiculous."

- [Evan Smith] Right.

- And I thought, "Look, either I'm crazy and I've lost my mind," which is a non-zero possibility.

- [Evan Smith] Possible, right.

- It's COVID, everyone got a little... Or it's the biggest Ponzi scheme in history, which is a pretty good story.

- Right.

- And I think I know how to tell this in a relatable way, given the money, and the lying, and the econ degree.

I think I can...

I love economists, but they're not the best communicators, and I think I can do it a little bit better.

And so... Well, I got high.

I mean, that's what happened is I had some marijuana and I thought I should write a book.

(audience laughing) Which, you know, it's happened to a lot of us, and- - The conversation took a turn, didn't it?

- Well, I just wanted to share that with your PBS audience.

- Thank you.

- I'm here- - 'Cause you know, the PBS audience is really into stuff like that.

(audience laughing) - Look, it's legal, and I'm here to de-stigmatize marijuana.

And so I thought I should write a book, but I realized I didn't know how to write one.

So, I reached out to... Well, there's a journalist who'd written a book... A book, excuse me, an article, "Even Donald Trump knows Bitcoin is a scam."

And I thought that was kinda funny, and it brought together a lotta things I've been thinkin' about.

Which is not just crypto, but also casino capitalism, turning everything into a casino, and the golden age of fraud, best personified perhaps by our ex-president.

And Jacob Silverman, the reporter, I followed him on Twitter, he followed me back.

I DMed him, I took him to drinks, and I said...

He lives in Brooklyn like I do.

And I said, "What if we wrote a book I don't know how to write about events that haven't happened yet?"

- Right.

- And he agreed.

And so that's how we started, and we started- - And in fact, this book is as much about crypto as it is about the act of writing the book and about your entry into this world.

- Right, it's a work of reportage.

We start in Brooklyn, it's still COVID so everything's on Zoom.

- You're showing us your work, like a kid in math class.

- Well yeah, I mean, part of the fun is this is a crazy idea.

I mean, it's hard for us to even appreciate even just two years ago, but two years ago we were being told this is gonna change everything.

- Right.

- And now it has almost literally just disappeared.

- Right, so how much of this is the disgrace of Sam Bankman-Fried and FTX, which again popped on the scene.

All of a sudden, like FTX was sponsoring everything, on everything.

- [Ben McKenzie] Yup, yup.

- He was a huge political donor.

- Yes.

- Like, there was a kind of, you couldn't get away from this guy or this thing.

- Mm-hmm.

- And then suddenly, they swoop in and he and everything he was associated with is now unmade, disgraced.

The people who took money from him have to give it back.

- Mm-hmm.

- Like how much of the rapid fall after the rapid rise you can tie back directly to the most visible emblem of this, which is SBF and that company?

- Well it unwinds the story, obviously, because he was the face of crypto and very purposefully made himself the face of crypto, right?

- Sure, it was to his advantage.

- 100%.

- Yeah.

- He was spending an enormous amount of time on Capitol Hill.

- Right.

- He allegedly donated $100,000,000 between him and these cutouts that he supposedly used, his other employees he's accused of running a straw donor scheme.

He was donating to the Democrats publicly, but- - The Republicans privately.

- Privately.

Playing both sides, as one would do if one wanted to get legislation through Congress, which is what he was doing.

And so there was a bill in the House ag committee, which regulates the overseas CFTC, the Commodities Future Trading Commission.

There was a bill that was affectionately known as Sam's Bill.

And that bill was working its way through committee, until he blew up.

I think the American people will be shocked to know how close we came to crypto getting further embedded in our banking system and our regulated financial system, which it had not done.

For all of crypto's hype, it had not done that.

If it had, the three banks that we saw collapse, you know, it could have been much worse.

All three have ties to crypto.

- Right, so back to this idea of 16% indulged and 84% did not indulge.

- Yeah.

- Is this book an I told you so, or is this book a warning as written?

Are you trying to tell those of us who might not have done this, as you just say, you walked up to the edge of a cliff, you didn't know it.

- Right.

- We're now back from the cliff, we gotta watch out for something like this to get us again.

Or, are you pointing at the people who did indulge saying, you know, you shouldn't have done this?

- No, no, no.

The majority of the people who have ever bought cryptocurrency bought in 2021, at the height of the mania.

- Right.

- Which is completely predictable and complete- - And you forgive them, they're innocent.

- 90 plus percent of the people who bought cryptocurrency have no ill intentions.

- Have no idea.

Yeah, right, right, yup.

- They have been sold a bill of goods by some of the most famous people on Earth.

- Right.

- And as a slightly less famous person, I can say this.

(laughing) This is, you know, LeBron James and- - Larry David.

- Larry David, and you know, Tom Brady.

And you know, and Matt Damon, and Reese Witherspoon, and all the... You know.

And they were being told it was gonna make the money, it was safe, it was new, it was the future, all this stuff.

So, I don't blame them at all.

Do I remind folks of some of the records of a few people?

Sure.

- You do.

- But not the buyers, not the retail public.

This is a warning.

This is a warning that if we don't address this, if crypto comes back, which it is entirely capable of doing- - For the next crypto.

- Right, exactly.

Which could exploit similar deficiencies in our regulatory structure.

I mean, crypto exploited... We're the only country in the world that separates our securities regulation from our commodities regulation the way that we do.

We have competing agencies competing over jurisdiction, we have committees in both the House and the Senate competing to oversee them, and also the representatives competing for donations to regulate those industries.

It is a terrible system in terms of incentives.

And economists look at incentives, the incentive structure's all off.

I believe we need to address that.

So this is a warning, not just about crypto of course, but also about this thing casino capitalism and fraud.

We have been very light on white collar crime in this country for quite a long time.

But it really got, I think, outta control during Trump.

And I think we discount that, I think on some level.

Because it's not so dramatic, you know, no one's shooting somebody else, there's no death.

- Right.

- It is a, in some ways, sometimes a subtle crime.

But what it does is it erodes trust in our system writ large and trust between each other, so that we end up sort of devolving into a zero sum-game ourselves, right?

I'm just trying to...

The only way I can make money is by- - Is if I lose.

- Yeah, exactly.

- So that's what this book is in part about as well.

- Yeah, yeah.

- I wanna spend the remaining time, five minutes or so that we have, talkin' about you.

- Great.

- And your family.

So you grew up in Austin, Texas.

- Yes.

- You went to University of Virginia, as you said, got a degree in economics.

You got into acting, why?

What was it, what was the catalyst for that?

- I would say the throughline in my life decisions is boredom.

It's mainly boredom.

- Boredom.

- Yeah, yeah, I was bored, I was at UVA.

It's a very Greek school, very frat heavy, it was really not my cup of tea.

And I needed somethin' to do, I wanted to meet girls, and I figured I'd audition for a play.

I got the play.

It was very cool.

It was "Romeo and Juliet," and a guy who had become my friend had come up with the idea... UVA is a very self-segregated campus, and he had the idea of the Capulets being played by white actors and the Montagues played by Black actors.

And I played the friar, I was not Romeo.

But it was a wonderful moment on campus.

All of a sudden... Or on the grounds, as they say at UBA.

Huge crowds, CBS national news came down and covered it.

And I thought, "This is cool.

We're tellin' a story and people wanna hear it, people are interested in it."

So that literally sort of wet my appetite.

I still got my degree in economics 'cause I was hedging.

But as soon as I graduated, I moved to New York right before 9/11, two weeks before 9/11.

But I was waitin' tables and I was tryin' to make it there.

- That's amazing.

And you end up on these television shows that become hits and you become a heartthrob.

- Yes, which is pretty amusing 'cause you know, all of a sudden I'm on the show "The OC," and pitched as this teenager from the wrong side of the tracks.

You know, I'm an economics and foreign affairs graduate of the University of Virginia, you know, I am not- - Well, you're on the wrong side of some tracks, I guess.

- (laughing) Exactly, exactly.

- I'm not sure which tracks.

I mean, and in a lotta ways, I kinda think, just to come back to the book for a second, that it puts you in an interesting position.

Because you're obviously a very serious person, you've demonstrated that in conversation.

You show up to talk about crypto, and people go, "Ooh, Ryan Atwood wrote a book."

- Sure, sure.

- Right?

- Yeah.

- They see you only through that lens.

It's hard to get people to take you seriously, I imagine, on something so profoundly serious when you've been that guy.

- It was initially, but that also worked to my advantage of course.

- I mean, like Potsie writes a book about foreign affairs.

- Yeah.

- You know, I mean, like that inevitably, it reduces to they thought they knew you as this and now you're presenting yourself as that.

- Yeah, but I think you're also givin' 'em a little too much credit.

A lotta that is disingenuous.

A lot of that is Twitter, X, whatever we're calling it, social media.

And these are pseudonymous accounts talkin' a bunch of trash.

All they post about is crypto.

- Right.

They have an interest in- - I mean, what do you think this is really about?

But I appreciated it because I love being underestimated, that's fantastic, that's a real advantage.

- Right.

- I got in a room with Sam Bankman-Fried, and I don't think he expected what he got.

- Right.

- Which is me asking him, "Explain this to me," and he couldn't.

Well, "Explain that to me," and he couldn't.

- He couldn't.

- And you know, it's in the book, but the title of that chapter is "The emperor is Butt-Ass Naked."

So, you know.

- Yeah.

(audience laughing) As you correctly say, being underestimated is always the way to go.

Like I say in politics, run like you're losing- - That's right, that's right.

- Right?

Always.

And so you think that actually, you've cleared the hurdle here or cleared the bar in terms of making an argument that people can get their minds around.

- I am perfectly comfortable letting history be the judge.

- What happens now to you?

Do you go back to your old life, do you go forward with this new life?

Do you find a hybrid space for yourself where you continue to act?

I mean, you've done television and film, you did a very good play that was award nominated, right?

- Right.

- But now you've also done this, you've gotten a lot of attention for the work you've done on this.

You've been kind of the Paul Revere of crypto.

(Ben laughing) And so what do you do next?

- I have no idea.

- Yeah.

- And I think that used to terrify me.

The actor's life is a journeyman's profession, where you're trying to get right gig after gig and there's no real- - Well, and let's say that we're talking right now at a moment when there's a strike on in Hollywood.

- Yeah.

- So it's not COVID, but it's a version of we've shut down for business, right?

- Mm-hmm.

It's been a... For those of us in the entertainment business, on the creative side, it's been a hard few years, you know, a hard few years.

And I had the privilege of having made my way significantly before everything shut down.

My heart really goes out to the folks who are starting now, the young people who are just, just gettin' going.

And you know, and this is- - Because this is not normal.

- It's not normal, but will it be the new normal?

I don't know.

Right?

- Yeah.

- And you add AI, you add sort of the changes in technology, and the sort of encroaching, um... Well, the ability to...

It's a mixture of sort of technology and capitalism, and the use of technology as a smokescreen for the powers of capitalism to deprive creatives of what I believe is their right.

- You know, that sounds like a book.

- (laughing) I'll have to work on that.

- No, I mean, seriously.

- No, I've thought about it, I've thought about it.

- Right?

- Yeah, absolutely.

- I mean, I was gonna say, if all else fails, just read your kid another book.

- That's right, exactly.

- And maybe an idea will come up.

- It's true, well- - But honestly, if you write that AI/Hollywood / disruption of that show... That's pretty good.

Hey, it's good to see you.

Congratulations on your success, keep it up.

- Thanks, man.

- Alright, Ben Mackenzie, thanks so much.

- Thank you.

- Alright, good.

Thank you.

(audience applauding) Fun.

We'd love to have you join us in the studio.

Visit our website, at austinpbs.org/overheard to find invitations to interviews, Q and A's with our audience and guests, and an archive of past episodes.

- The first film that I did after bein' on this big television series, after the first year was over, is "Junebug."

Which is this lovely character study of a North Carolina family.

And Amy Adams was nominated for an Academy Award, I played her husband in that.

It was a wonderful experience.

And Amy, the whole cast, just tremendous.

- [Announcer] Funding for "Overheard with Evan Smith" is provided in part by HillCo Partners, a Texas government affairs consultancy; Claire and Carl Stuart, and by Christine and Philip Dial.

(bright fluttering music)