Zeke Faux
Appearances
Planet Money
The secret world behind those scammy text messages
What I've learned is that there's like a hierarchy within the compound. And the lowest level workers who've been trafficked, they got 10 phones, each has like a different fake identity, and they're trolling the world, sending spam messages, sending messages on LinkedIn, on Instagram, on Tinder, whatever. And they've got like some sort of quota for how many calls they need to initiate.
Planet Money
The secret world behind those scammy text messages
Once you've got somebody hooked, that person gets passed off to like a manager. Ah.
Planet Money
The secret world behind those scammy text messages
Yeah, and it was actually Vicky1 hit me on... text message, once we chatted a bit, they moved me to WhatsApp.
Planet Money
The secret world behind those scammy text messages
And that's probably when a more skillful Vicky took over.
Planet Money
The secret world behind those scammy text messages
And then the person who sent me those voice memos saying that they were Vicky, presumably that's like some poor female victim whose job is like recording all the voice memos. I see. And then if you consistently don't meet your quota regularly, they would sell you to another compound. The only way to leave is if you pay a ransom of anywhere from $5,000 to $30,000.
Planet Money
The secret world behind those scammy text messages
And I realized that it was time to come clean. So I told her, I'm an investigative reporter, and I'm only talking to you because I wanted to figure out how this works. And I also said, I've heard bad things about the working conditions for people like you. And she wrote back and said, oh, oh, it's not what you think. Her WhatsApp picture disappeared, and I never heard from her again.
Planet Money
The secret world behind those scammy text messages
I found a blog from like a kind of confused tourist who went on like a very detailed drive around Chinatown.
Planet Money
The secret world behind those scammy text messages
In recent years, there was a huge casino development boom fueled by Chinese money. It's now got like 100 casinos. Another casino. Is that another casino? Yeah, it is. Casino. But Sihanoukville fell on hard times. Like, the skyline is completely unfinished. There's literally, like, thousands of unfinished buildings around Sihanoukville because this development boom just, like, stopped.
Planet Money
The secret world behind those scammy text messages
And the casinos, the ones that were built, had no customers coming in. Right. So a lot of these casinos turned to scamming.
Planet Money
The secret world behind those scammy text messages
On the ground floor, a lot of the buildings have restaurants, barbershops, bodegas, all with signage in Chinese because the intended customer is not Cambodian. But the stores are divided by metal bars in the middle because the workers might be going to the restaurant from inside the courtyard, and they don't want them going out to the street to escape.
Planet Money
The secret world behind those scammy text messages
Yeah. And there's a police station right at the entrance to Chinatown. And the reports are like the police don't do anything. A lot of the local news, they're interviewing the people who like stand on the street and sell cigarettes or the guy who runs the bodega or whatever. People who aren't involved, but who just live in the neighborhood.
Planet Money
The secret world behind those scammy text messages
And that one of these people said, if an ambulance doesn't come every week, it's a wonder. Yeah.
Planet Money
The secret world behind those scammy text messages
They'd been writing these exposés about Sihanoukville. And in Chinatown, there were just like 40 or 50 buildings where, according to what they were saying, thousands of people were trapped there and forced to run these scams.
Planet Money
The secret world behind those scammy text messages
Some of them might sort of know they're getting into scamming, but they don't realize that they will be stuck there or that they'll be abused.
Planet Money
The secret world behind those scammy text messages
Right. I mean, if someone told you, do you want to go work in customer service in Cambodia? Like we'll give you $200 a month. That would hold no appeal for you. Right. But yes, like there are a class of people who can't find any jobs, who are desperate for work. And when they see an ad on Facebook or something like that, they're like, I'll give it a try.
Planet Money
The secret world behind those scammy text messages
Just floor after floor of people who were forced to send scam messages around the clock. And if they didn't meet quotas, they'd be beaten or tortured, like shocked with electric batons or even killed. Like, I've heard from people that if they didn't make their quota, they had to line up and beat each other. And they'd be like, if you don't beat each other hard enough, like, we will beat you.
Planet Money
The secret world behind those scammy text messages
Just like the worst, the worst stories.
Planet Money
The secret world behind those scammy text messages
Chinatown is outside the city center. It's like maybe a 15-minute drive from town. And there's a big avenue that runs through the middle of it. And on the right is this like blue glass X-shaped unfinished casino. And on the left is two different groups of office towers. The first group, maybe a dozen buildings, could have held thousands of people.
Planet Money
The secret world behind those scammy text messages
These ones, as we get there, they're clearly empty. And the gates are open, and we're able to walk into the courtyard. But if you keep going, you get to a second group of buildings called that surround a hotel called the KB Hotel. People call it Kaibo because it's next to this KB or Kaibo Hotel. And it's another, like, 12 buildings that could have held a few thousand people.
Planet Money
The secret world behind those scammy text messages
This whole area is weird because it's clearly built to be like a fancy casino. But all of the office towers that held the trafficked workers were super run down and dirty and totally out of place. But at the center of it, there's this KB Hotel, which has this gold facade. It's like a pretty fancy looking hotel. Weirdly, though, like it actually appeared to be open to the public.
Planet Money
The secret world behind those scammy text messages
Yes. I decided, yeah, I wanted to see what was going on in this hotel. But I'm out of my depth. I don't speak Chinese. It's hard for me to know what anything means. Because I had gone in by myself. I didn't bring a translator or anything.
Planet Money
The secret world behind those scammy text messages
leaked text message from a russian money launderer who got arrested by the fbi so he's texting a customer and he's being like you should use tether it's convenient it's quick and i'm like okay this is how the criminals are talking about tether yes but i don't know any russian money launderers but i hear that among the criminals who use tether are these pig butchering scammers and
Planet Money
The secret world behind those scammy text messages
We saw no one anywhere. Like, the hotel's fully staffed, but, like, there are no guests. But also completely empty. Yes.
Planet Money
The secret world behind those scammy text messages
He showed me lots of different nice rooms, each of which had views of, like, the place where Dwee was held. People were being held against their will and beaten. Then in the lobby, there's, like, a grand marble staircase that leads upstairs. Yes. And when I walk up there, I see a massive restaurant like where you could host weddings. And there is like a small buffet set out.
Planet Money
The secret world behind those scammy text messages
The host seems pretty confused that I am there. And I might not be interpreting this right, but it seemed like they were so not used to having like a customer there that they didn't even really have any habit of like collecting payment. So he was just like, go ahead, eat at the buffet. And so there's only a few people in there. Everybody seems really at home.
Planet Money
The secret world behind those scammy text messages
Like there is a fridge with beer and you should just go take it.
Planet Money
The secret world behind those scammy text messages
Yes, like the workers are not allowed to leave. So my thinking was that these are like hires up who work at these compounds or connected to them somehow. And this is like their cafeteria. But again, I really have no idea what's going on. So one of the hostesses spoke English and so like came over to, you know, see if I needed anything. And I was like, what's with this place? Why is it so empty?
Planet Money
The secret world behind those scammy text messages
What's with these dirty buildings next door? And she said it only opened to the public a couple months ago, i.e. after the raids. And she said that before that... Only people who worked in the buildings had been allowed to come to the hotel. And I'm like, why is there all these armed guards? And she says, this is Chinatown, don't you know? And I'm like, no, I don't know.
Planet Money
The secret world behind those scammy text messages
And she's like, the people inside, they can't go outside.
Planet Money
The secret world behind those scammy text messages
And then I made like a horrible face, I think. And she tried to reassure me. And she's like, don't worry. The staff here, we have our freedom. And I was just like, oh, no. I just thought, like, this is horrible. And Daraa and our driver picked me up.
Planet Money
The secret world behind those scammy text messages
And we're driving out of Chinatown. And right by the police station on your way out of Chinatown, I see a closed currency exchange. And the signs have been taken down, but you can still sort of see the shadows of the letters that they had on the facade.
Planet Money
The secret world behind those scammy text messages
And it's USDT, and it's advertising that they'll trade Tether for cash.
Planet Money
The secret world behind those scammy text messages
Yes, but I will say in recent months, this has become like a bigger issue among government.
Planet Money
The secret world behind those scammy text messages
Now I do know one pig butchering scammer, Vicky Ho. Right. Will she ask me to use Tether?
Planet Money
The secret world behind those scammy text messages
Most of the victims, both of the trafficking and the financial victims, are Chinese.
Planet Money
The secret world behind those scammy text messages
Yes. The idea is that you need to fatten up the victim like a pig with fake romance or even with... Once you get them to invest in your scams, maybe even let them withdraw $1,000 or $5,000. But meanwhile, you, the scammer, are sizing up just how much money this person has, how much you can take them for. And once they send in...
Planet Money
The secret world behind those scammy text messages
The maximum you think you're going to get, which in some cases is millions of dollars, you cut off their head. You take it all. You disappear.
Planet Money
The secret world behind those scammy text messages
Okay. So I wrote to her, nice to meet you. My name is Zeke Fox. I live in Brooklyn. Vicky said, you have a very cool name. I'm 32 years old and a divorced woman. And she sent me a picture. She looked like a very attractive young woman with like a heavily face-tuned face. And I thought, all right, we're on the path to getting scammed.
Planet Money
The secret world behind those scammy text messages
But like every day I'd wake up and there'd be messages from Vicky. She'd say like, good morning. How did you sleep, my dear? And she did try to flirt a little bit. Nothing, like, dirty.
Planet Money
The secret world behind those scammy text messages
Now, she wasn't that good at this whole thing. Like, I had already said I was from Brooklyn. And then she said she lived in New York. Big mistake.
Planet Money
The secret world behind those scammy text messages
She's sending me these pictures, and I can see in the background, it's not New York.
Planet Money
The secret world behind those scammy text messages
she was not getting to any sort of scamming. And I would say, what are you up to? And she would list like a number of conspicuously expensive hobbies.
Planet Money
The secret world behind those scammy text messages
Well, she'd be like, today I'm going to go golfing and then drive my Ferrari. I think she said she owned a chain of nail salons, but that she also had income from trading. And I was like, okay, cool. I want to hear more about that.
Planet Money
The secret world behind those scammy text messages
Yeah. And then she said at one point she liked to analyze cryptocurrency market trends. So I'm like, oh, crypto. I'm sort of curious about that. Tell me more.
Planet Money
The secret world behind those scammy text messages
And so eventually she starts telling me about something she calls short-term node trading. Okay.
Planet Money
The secret world behind those scammy text messages
Yeah. She's sending me these price charts. And she's basically saying that she can predict fluctuations in the price of Bitcoin. And she starts in between the Golf and Ferraris. She'll be like, I see an opportunity in the Bitcoin market.
Planet Money
The secret world behind those scammy text messages
No, yeah, it's total nonsense. But it sounds kind of equally plausible as like all the other random jargon in the crypto world. Like EVM arbitrage. That's a real thing.
Planet Money
The secret world behind those scammy text messages
Short-term node trading. That's a big thing.
Planet Money
The secret world behind those scammy text messages
Yeah. And one morning, I get yet another text that says, Love, did you sleep well last night? And I'm like, I've got to get Vicky to scan me. What am I going to do? And so I'm like, Vicky... needs to know that I have money and that I have financial goals. She needs to know that, like, I'm ready to spend. So I sent her a picture of a goal-wing Tesla that I want.
Planet Money
The secret world behind those scammy text messages
And I was like, Vicky, I need money to buy this Tesla. And Vicky said... I see the price is $142,200. As long as you like this, money is nothing.
Planet Money
The secret world behind those scammy text messages
Yeah, so she told me that tomorrow we could do it. We could do the trading.
Planet Money
The secret world behind those scammy text messages
Once we get into it, she sends me a link to download an app that's called ZBXS. ZBXS.
Planet Money
The secret world behind those scammy text messages
Let me tell you, it was not easy to install ZBXS. You have to be pretty motivated. This is why she had to butter me up for a week. Oh. Because, like, these instructions to get this bootleg app on your phone are not simple.
Planet Money
The secret world behind those scammy text messages
Like, my mom, I don't think, would ever be able to install ZBXS.
Planet Money
The secret world behind those scammy text messages
No, but it was just like, you had to adjust something in the settings that seemed very clearly... Designed to protect you from things like this. Yes. It was clear it was a bad idea. And you open up the app, and it says it's a new and safe, stable trading market. And it's got a lot of, like... price symbols, and it looks kind of like a bad crypto trading app.
Planet Money
The secret world behind those scammy text messages
But one thing that was promising is that all the prices are quoted in terms of Tether. So first she tells me to download crypto.com. I say, yes, the exchange of my friend Matt Damon. Then I learned that crypto.com is illegal in New York and it won't work for me. So like Vicky probably should have researched that.
Planet Money
The secret world behind those scammy text messages
Yeah. Then she suggests I use one called Trust Wallet. And this is where the good message comes. I'm like, what should I buy in Trust Wallet? I've downloaded it. And she says, find USDT to buy. That's Tether. Yeah. Because USDT is not affected by any rise or fall in the currency market.
Planet Money
The secret world behind those scammy text messages
Yes, it's a stable coin. Each Tether is always supposed to be worth $1. Yes. Because I was sort of wondering... All the cryptos would probably be pretty good for Vicky's purposes. Yeah. Why Tether? This is why. It's part of the sales pitch that she's like, oh, it's always worth a dollar. Don't worry about it. So one of the funny things I always learned in investigating crypto is that
Planet Money
The secret world behind those scammy text messages
In theory, there's no fees, but there's always lots of fees.
Planet Money
The secret world behind those scammy text messages
And in order to buy Tether the way that Vicky suggested, I have to pay $105.86 for 93 Tethers. So I'm paying $12 in fees. Yes. I don't know why. Vicky says it doesn't matter. We're going to make so much money on the nodes.
Planet Money
The secret world behind those scammy text messages
I tell her I'm nervous, and she said it's okay. I was nervous when I first traded, too. You have to relax. It's not too complicated. Then she says, get ready. We have to be ready by 4.30. You have to make sure you have 500 tethers in ZBXS by then. And at this point, I might have been busy that day. Also, like my budget for losing money to Vicky Ho was more like $100.
Planet Money
The secret world behind those scammy text messages
So Vicky said to me, Hi, David. I'm Vicky Ho. Don't you remember me? And this is kind of weird because my name is Zeke.
Planet Money
The secret world behind those scammy text messages
I didn't really want to lose this 500. So I was sort of hesitating. And she starts calling me, asking me to send the 500 tethers.
Planet Money
The secret world behind those scammy text messages
I don't know why I did sort of stick to the truth in my communications with her, a lot of them. So I said I had to take my daughter to the doctor. She said, well, the child's body is important.
Planet Money
The secret world behind those scammy text messages
Yeah. She asked, has your daughter's health improved? She suggests that I maybe do some trades so I could get money to buy my daughter a gift.
Planet Money
The secret world behind those scammy text messages
These scammers are often not any more convincing than Vicky was with me.
Planet Money
The secret world behind those scammy text messages
But... One thing a lot of the people have in common is that they've hit some sort of desperate circumstance in their life. Like they have a terminal illness, or they've just lost a loved one, or it's the pandemic and they're unemployed and they've had to move in with their parents. And a lot of people, if you're at least middle-aged, have access to some amount of money.
Planet Money
The secret world behind those scammy text messages
You could max out your credit card even if you're broke.
Planet Money
The secret world behind those scammy text messages
Yeah. Although once you know what's really going on on the other end of the text messages, it becomes not fun at all. And I started to wonder if Vicky might be punished for her failure to scam me. And I just, I realized that it was time to come clean.
Planet Money
The secret world behind those scammy text messages
I wanted to get scammed. So I was like, I want to see how this scam works. So I wanted to give her what she was looking for.
Planet Money
The secret world behind those scammy text messages
Ice Toad is explaining to me how he can trace the crypto wallets. And he's like, I've personally seen hundreds of millions of dollars of Tether move because of these scams. Oh, wow. And I'm kind of thinking there might be some way to locate Vicky. Maybe not Vicky herself, but Ice Toad is like, you know who you should really talk to is this Vietnamese hacker. Yeah.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Yeah, I mean, I obviously think it's pretty interesting. I'm with you.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
earlier so even within the crypto world tethers had kind of a dodgy reputation for years it had to settle a lawsuit with new york's attorney general who had alleged that tether had lied about the dollars that were backing the coin and Because of this, Tether had a lot of trouble finding anyone to hold this giant pile of money, which is a key part of the business.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
You need someone who has access to like the American financial system to hold your money. But Tether was based like nowhere in the world. It's one of those sort of stateless companies. And it was having issues with this. So Lutnick, who runs like a reputable New York investment bank called Cantor Fitzgerald, he stepped up and he offered to hold Tether's money.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Definitely. I mean, the crypto guys are very good at making it seem like they have a lot of jargon. They make it seem like there's some sort of really complicated and important technology that we're talking about. And it makes you think in the back of your mind, if you don't know that much about this, or even if you do, you're like, it can't possibly be as dumb as it sounds, could it?
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
And without that backing, it would have been a lot harder for Tether to keep growing and be as successful as it's been. And like we were saying before, this is a cryptocurrency company whose product has become really popular with criminals around the world. So what we've learned since that recently is that LUTNIC, as part of
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
agreeing to hold tether's money he also was able to purchase a stake in the company which is a big deal because tether it's incredibly profitable the company has like 100 employees and it makes more money than blackrock i think it made 13 billion dollars last year i mean this is a company that was dreamed up by a child actor from the mighty ducks which character from the mighty ducks
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
So not a main character. In the beginning, Gordon Bombay has a flashback and he plays like young Gordon Bombay who misses the penalty shot. Okay, young Gordon Bombay. All right. And it's run by this Italian guy who's a former plastic surgeon. who has never given an interview.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
The guy who until recently was the CEO was so elusive that when I started looking into Tether a couple of years ago, people told me they thought the CEO didn't really exist. I tracked him down and he is real. This is like a very weird company that was really legitimized by Lutnik. And Lutnik started vouching for them publicly. He gave a
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
an interview to Bloomberg from Davos where he was like, hey, Tether, I've seen their money. They got the money. You can trust them, something like that. And that also was really helpful. So it was kind of controversial at his confirmation hearing. He got asked a lot of questions about his relationship with Tether and what he thinks about... It's used for money laundering.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
And he kind of repeated his defense of the company and said, hey, Tether works with law enforcement. They're against crime. They want to stop it. You know, I've helped them improve their compliance. He just got confirmed. So he'll be the Commerce Secretary.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
His crypto czar, David Sachs, is an investor in Solana, which is like the network that the meme coins run on. So with these meme coins, right, it seems pretty weird. Like, is the government going to do anything about this? It's like a question you might ask.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
More or less. And he's come out and said, these are collectibles. These are digital collectibles, which is code for they should be unregulated.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Yeah, the Bitcoin Reserve is one of the craziest policies that has been put on the table here. And I saw Trump propose this at the Bitcoin conference in Nashville last year. And I was just shocked that he was repeating so many of the industry's talking points. And yeah, one Republican senator has sort of spelled out some details for this.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
And she would have the US government spend $100 billion to buy... Bitcoin. And as I explained before, people are not using Bitcoin for anything. So the pitch now that Bitcoiners have is that this is digital gold. The idea with the Bitcoin Reserve is that The price of Bitcoin will inevitably go up. And therefore, if the government should get in early and make money by trading it.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
And the thing to me is that this is a handout to anybody who already has Bitcoin. No one has any reason to buy Bitcoin like it's not used. You don't need it for anything. The point of Bitcoin now is the price going up. And so at this point, the price is very high. So like you or I buying Bitcoin is not going to do anything for the price. They need bigger like pools of money.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
What's the biggest pool of money? The government. So that's like the Bitcoiners. It's been actually their plan for a couple of years. It seemed very far fetched. But ever since they got El Salvador on board, they were a lot of Bitcoiners were like, hey, I think we can get other countries in on this, too.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
And they didn't have much luck until they came across Trump, who hasn't done it yet, to be fair.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Yeah, I think that's right. And some of them are mad, but I think the madness is balanced with this idea that it's a pretty helpful conflict of interest. It's like, wow, Trump might actually follow through on deregulating crypto. He's doing it himself. He kind of needs to. A lot of them have been complaining about the scams, but I think it's a little self-serving.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
With Malay, I thought it was interesting. I mean, this wasn't so different than Trump's meme coin. You know, he tweeted about a coin. It went up. Then it went down. People lost money. Other people made some money. And Millay had said, you know, he said it's not a scam. It's not his coin. And there's no crying in the casino. There's no crying in the casino.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Yeah. Yeah. But it's weird, like the opposition's calling for him to be impeached. And this one seems to have been a real scandal. Like within crypto world, people seem pretty upset about this compared to the kind of muted reaction to Trump having a meme coin, which also went up a lot and then down quite a lot.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
So the original idea for Bitcoin, the first cryptocurrency, was that this would be a alternative to regular currencies like the dollar or the yen. And the big innovation was that instead of being tracked by a central counterparty like a bank, there would be this decentralized network of computers that would keep track of this new currency. Now, that was 15 years ago.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Bitcoin is as old as WhatsApp or Uber. And this idea of it becoming an alternative currency is largely dead. No one's really using it for that. But instead, there's been this proliferation of other cryptocurrencies. And at this point... Most of them are not meant to be like dollars. They represent all sorts of different things.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
So some of them are kind of like stocks where if you buy a share of this, you buy a coin, you're almost like buying a share of some sort of company. Other times, it's like a new...
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
network like ethereum or solana where it's like a place where people are creating other crypto things and when you buy one of those coins you're kind of buying into the network and you get a share of its profits so that's almost like buying into like a crypto bank kind of right like it's like it's like investing in a stock for a bit or an exchange or a bank essentially
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Yeah, some of them are a lot like that. Like Sam Bankman Freed had one that was called FTT. That was basically just stock in his crooked exchange FTX. But at the silliest end, we have, and which is one of the most popular things in crypto right now, are meme coins. And the first one of these was called Dogecoin. And it's also like...
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
more than 10 years old, it was created as kind of a parody of Bitcoin. And it was saying, we're going to copy Bitcoin, we're going to change the name, we're going to put a picture of a dog on it. And It turned out that, I don't know if you think this is a funny joke, but it turned out enough people did think this was kind of interesting that they started to buy it.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Unlike a stock or unlike one of these ones where you're buying into a network that generates fees with Dogecoin or other meme coins, there's no way for it to ever generate any money. You're purely buying it on the idea that somebody else might buy it. also for no reason, driving the price up higher. It's kind of like a new form of gambling game. And in the last couple of years,
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Thousands of these meme coins, maybe even hundreds of thousands of these meme coins have been created. People are just pumping them out. And there are all these traders that are kind of have they've made it a game to chase like the new meme coin. And if you get in early, the goal is to get in before the masses and then profit when the price spikes and sell it before it inevitably collapses.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Well, true. I think the kind of twist is that In your classic pump and dump, like Jordan Belfort, more of the people that Belfort... When he was calling people, he was saying, hey, this stock is hot. They just discovered gold in Bolivia. It's going to go up. And so there was this element of lying about the prospects of this company. So people were being defrauded that way.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
In this case, you've got people like... Dave Portnoy from Barstool Sports being like, hey, I just created this dumb coin. It does not do anything. It'll probably collapse eventually. Do you want to buy some? And people have sort of organized themselves into this kind of pack of degenerate gamblers who move from meme coin to meme coin and try to make money on it.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Yes. So it's kind of funny, but The cryptocurrencies that have actually found the most widespread use are ones that are backed by dollars. And this is because in my book, Number Go Up, I was really focused on this one called Tether. It's the biggest stable coin. It's gotten so large that... There's something like $130 billion worth of it outstanding.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
And the pitch is that a tether will always be worth a dollar because it's backed by real dollars that tether the company keeps in the bank somewhere.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Yeah, I mean, that's certainly one popular reason. Criminals all around the world are figuring out that this is very handy because you can keep Tether in like an anonymous wallet and you could zap an unlimited amount to somebody other side of the world into their anonymous wallet. And unless law enforcement is able to figure out what your secret wallet address is, they would have no idea.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Compare it to like a bank or a credit card company that's going to ask a lot of questions about your transfers. You've got like Russia using it to evade sanctions. Chinese gangsters in Cambodia are using it to run this massive fraud and human trafficking operation. And also just crypto traders use it.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Basically, whether you're a criminal or you're selling sneakers, you don't want your currency to go up or down 10% in a day. So the stable coin is more attractive.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
So it's three days before inauguration. He writes on Truth Social that My new official Trump meme is here. It's time to celebrate. And honestly, a lot of people in this meme coin world were waiting for this moment because they knew if Trump ever did launch a meme coin, there'd be a lot of interest and it would go up a lot. And that becomes kind of a self-fulfilling prophecy.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
So Trump coin shot up as high as $72. On paper, Trump had $57 billion worth of Trump coin at that price. It's since...
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
crashed it's down to uh i think like 17 bucks now now it's a bit complicated but the best estimates are that trump by selling this meme coin made about a hundred million dollars because his holdings on paper would be hard to turn into real money without like totally crashing the price but he did make a hundred million dollars of totally real money that's the estimate of selling this meme coin so it really beats like you know a new trump hotel or like
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Trump steaks, Trump vodka. This is like the best way to monetize your celebrity.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
I believe that actually Witkoff was the business partner on Trump's first cryptocurrency, not the Trump coin.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Now, I mean, if he didn't get in on Trump coin too, I'm sure he would be mad because that was like a great money making opportunity right there. But Trump had an earlier cryptocurrency deal. called World Liberty, where Witkoff and his son had a big role.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
One interesting part of that was this guy, Alexander Vinik, appeared to be just like a crypto criminal who ran an exchange that some people say was even set up to launder the proceeds of hacks. It's not immediately obvious to me why Russia would want him back or what he had done for Russia. So I was intrigued that he was their side of that trade.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
So he runs a blockchain called Tron. He's been around for a while. And the SEC's case against him is that when he launched Tron and sold its new cryptocurrency, he engaged in manipulative trading and fraud activities. to make the price look like it was going up to help sell it to the public. Now, he denies this, but it's a serious case.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Now, so Trump's first crypto, World Liberty, was not an immediate success. And this was launched last year, around September, during the campaign. Now, Justin Sun, he's someone who I don't think would be allowed to donate to Trump's campaign. I'm not sure of his citizenship, but he doesn't regularly appear in the U.S., He bought initially $30 million of this World Liberty coin.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
Part of the reason the deal wasn't successful initially was that the terms of World Liberty are that if you buy the coin... 75% of all the money you put in just goes to the Trumps as a licensing fee. So Sun ended up putting in another $40 million. So that's him giving the Trumps $56 million. But they get a 20% licensing fee.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
He's fighting it and he's saying it should be dropped. Crypto reform and all these cases are kind of on the table, right? And now he's saying, hey, maybe you should really think extra hard about my case. Here's $56 million. Again, I should say he denies that he's trying to influence anything with his purchase. But... Who wouldn't tonight?
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
After he made the investment, he was named an advisor to World Liberty. So he's kind of in business with the Trumps now on this crypto. And just a couple weeks after he made the investment, he was at this crypto conference in Abu Dhabi. And at the conference, he was spotted meeting with Steve Witkoff, the envoy, and Eric Trump, who was there to give a speech about how Bitcoin was going to the moon.
The Bulwark Podcast
Jared Moskowitz and Zeke Faux: Scams Galore
So... It's pretty hard to believe that he would not take an opportunity to mention his case.