#345 – Coffeezilla: SBF, FTX, Fraud, Scams, Fake Gurus, Money, Fame, and Power

[0] The following is a conversation with Coffee Zilla, an investigator and journalist exposing frauds, scams, and fake gurus.

[1] He's one of the most important journalistic voices we have working today, both in terms of his integrity and fearlessness in the pursuit of truth.

[2] Please follow, watch, and support his work at YouTube .com slash CoffeeZilla.

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[10] I swear I do.

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[16] On average, people save up to $700 a year with rocket money.

[17] You know how there's garbage out in space?

[18] And space is really big, but it starts getting cluttered up.

[19] Same with there's garbage out in the ocean.

[20] And it's funny how this garbage just starts accumulating in different places.

[21] and that's what I think of like subscriptions and these little things that sneak in that you're not paying attention to that you signed up for with the best intentions but don't use anymore and you forgot you subscribe to it it's just really nice to get rid of that because it really does add up it's a great great way to save money and also to have an easy heart that you can feel safe signing up for stuff if you're legitimately curious knowing that it'll be caught and eventually you've removed with Rocket Money.

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[24] This episode is also brought to you by Eight Sleep and its new Pot Three mattress.

[25] It's a place of happiness for me, a great nap on a cold bed with a warm blanket, away from the world on thinking, focused on reading and drifting slowly into sleep as you probably are to the sound of my voice oh man maybe I should collaborate with 8th sleep where they have a little audio device in the mattress and I speak sweet nothing's into your ears as you fall asleep I think nobody will want that but, you know, I'm just brainstorming ideas here.

[26] Anyway, yeah, I'm a big, big, big, big believer of power naps.

[27] It's a really powerful way for me to refresh my mind.

[28] And it's just honestly really something I look forward to is doing that on an eight sleep bed versus like on the floor or on a hotel mattress.

[29] It's one of the things I look forward to actually to get back home to.

[30] Anyway, check it out and get special savings when you go to eightsleep .com slash Lex.

[31] This episode is sponsored by Better Help, spelled H -E -L -P -Hulp.

[32] They figure out what you need and match you with a licensed professional therapist in under 48 hours.

[33] I've been speaking with a bunch of folks recently about the value of therapy.

[34] It's kind of surprising to me how many people from all kinds of walks of life at some point in their life, if not continuously throughout their life, got a lot of value from therapy.

[35] I didn't realize this, I think, earlier in my life.

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[39] You should try as many things as possible.

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[44] What would I not give to talk to Martin Scorsesee?

[45] But until then, you can listen to the Masterclass.

[46] Actually, I mean, there's a really fundamental difference to Masterclass and podcasts.

[47] I think long -form podcasts are good at sort of having the fun, relaxed exploration of ideas, and Masterclass is, no pun intended, masterful at doing structured communication of those ideas from the best people in the world.

[48] It really, it's just a really crisp lecture on what those folks know best and are best at.

[49] So it's just infinite value, honestly.

[50] Especially if there's people on there that you really want to learn from, and I bet there is if you look at the list.

[51] Yeah, definitely worth trying.

[52] Go to masterclass .com slash Lex to give the gift of an annual membership when you buy one of your own.

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[57] And now, dear friends, here's coffee, Zilla.

[58] How do you like your coffee?

[59] Dark and soul crushing.

[60] That was the number one question on the internet.

[61] Do you like your coffee to reverberate deeply through the worst of human nature?

[62] Is that how you drink your coffee?

[63] I've gone through a lot of phases on coffee.

[64] I used to, in college, I would go super deep into, you know, grinding fresh beans, all of that kind of stuff.

[65] Water temperature exactly right.

[66] And then I hit a phase where I was just, it was the maintenance dose.

[67] Then I went to like espresso because I could get a lot more in.

[68] Yeah.

[69] And now I go through phases of like sometimes I like it with a little oat milk, sometimes a little half and half in sugar.

[70] Oh, you've gotten soft in your old age.

[71] I've gone a little, I have.

[72] But hey, if I'm doing a SBF interview, it's black that day, nothing less.

[73] Yeah.

[74] It's black, no sugar.

[75] The lights go down.

[76] What do you actually do in those situations, like leading up to a show, do you get hyped up?

[77] Like, how do you put yourself in the right mind space to explore some of these really difficult topics?

[78] I think a lot of its preparation and then once it happens, it's mostly fueled by sort of adrenaline, I would say.

[79] I really deeply care about getting to like the root cause of some of these issues because I think so often people in positions of power are let off the hook.

[80] So I really care about holding their feet to the fire and it translates into like a lot of energy the day of.

[81] So I never find myself like funny enough.

[82] I usually drink a lot of caffeine leading up to the interview, and then I try to drink like minimum the day of because I have so much adrenaline.

[83] I don't want to be like hyper -stimulated.

[84] I have to say, of all the recent guests I've had, the energy you had when you walked into the door.

[85] I'm excited.

[86] People are not excited to be here?

[87] I don't know.

[88] I think they're scared.

[89] I think they're scared.

[90] I feel like you were going to knock down the door or something.

[91] You were very excited.

[92] Like, that just energy.

[93] It was terrifying because I'm terrified at social interaction.

[94] Anyway, speaking of terrifying.

[95] You chose a good living of interviewing people.

[96] Face your fears, my friend.

[97] So let's talk about SBF and FTX.

[98] Who is Sam Bankman -Fried?

[99] Can you tell the story from the beginning as you understand it?

[100] Yeah.

[101] So Sam Bankman -Fried is a kid who grew up sort of from a position of huge privilege.

[102] both his parents are lawyers.

[103] I believe both of them were from Harvard.

[104] He went to MIT, went to like, or sorry, backing up a bit more.

[105] He went to like this top prep high school, then to MIT.

[106] Then he went to Jane Street.

[107] And after that, he started a trading firm in I think 2017 called Alameda Research with a few friends.

[108] Some of them were from Jane Street.

[109] Some of them worked at Google.

[110] And they were sort of the smartest kids on the block, or that's what everyone thought.

[111] They made a lot of their money on something called the kimchi premium, or at least the story goes, which just to explain that, the price of Bitcoin in Korea was substantially higher than in the rest of the world.

[112] And so you could arbitrage that by buying Bitcoin elsewhere and selling it on a Korean exchange.

[113] So they made their money early, doing kind of smart trades like that.

[114] They flipped that into market making, which they were pretty early on that, just providing liquidity to an exchange.

[115] And it's a strategy that is consider delta neutral, which means basically if you take kind of both sides of the trade and you're making a spread, like a fee on that, you make money, whether it goes up or down.

[116] So in theory, there shouldn't be that much risk associated with it.

[117] So Alameda kind of blew up because they would offer these people, you know, people who are giving out loans, they'd say, hey, we'll give you this really attractive rate of return.

[118] And we're doing strategies that seemingly are low risk.

[119] So we're a low risk bet, we're these smart kids from Jane Street, and you can kind of trust us to be this smarter than everyone else kind of thing.

[120] Around 2019, Sam started FTX, which is an exchange.

[121] Specifically, it specialized in derivatives, so like margins, kind of more sophisticated crypto products.

[122] And it got in with Binance early on.

[123] So, Binance actually has a prior relationship to FTX, which we'll explore in a second, because they're going to play a role in FTX's collapse, actually.

[124] Binance is the number one crypto exchange, and they're led by, he's called CZ on Twitter.

[125] I don't want to butcher his full name, but really smart guy has played his hand really well and built up a quite large exchange, and Binance was funding a bunch of different, like, So they funded, they helped invest into FTX.

[126] Early on, they invested 100 million.

[127] So these guys were kind of like teammates early.

[128] on SBF and CZ.

[129] And FTX quickly grew.

[130] They got like, especially in 2020, 2021.

[131] They got a lot of endorsements.

[132] They got a lot of credibility in the space.

[133] And eventually, FTX actually bought out Binance.

[134] They gave them $2 billion.

[135] So pretty good investment for CZ in a couple of years.

[136] And now lead that up to 2022.

[137] What happens?

[138] Luna collapse, three arrows capital collapse, which if you don't know, there's just these kind of.

[139] cataclysmic events in crypto, led by some pretty risky behavior, whether Luna was a token that promised really attractive returns that were unsustainable ultimately, and it just kind of spiraled.

[140] It did what's called a stable coin death spiral, which we can talk about if we need to.

[141] Stable coin death spiral.

[142] I can't wait until that actually enters the lexicon, like a Wikipedia page on it, like economic students are learning in a school.

[143] That's like a chapter in a book.

[144] Anyway, I mean, this is the reality of our world.

[145] This is a really big part of the economic system is cryptocurrency, and stable coin is part of that.

[146] Yeah, it's weird because on the one hand, cryptocurrency is supposed to somewhat simplify or add transparency to the financial markets.

[147] The idea is for the first time, you don't have to wait for an SEC filing from some corporate business.

[148] You can look at what they're doing on chain, right?

[149] So that's good because a lot of big financial problems are caused by lack of transparency and lack of understanding risk.

[150] But ironically, you get some people creating these arbitrarily complicated financial products like algorithmic stable coins, which then introduce more risk and blow everything up.

[151] So anyways, three hours capital blew up.

[152] And all of a sudden, this crypto industry, which everyone thought was going to the moon, Bitcoin to $100 ,000 is in some trouble.

[153] And FTX seems like the only people who, besides like Binance, who's also really big and stable and Coinbase, they seemed like they were doing fine.

[154] In fact, they were bailing out companies in the summer.

[155] I don't know if you remember that SBF was likened to, like, Jamie Diamond, who's the, you know, CEO of Chase, who, like, kind of was like the buck stops here, you know, I'm like the backstop, right?

[156] So, SBF was supporting the industry.

[157] He was, like, the stable guy.

[158] So come to, like, around October and November, there's all this talk about regulation.

[159] Everything's been blowing up.

[160] SBF's leading the charge on regulation.

[161] And CZ, the CEO of finance, gets word that maybe SBF is kind of like cutting them out or making regulation that would maybe impact his business.

[162] And he doesn't like that too much.

[163] They start kind of feuding a little bit on Twitter.

[164] So when it comes out, a coin desk report came out that FTX's balance sheet wasn't looking that good.

[165] Like it looked pretty weak.

[166] They had a lot of coins that in theory had value.

[167] if you looked at their market price, but for a variety of reasons, if you tried to sell them, they'd collapse in value.

[168] So it's sort of like this thing, a house built on sand.

[169] And a friend of mine on Twitter, he goes by Dirty Bubble Media.

[170] He released a report.

[171] And he basically said, I think these guys are insolvent.

[172] Well, CZ saw that.

[173] And he retweeted it and started adding fuel to the fire of like the speculation.

[174] Because up to this point, everyone thought FTX is super safe, super secure.

[175] There's no reason to not keep your money there.

[176] Tom Brady keeps his money there, whatever.

[177] And CZ kind of adds fuel to the fire by saying, not only am I retweeting this, adding kind of like validity to this speculation, but also I'm going to take the FTT that I got, which part of their balance sheet was this FTT token, which is FTX's like proprietary token.

[178] And Alameda and FTX control a lot of it.

[179] they were using this token to basically be a large amount of collateral for their whole balance sheet.

[180] So it accounted for this huge amount of their value.

[181] And the CEO of Binance had a huge chunk of it as well.

[182] And he said, I'm going to sell all of it.

[183] And the fuel that that introduced to the market is, if he sells all this FTT, and this FTT is underwriting a lot of the value of FTCs.

[184] Does FTT almost approximate similar things if you were to buy a stock in a public company?

[185] Is that kind of like a stock in FTX?

[186] It sort of was this proxy because what FTX was committed to doing was sort of like buying back FTT tokens.

[187] They would do this thing called the buy and burn.

[188] I think there was some amount of sharing in the revenue fees of FTCs.

[189] It was kind of this convoluted thing.

[190] In my opinion, the exact value of FTT was speculative from the beginning.

[191] And it was clear that it was very tied to the performance of FTX, which is important because we'll get to later, FTCS sort of built their whole scaffold on FTT, which meant that this scaffold was very wobbly, because if FTX loses a little bit of confidence, then your value goes down.

[192] When your value goes down, you lose more confidence and this goes down.

[193] So it was kind of like this thing that this flywheel that when it was going well, you got huge amount.

[194] of growth.

[195] When it's going bad, you get a exchange death spiral, so to speak.

[196] Actually, this structure, it's a pretty non -standard structure, did the architects of its initial design anticipate the wobbliness of the whole system?

[197] So putting fraud and all those things that happened later aside, do you think it was difficult to anticipate this kind of FTT, FTX, elementary research, we're dynamic?

[198] No, because I think sophisticated traders always think in terms of diversification and correlation.

[199] So if you're trying to, the way to think about risk in investing is like, if I invest in you, Lex Friedman, and then I also invest in some product you produced, the performance of those two things will be pretty correlated.

[200] So whether I invest in you or I invest in this product that you, like, are completely behind, I'm not de -risking.

[201] I'm basically counting all on you doing well, right?

[202] And if you do bad, my investments do very bad.

[203] So if I'm trying to build a stable thing, I shouldn't put all my eggs in the Lex Friedman basket unless I'm positive that you're going to do well, right?

[204] And these people...

[205] As your financial advisor, I would definitely recommend you do not put all your eggs in this basket.

[206] Right.

[207] And so you can think about it.

[208] Like, if I know that, these people were trained to think like this.

[209] And so the idea, idea that you could start this exchange, you're worth billions of dollars, and you underwrite your whole system by betting, putting most of it on your own token is insane.

[210] And what's crazy is we'll later find out that they were basically taking customer assets, which were real things like Bitcoin and Ethereum with risks that were not so correlated to FDX, and they were swapping them out.

[211] They were using to go basically gamble those and putting FTT in its place as, quote, value.

[212] So they were increasing the risk of the system in order to bet big with the idea that if they bet big and won, we'd all be singing their praises.

[213] If we bet big and lost, I don't know if they had a plan.

[214] But I think they were, I think they were being extremely risky.

[215] And there's no way to avoid their knowledge of that.

[216] So when you say customer assets is, I come to this crypto exchange.

[217] I have Bitcoin or some other cryptocurrency.

[218] And this is a a thing that has pretty stable value over time.

[219] I mean, as crypto, relatively so, and I'm going to store it on this crypto exchange.

[220] And that's the whole point.

[221] This is a, so this thing to the degree that crypto holds value, it's supposed to continue holding value.

[222] There's not, there's not supposed to be an extra risk inserted into the thing.

[223] Right.

[224] Right.

[225] And FTX was pretty clear from the beginning that they wouldn't invest your assets in anything else.

[226] They wouldn't do anything else with it.

[227] They wouldn't trade it.

[228] That's what made FTX so such like a horror story for investor confidence is basically they made every signal that they would not do anything nefarious with your tokens.

[229] They would just put them to the side, put them in a separate account that they don't have access to.

[230] And they just kind of wait there until the day that you're ready to, with.

[231] withdraw them.

[232] That's explicitly what they told their customers.

[233] So going back to the story a little bit, CZ then says, hey, I'm selling this token that underwrites the value of FTX.

[234] There's a total panic.

[235] SBF during this time makes, says several lies, such as FTX assets are fine.

[236] We have enough money to cover all withdrawals.

[237] And a day later, he basically admits that that wasn't the case.

[238] They don't have the money.

[239] They're shutting down.

[240] And then a few days later after that, they declared bankruptcy.

[241] There's, I should be clear, there's Alameda Research, FTX International, and FtX U .S., which is the U .S. side of things.

[242] These are three different entities.

[243] All of them are in bankruptcy, and it's not clear to the extent that they were co -mingling funds, but it's clear that they were commingling funds to some extent.

[244] So they kind of were taking from each other, and that is where the fraud happens, right?

[245] Because if going back to our earlier analogy, if you're supposed to set funds aside and I find out you were using it to go make all these arbitrage trades or do market making or all these activities you were known for for your like hedge fund trading firm thing, that's a huge problem because he basically lied about this.

[246] And especially when he's saying explicitly that we have these things, we have these funds and these things turn out to be lies.

[247] Well, again, the question of fraud comes in and it's just like there's no way he didn't know.

[248] So the obvious question might be, well, why isn't he locked up?

[249] Why is he running around?

[250] And it's because really his story is that he didn't know any of it.

[251] He found out that they had to steal man his position, he would say he was totally disconnected from what Alameda was doing.

[252] He had no idea that they had such a large margin position that they had an accounting quirk and that accounting quirk hit $8 billion.

[253] from from from his view and so when he was saying that they had money to cover it he was saying that truthfully to the best of his ability and he just was so distracted at the time that he made a series of increasingly embarrassing mistakes and now he owes it to the people to write those wrongs by publicly making this huge apology tour so you might have seen him on i mean he's been talking to nearly everyone um about basically how he's just didn't know what he's doing.

[254] He's the stupidest man alive.

[255] So what are some interesting things you've learned from those interviews?

[256] I think I've appreciated why you don't talk in that position.

[257] Most people wouldn't talk.

[258] Most people would listen to their legal counsel and not talk.

[259] I do not think he's any lawyer worth their salt would tell him to talk because right now I think the danger of what he's doing is he's locking himself into a story of how things happened.

[260] And I don't think that story is going to hold up in the coming months because I think it's impossible from the insider conversations I've had with Alameda research employees, with FTX employees.

[261] It's impossible to square what they are telling me with no like incentive to lie with what SBF is telling me with every incentive to lie, which is fundamentally that he didn't know they were commingling funds.

[262] He didn't know they were gambling with customer money.

[263] And it was basically this huge mistake.

[264] And, It's Alameda's fault, but he wasn't involved in Alameda, a company he owned.

[265] So like a compassionate but heart -hitting gangster that you are, very recently, you interacted with SBF on, I like I adjust the suspenders as you're saying this.

[266] You interact on Twitter spaces with SBF and really put his feet to the fire with some hard -hitting questions.

[267] What did you ask and what did you learn from that interaction?

[268] Sure, I should say first, this was not a willing interaction.

[269] I mean, I thought that was kind of the funny part of it.

[270] Because I've been asking him for an interview for a while.

[271] He's been giving interviews to nearly everyone who wants one, big channels, small channels.

[272] He didn't give me one, but I managed to get some by sneaking up on some Twitter spaces and DMing the people and like being like, hey, can I come up?

[273] So I didn't get him to ask everything that I wanted because he like would leave sometimes, you know, after I asked some of the questions.

[274] But really what I asked was about this $8 billion and zooming in on the improbability of his lack of knowledge.

[275] It's sort of like if you run a company and you know the insides and outs and you're the top of your field, top, top in class, and all of a sudden it all goes bust and you say, I had no idea how any of this worked.

[276] I didn't I didn't know it's like the guy who runs Waterberger saying I didn't know where we sourced our beef.

[277] I didn't know where we that's a Texas example actually.

[278] Thank you.

[279] I appreciate.

[280] Let's let's take it like worldwide Walmart like I didn't know we used Chinese manufacturers.

[281] It's like that's impossible to become Walmart you have to know how like how your supply chain works.

[282] You have to know even if you're at a high level you know how this stuff works.

[283] Can I do a hard turn on that and go sure as one must to Hitler?

[284] uh, Hitler's writing is not on any of the documents around as far as I know, uh, on the final solution.

[285] So in, in some crazy world, he could theoretically say, I knew, I didn't know anything about death camps.

[286] Uh, so there's this plausible deniability in theory.

[287] So that's, but that, most people would look at that and say, uh, it's very unlikely, you know, no, especially of all the insiders are coming out and saying, no, no, no, of course he knew.

[288] He was directing us from the top.

[289] I mean, what was clear, what's interesting about the structure and, like, I love the nitty.

[290] So we're back to SBF.

[291] We went to Hitler.

[292] Sorry.

[293] Now we're back to the SBF.

[294] I wanted to turn us as fast as possible away from Hillary.

[295] Yeah.

[296] I, I. So the insiders in what Alameda research?

[297] Alameda research.

[298] What was interesting is that there was this sort of one -way window going on between Alameda and F -TX, where F -TX employees didn't know a lot of what was going on.

[299] me to insiders, and I would say by design, knew almost everything that was going on at FTX.

[300] And so I think that was really interesting from the perspective of a lot of the so -called, like, what you could, what he's trying to ascribe to as like failures or mistakes or ignorance and negligence, when looked at closely are much more designed and they sort of don't arise spontaneously.

[301] because like let's say so there's this thing in banking and like trading where if I run a bank and you run like a trading firm we need to have informational walls between us because there's huge conflicts of interest that can arise right so the negligent argument might be that like oh we just didn't know we're sort of these dumb kids in the Bahamas so we shared information equally but when you see a one way wall that starts to look a lot different right if I have a back end source of looking at or sorry you're the trading firm so you have a back end way to look at all my accounts, and I have no idea that you're doing that, that all of a sudden looks like a much more designed thing.

[302] When it would be plausible, let's say going to use another analogy too, if you're saying, look, I co -mingled funds because I was so bad at corporate structures, you would expect those companies to have a very simple corporate structure because you didn't know what you're doing, right?

[303] But what we see with FTX and Alameda is they had something like 50 companies and subsidiaries and this impossibly complicated web of corporate activity, you don't get there by accident.

[304] You don't wake up and go, oh, I designed like this watch that ticked a very specific way, but it was all accidental.

[305] If you really didn't know what you were doing, you'd end up with a simple structure.

[306] So even just like from a fundamental perspective, what SBF was doing and like the activities they were engaging in were so complicated and purpose.

[307] designed to obfuscate what they were doing, it's impossible to subscribe to the negligence argument.

[308] And I want to quickly say, too, like, I don't think a lot of people have honed in on this.

[309] There was insider trading going on from Alameda's perspective, where they would know what coins FTX was going to list on their exchange.

[310] There's a famous effect where, let's say you're this legitimate exchange, you list a coin, the price spikes.

[311] Insiders told me it was a regular practice for Alameda insiders to know that FTX was going to list a coin and as a company buy up that coin so they could sell it after it listed.

[312] And they made millions of dollars.

[313] How do you do that accidentally?

[314] Yeah.

[315] And that's, that's illegal.

[316] Totally illegal.

[317] So that's illegal from like, and if an individual does it, it's illegal.

[318] It's fraud.

[319] What if a company is systematically doing it?

[320] And you can't tell me that FTX or somewhat at FTX wasn't feeding that information.

[321] information to Alameda, or somehow giving them keys to know that.

[322] And that would happen at the highest level.

[323] It would happen at SPS level.

[324] And this is why his arguments of, I was dumb, I was naive, I was sort of ignorant, are so preposterous because he's dumb and ignorant the second it becomes criminal to be smart and sophisticated, right?

[325] But then also coming out and talking about it, which is a bizarre move.

[326] It's a bizarre and almost a dark move.

[327] Can you tell the story of the $8 billion?

[328] You mentioned $8 billion.

[329] What's the $8 billion?

[330] What's the missing $8 billion?

[331] Yeah.

[332] So it's really interesting because it's sort of like wire fraud.

[333] You're sort of, he's sort of copping to like smaller crimes to avoid the big crime.

[334] The big crime is you knew everything and you were behind it, right?

[335] The smaller crimes are like a little wire fraud here, little wire fraud there.

[336] So what the $8 billion is is that FTCS didn't always have banking.

[337] It's hard to get banking as a crypto exchange.

[338] There's all these questions of like, where's the money coming from?

[339] Is it coming from money launderers?

[340] So for a variety of reasons, it's always been hard for exchanges to get bank accounts.

[341] So before, when FTX was just getting started, they didn't have a bank account.

[342] So how do you put money on FTX?

[343] Well, they would have you wire your money to their trading firm.

[344] Their wiring instructions would go to their trading firm.

[345] It's easier to get banking as a trading firm.

[346] So you'd put your money with the trading firm, and then they'd credit you the money on FTX.

[347] Okay, first of all, this is a whole circumvention of all these banking guidelines and regulations And that's the first thing that I think is illegal.

[348] But basically what SBF argued is that there was an accounting glitch error problem where when you'd send money to Alameda, even though they'd credit you on FTX, they wouldn't safeguard your deposits.

[349] Like your deposits would go into what he called a stub account, which is just like some account that's not very well labeled, kind of like a placeholder account.

[350] and he didn't realize that those were Alameda's funds or they were playing with those funds and that they basically should have safeguarded that for customers.

[351] That's his explanation.

[352] It's preposterous because it's $8 billion.

[353] But anyways.

[354] Just poor labeling of accounts.

[355] Of an $8 billion account.

[356] I mean, it's like...

[357] A billion.

[358] I do this all the time and programming.

[359] This is the craziest thing.

[360] Like, he was talking to me. And at one point in the conversation, he's like, yeah, I didn't have persuasion.

[361] He said, I didn't have knowledge of Alameda's accounts.

[362] And I said, well, Forbes a month ago was getting detailed accounting of Alameda.

[363] And he goes, oh, that wasn't detailed accounting.

[364] I just knew I was right within $10 billion or so.

[365] What is that error margin?

[366] $10 billion for a company that is arguably never worth more than $100 million.

[367] Probably never even worth more than $50 billion.

[368] Your error margin is $10 billion.

[369] You have to be, this is a guy.

[370] who is sending around statements that like there was no risk involved and you're telling me he had a error margin of 10 billion dollars that is the difference between like a healthy company and a company so deep underwater you're going to jail so it you have to believe that he is impossibly stupid and square that with the sophistication that he brought to the table it's it i think it's an impossible argument i don't even think it's did you think he is incompetent insane or evil if you were to bet money on each of those incompetent insane or evil insane meaning he's lying to everyone but also to himself uh which you could which is a little bit different than incompetence he's not incompetent so the i think he's some combination of insane and evil but it's impossible to know unless we know deep inside his heart how self like diluted he is versus a calculated strategy.

[371] And I think if you look at SBF, he's such a, I think he's a fascinating individual.

[372] Just, I mean, you know, he's a horrible human being.

[373] Let's start there.

[374] But he's also somewhat interesting from a psychology perspective because he's very open about the fact that he understands image and he understands how to cultivate image, the importance of image, so well that I think a lot of people, even though they've talked about it, aren't emphasizing that enough when interacting with him.

[375] This is a man whose entire history is about cultivating the right opinions at the right time to achieve the right effect.

[376] Why do you think he would suddenly change that approach when he has all the more reason to cultivate an image?

[377] So he's extremely good, naturally, or...

[378] I don't know if he's good, but he's like he's a hyper aware so he's deliberate in cultivating a public image and controlling the public image you you know about the like democrat donations like he he knew to donate to the right people 40 million dollars he says on a call that we released with tiffany fong he says on a call that he donated the same amount to republicans there's speculation on whether this is true because he's a liar whatever so caveat there but he said he donated to republicans the same amount but he donated dark because he knew that most journalists are liberal, and they would kind of hold that against him.

[379] So he wanted all the sides to be in his favor, in his pocket, while simultaneously understanding the entire media landscape and playing them like a fiddle by cultivating this image of, I'm this progressive, woke billionaire who wants to give it all away, do everything for charity.

[380] I drive a corolla while living in a million -dollar penthouse, multi -million, but that was sort of the angle.

[381] He understood so well how to play the media.

[382] And I think he underestimated when he did this how much people would put him under a deeper microscope, and I don't think he has achieved the same level of success in cultivating this new image because I think people are so skeptical now.

[383] No one's buying it.

[384] But I think he's trying it.

[385] He's doing it to the best.

[386] But it has work leading up to this particular.

[387] wobbly situation.

[388] So before that, wasn't there a public perception of him being a force for good, a financial force for good?

[389] 100%.

[390] Yeah.

[391] Somebody from Sequoia Capital, you know, wrote this glowing review that he's going to be the world's first trillionaire.

[392] There's so many pieces done on he's the most generous billionaire in the world that he was sort of like the steel man of, you know, it's possible to make tons of money.

[393] This is like the effect of altruism movement, make as much money as you can, as fast as you can and give it all away.

[394] And he was sort of like the poster child for that.

[395] And he did give some of it away and got a lot of press for it.

[396] And I think that was kind of by design.

[397] I want to address a real quick point.

[398] A lot of people have said that like finance played a role.

[399] And while they catalyzed this, insolvency is a problem that will eventually manifest either way.

[400] So I don't put any blame on CZ for basically causing.

[401] this meltdown.

[402] The underlying foundation was unstable, and it was going to fall apart at the next push.

[403] I mean, he just happened to be the final kind of, like, I don't know, the straw that broke the camel's back.

[404] Yeah, the catalyst that revealed the fraud.

[405] Yeah, but it's like, I don't, I don't think he's culpable for FTX's, like, malfeasance in how they handled accounts, if that makes sense.

[406] So what role did they play?

[407] Could they have helped alleviate some of the pain of investors of people that held funds there?

[408] Yeah, I mean, probably, I don't know.

[409] I would see some kind of weird obligation, like with the $2 billion they made on FTX.

[410] Remember, they got $2 billion, some of it in cash, some of it in FTT token.

[411] So I don't know how much actual cash they have from that deal.

[412] But they have billions from the success of what seems to be a fraud.

[413] It seems to have been a fraud for early on.

[414] They had the back door as early as 20, early 2020, from what I can tell.

[415] So the back door between FTX and Alameda, Elmeter research.

[416] Do you think CZ saw through who SPF is?

[417] What is he's doing?

[418] No, I think, I think CZ is like, he's a shark.

[419] I think he's good at building a big business.

[420] Like a good shark or a bad shark?

[421] I don't know.

[422] I don't know.

[423] I think sharks just eat.

[424] I mean, I don't, I don't know.

[425] I think my relationship with shark has like finding Nemo there's a shark in that sure I don't know so I think like Jeff Bezos is a shark so whether people have loaded connotations of like how they feel about Jeff Bezos I mean I would say like I think CZ is a ruthless businessman I think he's calculated he's very deliberate and I think what he should do in this position is forfeit the funds that he profited from that investment because largely I think it was it's owed to the customers.

[426] There's so much hurting out there.

[427] So I think they could do a lot of good around that.

[428] I don't know if they will because I don't know if he sees it in his best interest.

[429] I think that's probably how he's thinking.

[430] But, yeah, I think they could have helped or they could still help there.

[431] Who do you think suffered the most from this so far?

[432] The little account holders.

[433] This is always true.

[434] So one of the big temptations with fraud, I've covered a lot of scams, frauds.

[435] is everyone looks at the big number, everyone, that's the headline, billions of dollars, the top 50 creditors, what everyone thinks at first.

[436] But quickly, when you dig down, you realize that most people who lost $10 million, I mean, I'm sure that's terrible for them.

[437] I wish them to get their money back.

[438] But it's usually the people with like 50 ,000 or less that are most impacted.

[439] Usually they do not have the money to spare.

[440] Usually they're not diversified in a sophisticated way.

[441] So I think it's those people.

[442] I think it's the small account holders that I feel the worst for and unfortunately they often get the least press time or air time that's the really difficult truth of this is that especially in the culture of cryptocurrency there's a lot of young people who are not diversified they're basically all in on a particular crypto and just breaks my heart to think that there's somebody with 50 ,000 or 30 ,000 or 20 ,000 but the point is that money is everything they own right and now now what their life is basically destroyed like you know imagine you're 18 19 20 21 years old you saved up you've been working you saved up and this is this is it this is basically destroying a life what's so brutal about this is that this all comes on the back the entire crypto market comes on the back of comes from the deep distrust of traditional finance right yeah 2008 everybody lost trust in the banking systems.

[443] And they lost trust that if those banking systems acted in a corrupt way, that they would receive the justice.

[444] It turned out that the banks received favorable treatment.

[445] People didn't.

[446] So people lost faith in the structure of our financial system in a way that we're still feeling the reverberations of it.

[447] And so when crypto came along, it was like kind of this way to reinvent the wheel, reinvent the world for the like sort of lowly and the like less powerful and kind of level the playing field.

[448] So it's so sad about events like this is you see that fundamentally a lot of the power structures are the same, where the people at the top face little repercussions for what they do.

[449] The people at the bottom are still getting screwed.

[450] The people at the bottom are still getting lied to.

[451] And law enforcement is way behind the ball.

[452] Do you think this really damaged people trust in cryptocurrency?

[453] For sure.

[454] Way bigger than Luna way bigger than Three Arrow's Capital.

[455] It's because of who SBF was.

[456] It's not just the dollar figure behind it.

[457] It's because he wooed so many of our media elites who should have been calling him out or at least investigating him and not rubber stamping him.

[458] It's an indictment of our financial system, even our most sophisticated people in Black Rock, in Sequoia, who didn't see And you just wonder, like, if you can't trust the top people in crypto who are supposedly the good guys, the guys saving crypto just a month ago or two months ago, he was the guy on Capitol Hill that was talking to Gary Gensler to all the top people in Washington, he was orchestrating the regulation of crypto.

[459] If that guy is a complete fraudster, liar, psychopath, and nobody knew it until it was too late.

[460] What does that mean about the system itself that we're building?

[461] So you are one of not the best like fraudster investigators in the world.

[462] Did you sense, did you, was this on your radar at all SBF in the over the past couple of years?

[463] Were any red flags going off for you?

[464] Yes.

[465] So funny enough, like one of my videos from six months ago or so blew up because I got to give a lot of credit to Matt Levine of Bloomberg, great journalist, great finance journalist.

[466] And I want to say when I like talk about media elite, there are people doing great work in these mainstream institutions.

[467] It's not a monolith, just like independent media isn't all doing great work and all the corporate media is bad or whatever.

[468] There's like these overarching narratives that I don't subscribe to.

[469] So Matt Levine's great journalist, he did an interview with SBF where he got Sam to basically describe a lot of what was going on in defy, but it kind of a larger philosophy around crypto.

[470] And he described a Ponzi scheme where he described this black box.

[471] It does nothing.

[472] But if we ascribe it value, then we can create more value and more value and more value.

[473] And it kind of was this ridiculous description of a Ponzi scheme, but there was no moral judgment on it.

[474] It was like, oh, yeah, this is great.

[475] We can make a lot of money from this.

[476] And Matt is like, well, it sounds like you're in the Ponzi business and business is good.

[477] I made a video about that.

[478] I said, this is ridiculous.

[479] This is absurd.

[480] Whatever.

[481] It's I didn't explicitly call SBF a fraud there.

[482] And I think if I'm being, I think I saw some of it, but like many people, I think a lot of us were kind of like, I think a lot of us missed how wrong everyone could be at the same time.

[483] I did notice leading up to the crash what was happening.

[484] And I called it out a day or a day and a half before it happened.

[485] because I saw my friends post a dirty bubble media and this was the first real look into the heart of their finances because they were this black box so you just kind of had to evaluate them without knowing much and once we got a peek under the hood of what their finances were I realized oh my gosh these guys might be completely insolvent so I made a tweet about it I hope some people saw it and got their money out but pretty quickly after that I caught the narrative of what was really going on at Alameda that it was basically this Ponzi scheme that they had built.

[486] Do you ever sit like Batman in the dark since he fight crime and wonder, like, sad, just staring into the darkness and thinking I should have caught this earlier?

[487] Yeah, I think.

[488] In your, in your $10 billion studio, $10 million?

[489] $10 million.

[490] We're working our way there.

[491] With a bunch of cocaine on the table.

[492] Sure, like it's never enough.

[493] It's never enough.

[494] Like, you always could be catching stuff sooner.

[495] You always could be doing more.

[496] I mean, the fascinating thing you said is that one of the lessons here is that a large number of people, influential, smart people could all be wrong at the same time in terms of their evaluation of SBF.

[497] This is one thing that I don't understand, too, is like, I think it's one thing to not see something.

[498] I think it's another thing to, like, rubber stamp or explicitly indefinitely indebted.

[499] endorse.

[500] I feel like a lot of people didn't look too close at SBF because I think a lot of the warning signs were there.

[501] But my feeling is if you're a Sequoia, if you're a Black Rock, wouldn't you do that due diligence?

[502] I mean, like before just endorsing something, especially in the crypto space, this is just why I don't do any deals in the crypto space ever.

[503] Because it's impossible to know which ones are going to be the like big hits or the big frauds or, you know, whatever.

[504] But if you're going to make that bet, if you're going to make that play, you would think that you would do all the research in the world and you would get sophisticated looks at their liabilities, at how they were structured, all that stuff.

[505] And that is the most shocking part, is not that, you know, people missed it because you can miss fraud, but that there were so much, so many glowing endorsements like, this guy is not going to be that thing.

[506] We explicitly endorse him.

[507] I saw a fortune magazine.

[508] He was called the next Warren Buffett.

[509] It's just crazy.

[510] Do you think it's possible to have enough like Tom Brady endorsements that you don't really investigate?

[511] So like, there's a kind of momentum like societal social momentum.

[512] I think that's the problem.

[513] I actually think that's hugely a blind spot of our society as we have all these heuristics that can be points of failure where like a rule of thumb is if you go to an Ivy League, well, you must be smart, right?

[514] A rule of thumb is, if both your parents are Harvard lawyers, you must not, you must know the law.

[515] You must, like, kind of be sophisticated.

[516] The rule of thumb is, if you're running a billion dollar exchange, you must be somehow, somewhat ethical, right?

[517] And all of these heuristics can lead to giant blind spots where you kind of just go, oh, we'll check.

[518] Like, I don't really, it's a lot of energy to look into people.

[519] And if enough of those rules of thumb are met, we just kind of check them off and put them through the system.

[520] So, yeah, it's been hugely exposing for, sort of like our blinds.

[521] And you don't know maybe how to look in.

[522] For example, there's a few assumptions.

[523] Now, there's a lot of people are very skeptical of institutions of government and so on, but perhaps too much so.

[524] I agree.

[525] But for some part of history, there was too much faith in government.

[526] And so right now, I think there's faith in certain large companies.

[527] There's distrust in certain ones and trust in others.

[528] Like, people seem to distrust Facebook, extremely skeptical of Facebook.

[529] but they trust I think Google with their data I think they trust Apple with their data much more so like search people don't seem to be Google search like I'm just gonna I'm gonna put it in there have you ever looked at your Google search history your Google search history has got to be some of the darkest things oh I don't think I've ever looked at my Google search history I'm pretty careful with like browser hygiene and stuff like that because I think it's Well, Google search history, unless you explicitly delete, is there.

[530] I recommend you look at it.

[531] It's fascinating.

[532] Look, because it goes back to the first days of you using Google search history.

[533] Fun fact, actually, about that.

[534] No, no, no, I am aware of that.

[535] I just mean for, like, certain sensitive topics where, like, I'm investigating some fraud and I go sign into their website, right, log in.

[536] I won't use, like, a traditional browser.

[537] I'll use a VPN, and I'll, like, put it on, like, Brave or something like that.

[538] You log in, Ukraine account is Lex Friedman.

[539] Yeah, exactly.

[540] exactly exactly you mentioned effective altruism yes you know SBF has been associated with this effective altruism which made me look twice at EA sure and see like wait um ID what's what's going on here is this was this used by SBF to give himself a good public image or is there something about effective altruism that makes it easy to misuse by bad people What do you think?

[541] Yeah, it's interesting.

[542] He could have endorsed a wide range of philosophies.

[543] And I guess you just have to wonder, are all those, would those philosophies also be tainted if he had gone bad?

[544] I guess effective altruism is sort of unique because he used it as part of his brand.

[545] It wasn't like he was, he described himself as a consequentialist and like that ended up mattering.

[546] It was like he described himself as an effective altruist and he used that part of the brand to lift himself up.

[547] I guess that's why it's getting so much scrutiny.

[548] I think the merits of it should speak for themselves.

[549] I mean, I don't personally, I'm not personally an effective altruist.

[550] I personally am motivated by giving in part emotionally.

[551] And for some reason that I can't exactly describe, I think that's somewhat important.

[552] I don't think you should detach giving from some personal connection.

[553] I find trouble with that.

[554] And like I said, it's for reasons I can't describe because effective.

[555] altruism is sort of the most logical ivory tower position you could possibly take.

[556] It's like strip all humanity away from giving.

[557] Let's treat it like a business and how many people can we serve through the McDonald's line of charity for like the dollar, right?

[558] I just personally don't resonate with that, but I don't think the entire movement is like indicted because of it.

[559] Typically most people who care about giving and charity, on the whole, are nice people.

[560] And are, so I can't speak for the whole movement.

[561] I certainly don't think SBF indicts the whole movement, even though I personally don't subscribe to it.

[562] Yeah, it made me pause, reflect, and step back, like, about the movement and about anything that has a strong ideology.

[563] So if there's anything in your life, there's a strong set of ideas behind it, Be careful.

[564] Yeah, I mean, look, I kind of feel like what it teaches me and what I kind of think about, when I think about systems, is that no system saves you from the individual.

[565] No system saves you from the individual, their intentions, their lust for power or greed.

[566] I mean, I think one of the great ideas is the decentralization of power.

[567] And like, this is why I think democracies are so great is because they decentralize power across a wide range of like interests and groups and that being an effective way to kind of try as best as you can to spread out the impact of one individual because one bad individual can do a lot of harm as, I mean, clearly as seen here.

[568] But now, I don't think it has anything to do with ideology because it's not like being an effective altruist made Sam Bankman freed a fraud.

[569] He was a fraud who happened to be an effective altruist.

[570] That makes sense.

[571] So there is something about, yes, no system protects you from an individual, but some system enable or serve as a better catalyst than others for the worst aspects of human nature.

[572] So for example, communist ideology, I don't know if it's the ideology or its implementation in the 20th century.

[573] It seemed like such a sexy and powerful and viral ideology that it somehow allows the evil bad people to like sneak into the very top and so like that's what i mean about certain ideas sound so nice that allow you like the the lower classes the workers the people that do all the work they should have power they they have been screwed over for far too long they need to take power back that sounds like a really powerful idea and then it just seems like with those powerful ideas evil people sneak in to the top and start to abuse that power?

[574] Yeah, I think, I mean, I don't have a lot of probably big -brain political takes, but what I can say is that you can never get away from both the system and the individual mattering.

[575] For sure, some systems incentivize some behaviors in certain ways.

[576] But some people will take that and go, okay, all we need to do is design the perfect system and then these individuals will act completely rationally or responsibly in accordance to what our incentives say.

[577] That's not true.

[578] You could also say all we have to do is focus on the individual and all we have to do is just create a society which raises very well -adjusted people and then we can throw them into any system with any incentives and they will act like responsibly, ethically, morally.

[579] And I also don't think that's true.

[580] So incentives are real, but also the individual ultimately plays a large role too.

[581] So yeah, I don't know.

[582] I come down sort of in the middle there.

[583] And some of that is just accidents of history to which individuals finds which system you know uh come the face of that yeah with fdx versus uh coin base versus binance which individual with which kinds of ideas and uh life story come to power because that that matters it's kind of fascinating that history turns on these small little events done by small little individuals that uh you know hitler's a failed artist or you have FDR or you have all these different characters that do good or do evil onto the world.

[584] And it's like single individuals and they have a life story and it could have turned out completely different.

[585] It's, I mean, it's the flap of the butterfly wings.

[586] So yeah, you're right.

[587] We should be skeptical as attributing too much to the system or the individual.

[588] It's all like a beautiful mess.

[589] That was like a Lex line.

[590] I've heard quite a few episodes and that's like such a Lex line.

[591] It's a beautiful mess.

[592] All right.

[593] Beautifully said.

[594] All right.

[595] Sorry, I'm a fan of the show.

[596] Okay, I love you too.

[597] All right.

[598] Can you think of possible trajectories how this FtX, SBF saga ends?

[599] And which one do you hope for?

[600] Do you hope that SBF goes to jail?

[601] That's the individual.

[602] And in terms of the investors and the customers, what do you hope happens?

[603] And what do you think are the possible things that can happen?

[604] So, A, yeah, I definitely think, SPF should go to jail for nothing else, for a semblance of justice, the facsimile of justice to occur for all the investors.

[605] I also think there are people probably several steps down the chain that probably knew, at least Caroline Ellison.

[606] You can have questions about sort of their, you know, Dan Friedberg, who I'd love to talk about as well.

[607] There were a lot of people in that room who I think knew.

[608] I think we do so much of like the one guy.

[609] is all to blame.

[610] Let's throw everything at him when clearly this was a company -wide issue.

[611] So everyone who knew, I think, should face the same punishment, which I think should be jail for all of those people.

[612] In part to send a signal to anybody that tries this kind of stuff in the future.

[613] Yeah, absolutely.

[614] I mean, one of the big things that you saw, like, okay, take a microcosm of all of this action and just look at like the influencer space.

[615] Right.

[616] There's a ton of deals that were done that I've covered ad nauseum about influencer finds out they can make a lot of money selling a crypto coin.

[617] The first thing they wonder is, am I going to get caught?

[618] If I do this, is there a consequence?

[619] And if the answer is no, then it's a pretty easy decision as long as you don't like have any moral scruples about it, which apparently none of them did or a lot of them didn't, I should say.

[620] So as soon as somebody steps in and regulates, that math changes and all of a sudden there's a self -interest reason to not go do the bad thing.

[621] So for example, and I can give a concrete example of this, there was a NFT, the first ever NFT sort of like official indictment or the DOJ released, this press release, that they're charging these guys who ran a NFT project that they didn't follow through on their promises.

[622] They made all these promises lied and then ran away with the money.

[623] First ever consequence for anyone in the NFT space.

[624] that day that that press release came out, I saw several NFT projects come back to life from the dead.

[625] Why?

[626] Because all those founders are freaking out.

[627] And they realized we scammed people.

[628] We have to go at least make it look like we're doing the right thing.

[629] Right?

[630] Even just, so that's on the optic side.

[631] But there's also tons of people who now go, oh, basically law enforcement is on the scene.

[632] We can't do the same thing.

[633] So there is a very pragmatic reason for this punishment.

[634] It's very much just because people work it into their math of, should I commit fraud?

[635] And the last several years have been very, sort of has been like a little bit of a nihilistic landscape where no one was getting punished.

[636] And so there's this question of you're almost an idiot if you didn't take the deals.

[637] So I think it's really important, extremely important for kind of law enforcement to play a role, regulation to play a role to make it harder to commit those crimes.

[638] And if you commit those crimes, there's actual real world punishment for it.

[639] To your point about, like, what's going to happen to the investors?

[640] I think that was kind of your question.

[641] It's tough because if the money's not there, the money's not there.

[642] I mean, there's going to be the guy, they got the best in class guy.

[643] It's the guy who ran the dissolving of Enron.

[644] So, I mean, I can't imagine someone better equipped to run a complicated corporate fraud, like, dissolution.

[645] But, yeah, it's tough because everyone's going to get probably, I don't know, 10 cents on the dollar, maybe less.

[646] I wonder if there's a way to do a progressive redistribution of funds.

[647] So I'm just really worried about the pain that small investors feel.

[648] I think, yeah, I think there's a lot of thought around that.

[649] I forget if they actually do do this.

[650] I mean, I know there's a lot of law about like you can't treat creditors differently.

[651] You have to treat them all the same.

[652] So I think it'll be some kind of proportionate.

[653] payback.

[654] It's certainly not going to be that the guys at the top get, you know, a significant amount of their money back and the rest get nothing.

[655] Unfortunately, I think there's such a small amount of assets that backed this whole thing in the end.

[656] And that value is actually declining every day because it was inextricably tied to FSBF.

[657] It was like the FTT tokens, which now what are those worth?

[658] The serum tokens.

[659] That was his project or the project they made.

[660] What is that worth?

[661] Basically nothing.

[662] So, you know, it's a very, it's a hard situation.

[663] And, you know, there's a bigger ethical concern, which is FTX U .S. It's unclear how backed it was, but it was clearly more backed than FTX international.

[664] Do you take all that money and throw it into a big pot and give people money back?

[665] Or do you give the U .S. people back their amount of money, which is probably going to be significantly more, and leave everyone internationally out in the cold?

[666] And to add to that ethical issue.

[667] Let's say you're a liquidator and you're U .S.-based.

[668] There's a tremendous question, like legal questions about, you know, how do you ethically do that?

[669] It's not clear.

[670] There's a tremendous incentive to just favor the U .S. people over everyone else because it's our country, America, whatever.

[671] But I don't know if that's necessarily fair.

[672] It's really hard.

[673] It's like it's impossible.

[674] And some, I forget where you said this, but one of the, I mean, it probably permeates a lot of the investigations you do, which is this idea that it's really sad that the middle class in most situations like this get fucked over.

[675] So the IRS go after the middle class, then go after the rich, is basically everyone who doesn't have a lot of leverage in terms of lawyers, money get fucked over.

[676] Yes.

[677] And then they're the ones, like it's always the rich and powerful who get the favorable treatment as a like a microcosm of this funny story.

[678] So one of the big criticisms of crypto, and I think rightly so, is the irreversibility of the transactions.

[679] So if I accidentally send a transaction somewhere, it's gone, right?

[680] So crypto .com accidentally sent a lady $10 million.

[681] And now they want the money back and they're suing her.

[682] But the funny thing is, is if you are on crypto .com and you send, let's say I accidentally send you money and I come knocking on your door.

[683] Lex, I didn't mean to send you, you know, like a thousand dollars.

[684] I need my money back.

[685] Or if I go to crypto .com and I said, hey, I sent that to the wrong person.

[686] Can you reverse it?

[687] They'll say, screw off.

[688] No way.

[689] If I go to court, they'll kill me in court.

[690] Because they're going to go, look, this is how the blockchain works.

[691] But then they do it.

[692] They do the exact same thing.

[693] They send this lady $10 million.

[694] They're suing her.

[695] They're going to win.

[696] Now what's in court is not whether they get the money back.

[697] It's should she be liable for theft, I believe.

[698] So, and that's just another case of the same rules apply differently to different people, whether you have the money to back you or not.

[699] It's a very sad thing.

[700] And that's why I think people like, you need journalists fighting for the little person.

[701] We really need it.

[702] And it's kind of like this unfortunate thing where that's the most risky thing to do, like legally.

[703] You should not be doing that.

[704] But I think it's important to do.

[705] ethical thing.

[706] That's the right thing to do.

[707] What do you think about influencers and celebrities that supported FTX and SBF?

[708] Do they, should they be punished?

[709] Yeah, I think they should take a huge reputational hit.

[710] I mean, I think they should be embarrassed.

[711] I think they should be ashamed of themselves.

[712] But it was really hard to know, sorry to interrupt, for them to know.

[713] Like, for example, I think about this a lot.

[714] Yeah.

[715] It's like, who do I, because I don't investigate, you know, like, sponsored by Athletic Greens.

[716] Okay, it's a nutritional drink.

[717] Should I investigate them deeply?

[718] I don't know.

[719] You just kind of use reputational.

[720] Like, it seems to work for me. Should I, like, I think it really depends on, I think your credibility hit will depend on what domain you're an expert in.

[721] If you're sponsored by a robotics company, and you're an expert in robotics, if that company turns out to be a disaster and fraud, then you should have looked more deeply.

[722] We're talking mostly about, like, I hold Tom Brady a lot less accountable than financial advisors, financial influencers, because that is their world of expertise.

[723] And you treat their recommendation differently, proportionally to what you think their expertise is.

[724] So in some ways, I don't actually think, Tom Brady, I'm sure he reached a lot of people.

[725] I personally didn't feel it all moved by his recommendation because you know it's just money.

[726] But when you hear somebody who should be an expert in that thing, endorse a product in that space.

[727] You hold that, opinion to a higher standard and when they're completely cat is cataclysmically wrong it's going to be a different level of accountability and I think rightfully so when Jim Kramer was saying Bear Stearns is fine he made that terrible call with Bear Stearns in 2008 he was rightfully reamed for all of that even though it could be considered that like well you know did he have all the information maybe not but he's a financial advisor he does this for a living if you go on and you make a big call and you turn out to be wrong and people lose tons of money you are going to take a hit and I think rightfully so but no I don't think these people should go to jail or anything like that well it's such a complicated thing I mean I just feel it personally myself I get it but you still feel the burden of the fact that your opinion has influence I know it shouldn't I know Tom Brady's opinion on financial investment should not have influence but it does right that's just the reality of it right that's a real burden I didn't know anything about SBF or F -TX.

[728] It wasn't on my radar at all.

[729] But I could have seen myself, like, taking them on as a sponsor.

[730] I've seen a lot of people I respect.

[731] Sam Harris and others, like, talk with SBF.

[732] Like, he's doing good for the world.

[733] So I could see myself being hoodwinked, having not done research.

[734] And the same thing, it makes me wonder.

[735] Like, I don't want to become cynical, man. But it makes you wonder, who are the people in your life you trust that are, like, that could be the next SBAF or worse, big, powerful leaders, Hitler and all that kind of stuff.

[736] To what degree do you want to investigate?

[737] Do you want to hold their feet to the fire, see through their bullshit, call them on their bullshit?

[738] And also, as a friend, if you happen to be friends or have a connection, how to help them, not slip into the land of fraud.

[739] I don't know, all of that is just overwhelming.

[740] Yeah, I mean, we should be clear.

[741] like finance is sort of a special space where you're talking about people's money.

[742] You're not talking about whether someone takes a bad supplement or like a supplement that is just their $50 out, right?

[743] I think the scale of harm and therefore responsibility escalates depending on what field you're in.

[744] Just like I wouldn't hold Tom Brady as like if he gives a bad football opinion, right?

[745] And he should have known better.

[746] That is a different scale of harm than a doctor giving bad advice.

[747] Right?

[748] Like life, like he tells you a pill works and the pill kills you or something like that.

[749] There's just different levels of accountability depending on the field you're in and you have to be aware of it.

[750] Finance is an extreme, you have to be extremely conservative if you're going to give financial advice because you're playing with people's lives and you cannot play with them half hazardly.

[751] You cannot gamble with them.

[752] You cannot play with them on a bet because you're getting paid a lot of money.

[753] It's just the nature of the space.

[754] And so with the with the space comes the responsibility and the accountability.

[755] And the accountability.

[756] and I don't think you can get around that.

[757] Who was Dan Friedberg that you mentioned, some of these figures in the SBF around that are interesting to you?

[758] Super interesting kind of subject, because Dan Friedberg is the former General Counsel for Ultimate Bet.

[759] Ultimate Bet was a poker site where famously they got in a scandal because the owner, Russ Hamilton, was cheating with a little software piece of code.

[760] They called God Mode.

[761] God mode allowed you to see the guy across from you's hand.

[762] Obviously, you can imagine you can win pretty consistently if you know exactly what your opponent has.

[763] Very unethical.

[764] I should be clear that for some inexplicable reason, I don't think they were ever charged and convicted of a crime, but they were investigated by a gambling commission that found they made tens of millions of dollars this way.

[765] For sure.

[766] And Dan Friedberg is the general counsel.

[767] He's caught on a call basically conspiring with Russ to hide.

[768] this fraud.

[769] He's saying we should blame it on a, you know, a consultant third party.

[770] And Russ Hamilton famously says, you know, like, it was me. I did it.

[771] I don't want to give the money back.

[772] Find basically a way to get rid of this.

[773] So that's Dan Friedberg's big achievement.

[774] Like, that's what he's known for.

[775] He's most known for.

[776] And this is the guy they pick as their chief regulatory officer for FTX.

[777] Why do you hire somebody who, I get it, the not formally charged and convicted, investigated, there's all the, and there's tape out there.

[778] So I want to be clear about what's actually available evidence.

[779] But someone who's seemingly only achievement is hiding fraud, why do you hire that guy if the intention is not to hide fraud?

[780] So this is a question I put to, you know, Sam Bankman -Fried and his answer was, well, we have a lot of lawyers.

[781] And I said, well, it's your chief regulatory officer.

[782] He's like, well, it wasn't, we did regulate a lot.

[783] And it was just this big dance of, you know, basically, he's.

[784] done great work he's a great guy and i think that tells you everything you need to know and there's figures like that probably even at the lower levels like just infiltrate the entire organization was just like why yeah why wasn't there a cFA why why wasn't there anyone in that space who could seemingly be the eyes that goes holy whatever we need to we were in dangerous territory here right um so yeah it seems very deliberate i mean i talked to one ftx employee that they talked about, who's told me they talked about taking, I think it was taking FTX US public.

[785] And Sam was very against the idea.

[786] And the employee, in retrospect, speculated that it might have been because you'd face so much scrutiny, like regulation -wise.

[787] Like, you'd have to, you know, go through a lot like more thorough audits, all that kind of stuff.

[788] That basically he knew they would never pass.

[789] So, yeah, I mean, it's red flags all the way down with that guy.

[790] and you hope all of them get punished everyone who knew i mean i think for sure there are people at ftx who didn't know i think there are some people at alameda who didn't know but there's degrees sorry to interrupt but there's degrees of not knowing yes there's a looking away yes when you kind of know shady stuff that's still the same as knowing right that might be even worse well yeah like i was talking to one insider and we were talking about the insider trading they were telling me about this insider trading.

[791] And I said, do you think this was criminal?

[792] And they said, it was probably criminal in hindsight, yes.

[793] And the question is someone who answers a question like that, what does that like mean?

[794] You know, like it was probably criminal.

[795] So you're right.

[796] There are different degrees.

[797] I mean, I'll say at the most basic, I would be very happy if everyone who had direct knowledge went to jail, which I don't think will happen to be clear.

[798] I think a lot of people are going to deals.

[799] Prosecutors are going to cut deals so they actually nail Sam Bankman -Fried.

[800] I think that's their only focus.

[801] What about his reputation?

[802] What do you think about all these interviews?

[803] Do you think they are helping him?

[804] Do you think they're good for the world?

[805] Do you think they're bad for the world?

[806] Like, what's your sense?

[807] And like, say you get a sit -down interview with him for three hours and I'm holding the door close.

[808] What kind of, is that a useful conversation or not?

[809] Or at this point, it should be legal.

[810] and that's it I think it's useful I mean I think it's all about how you interview him you can interview someone responsibly you can interview him irresponsibly I think we've seen examples of both what's an irresponsible I keep interrupting you rudely That's okay No no no no I think it's fine There was like a New York Times interview Which spends an amount of time Any amount of time talking about his sleep And he's like yeah I'm sleeping great I mean I think that's so deeply disrespectful to the victims and especially when you're you're not even releasing an interview live it's like you have time to triage what you're going to talk about why would you spend any amount of time talking about the sleep that a fraudster is get get it's just so weird and well let's say can i steal man that case i don't i don't i don't think it turned out well i think that's i think okay here's the thing i could see myself talking about somebody's sleep or getting in somebody's mind And if I knew I have unlimited time with them.

[811] If I knew I had like four hours.

[812] Because you get into the mind, the person, how they think, how they see the world.

[813] Because I think that ultimately reveals, if they're actually really good at lying, it reveals the depths, the complexity of the mind that through like osmoses you get to understand, like this person, this person is not as trivial as you realize.

[814] Also it makes you maybe realize that this person has a lot of hope, has a lot of positive.

[815] ambition that's like uh that has developed over their life and then certain interesting ways things went wrong yeah become corrupt and all that kind of stuff you just that's all fine but this was this conversation was not properly contextualized yes in the world of what he did it and i you know i've i've asked about this interview because i was like so curious it was out of the new york times and there was not much mention of fraud or jail or the big crimes like misappropriation of even client assets, it was just sort of this, you know, Sam sat down with me. He's, he's under investigation, but there's not much specifics.

[816] And then it's like, yeah, he's playing storybook brawl.

[817] He's sleeping.

[818] He's, and it's just like, okay, this isn't adding to the conversation, especially in the New York Times.

[819] It's like, you should be grilling.

[820] Right, right, exactly.

[821] So, but as I've said, I mean, it's all arranged the gamut.

[822] And some interviews, like, some of it's okay and then some of it's weird, like the Andrew Sorkin interview, he asked some.

[823] hard -hitting questions, which I really appreciated.

[824] And then at the end, he goes, ladies and gentlemen, Sam Bainte, and everyone gives like an ovation for Sam.

[825] I mean, the steel man of that, of course, is like, they're actually applauding Andrew Sorkin.

[826] But the way you, like, lay it up, I wouldn't go, like, ladies and gentlemen, it's like an applause line.

[827] It's like, ladies and gentlemen, the Eagles, Elton John, Lex Friedman.

[828] And so to go to, so you have this, like, deal book summit where you have all these important figures that are positively important.

[829] And at the end, you have, have Sam Bankman -Fried a fraudster and you know ladies and gentlemen Sam Bankman -Fried everyone's applauding that I think is a net like I think that's a negative I think the way that the optics of that just were all wrong yeah and so I think yeah you have to be very responsible I think it's useful going back to how you can usefully do this you can even when somebody's determined to lie to you it's always important to pin them down to a an accounting of events because that is unimaginably helpful when it comes to a prosecutor trying to prove this guy's guilty, is if you say you didn't do a crime, but you don't tell me any details about it, day of the trial, you can basically make up any story, right?

[830] But if you tell me in detail where you were that day, I can go hunt down, you say you were with Joe.

[831] I go hunt down Joe and he says he wasn't with you.

[832] Boom, you've lost credibility.

[833] And now you're much more likely to be convicted.

[834] So it's really important to get SBF's exact accounting of how things went wrong because right now he's positioning himself to throw his Alameda CEO Caroline Ellison under the bus.

[835] details of where he was, what he was thinking, what the...

[836] I think it's like, yeah, I think it's, I think the public probably cares to get to know what happened to.

[837] And again, I think if you're, if you're careful, you can expose someone for as they lie to you without giving into those lies, right?

[838] Like, without capitulating to, oh, I'm just going to assume you're correct.

[839] I think you can point to, well, Lex, you say it happened this way, but you've lied about X, Y, and Z. Why should we believe you?

[840] That's a suddenly a totally different conversation than just being like oh okay that's how it happened the thing i caught that bothered me and the thing i hope to do in interviews if um if if i eventually get good at this thing is the human aspect of it which is like which i think you have to do in person is he seems a bit nonchalant about the pain and the suffering of people that i have red flags about in the way he's he communicates about the loss of money, like the pain that people are feeling about the money, I get red flags.

[841] Like, you're not, forget if you're involved in that pain or not.

[842] You're not feeling that pain.

[843] Well, he'll say he is, but he'll be playing a game of League of Legends while doing it.

[844] No, but I just see it from his faith.

[845] I know, I know.

[846] And that thing needs to be grilled.

[847] Yeah.

[848] Like that little human dance there.

[849] That's, I mean, I considered, I talked to him.

[850] I consider doing an in -person interview with him.

[851] Are you still considering it?

[852] I don't know.

[853] Do you think I should in person?

[854] I think it depends if you think you have anything to add to the conversation.

[855] A lot of people have...

[856] Yeah, this has been already...

[857] You did an incredible job.

[858] Thanks.

[859] I think...

[860] I think I would like to grill the shit out of him as a fellow human.

[861] Yeah.

[862] But not investigative.

[863] No, no. Coffee's ill investigator?

[864] Yeah, yeah, yeah.

[865] Like another.

[866] human being another human being who I can have compassion for who has caused a lot of suffering in the world like that that grilling like basically convey the anger that people and the pain that people are feeling right like that yeah I think I think it'd be really hard I mean like that guy is sort of a master dancer and what he would say at the end of it because I've listen to so many interviews of him.

[867] I probably am like a GPT model for Sam.

[868] I think he would do some kind of thing about like, yeah, I really, I really hear you.

[869] And, you know, it's, it's just terrible.

[870] I feel such an obligation to the people who've lost money.

[871] And, you know, it's just, it's a lot of money.

[872] It's a lot of money.

[873] You know, he'd do something like that.

[874] And it would be very superficially like, okay.

[875] But when you drill down to the details of what he did, it's just impossible that he didn't know.

[876] And one of the things that I wish I had asked, maybe I can talk about like, I wish I had gone on this.

[877] It's just so hard when you're doing a live interview to kind of focus on one thing.

[878] Everyone's asked about the terms of service.

[879] So in the terms of service, there was like, we can't touch your funds.

[880] Your funds are safe.

[881] We're never going to do anything with that.

[882] Anytime anyone brings that up, he says, oh, well, there's this other terms of service over here with margin trading accounts.

[883] Remember, we talked about it.

[884] It's a derivatives platform.

[885] If you're in our derivative side, you're subject to different terms.

[886] of service, which kind of lets us move your money around with everyone else.

[887] Okay?

[888] So we treat it as one big pool of funds.

[889] And that's sort of the explanation of how this all happened is we had this huge leverage position and we lost everything.

[890] But what no one has sort of done a good enough job getting to the heart of is that this pool of funds never was segregated properly.

[891] It was all treated under the same umbrella of we can use your funds.

[892] There was no amount of we have the client deposits, which were just deposited with us and not like you.

[893] used to margin trade or do anything over here.

[894] These funds over here, we have saved.

[895] They didn't.

[896] Fundamentally, they lied from the get -go about how they were treating the most precious assets, which is your customer deposits that you said you didn't invest.

[897] Clearly, you put them all over here.

[898] You YOLO gambled them.

[899] And then when everyone starts withdrawing from here, they don't have any money over here.

[900] So that is like one of the most fundamental things that I haven't seen anyone grill him on.

[901] And the next time, if I get the chance to ambush him again, that's what I'm going to drill down on because it's impossible for that not to be fraud.

[902] There's no world where you had a pool of funds over here and now you don't have them without you somehow borrowing over here.

[903] Because if you deposited one Bitcoin and I never sold that Bitcoin, and it's earmarked, Lex Friedman, and you come and it's not there, something had to happen, right?

[904] well so this is so interesting so for me the approach that like you said the most important question of uh because for you it's like were those funds segregated for me the question is as a human being how would you feel if you're observing that so like you know that like marshmallow tests with the babies like it's the human thing this is the human nature question like uh i can understand there's a pile of money, and you, the good faith interpretation is like, well, I know what to do with that pile of money, to grow that pile of money.

[905] Let me just take a little bit of that.

[906] Like, how willing are you to do that kind of thing?

[907] How able are you to do that kind of thing?

[908] And when shit goes wrong, what goes through your mind?

[909] How does it become corrupted?

[910] How do you begin to delude yourself?

[911] How do you delegate responsibility for the failures?

[912] Like, as opposed to getting facts, try to sneak into the human mind of a person when they're thinking of that.

[913] Because the facts, they're going to start waffling.

[914] They're going to start, like, trying to make sure they don't say anything, they get them incriminated.

[915] Right.

[916] But I just, I want to understand the human being there because I think that indirectly gives you a sense of where were you in this big picture?

[917] I think, I've talked to so many people who have sort of committed some range of, like, outright fraud to like misleading marketing, no one thinks they're a bad person.

[918] Nobody admits that they did it and they knew they, or almost nobody does.

[919] There's actually one funny exception.

[920] But I had a guy who admitted like, yeah, I did it.

[921] It was wrong.

[922] And, you know, but I did and I wanted the money, which was kind of like almost refreshing in its honesty.

[923] But the reason I focus on like the facts is because unless you find a bright red line, humans can rationalize anything.

[924] I can rationalize any level of like, well, I did this because I had the best of intentions.

[925] And if you play the intention game, you'll never convict anyone because everyone has good intentions.

[926] Everyone's honest.

[927] Everyone's doing the best they can and got misleaded and got misguided and da -da -da -da.

[928] Ultimately, you have to drill down to the concrete and go look.

[929] I get it.

[930] You're just like the last 50 guys that I interviewed.

[931] You had the best of intentions.

[932] It all went wrong.

[933] I'm very sorry for you.

[934] But at the end of the day, there's people hurting and there's people that have significant damage to their life because of you.

[935] What did you actually do?

[936] And what can we prove taking intention out of it, taking motivation out?

[937] What can we prove that you did that was unethical, illegal, or immoral?

[938] And like that is sort of what usually I try to go to because I will do those human interviews, but, you know, It's just like, it's like the same record on repeat.

[939] I mean, a lot of people go to the same.

[940] I'm with you.

[941] I'm with you on everything you said, but there is ways to do to avoid the record on repeat.

[942] I mean, those are different skill set.

[943] You're exceptionally good at the investigative, like investigating.

[944] I do believe there's a way to break through the repeat.

[945] There's the different techniques to it.

[946] Yeah.

[947] One of which is like taking outside of their particular story.

[948] Yes, when everyone looks at their own story, they can see themselves as a good player doing good but you can do other thought experiments i mean there's uh but they'll follow you they'll know what the thought experiment is no well it depends it depends my friend i mean the like uh you know to me there there's a million of them but of just exploring your ethics would you kill somebody to protect your family and you explore that you start to sneak into like what's your sense uh of the in -group versus the out -group, how much damage you can do to the out -group, and who is the out -group?

[949] And you start to build that sense of the person.

[950] Are we like the two mobsters that were dressed as?

[951] Do we protect the family and fuck everyone else?

[952] You're with us and the ones who are against us, fuck them.

[953] Or do we have a sense that human beings that all have value, equal value, and we want to, we're a joint humanity?

[954] There's ways to get to that.

[955] And you start to build up this sense of like, Some people that make a lot of money are better than others.

[956] They deserve to be at the top.

[957] If you have that feeling, you start to get a sense of like, yeah, the poor people are the dumbasses.

[958] They're the idiots.

[959] If you believe that, then you start to understand that this person may have been at the core of this whole corrupt organization.

[960] Yes, two things.

[961] One, I think you should join me on this side of the table.

[962] We'll put SBF over here.

[963] Well, good guy, bad guy, human facts.

[964] You're the bad guy.

[965] No, no, no, no, slow down coffee.

[966] What is your feeling about humanity?

[967] Have you been getting enough sleep?

[968] Yeah, right.

[969] So I think, no, I think there's a lot of truth to what you said.

[970] One thing I've noticed that is hard to combat is sort of like preference falsification and just like, just the outright lying about those things is tough to kind of pin down.

[971] But yeah, you're absolutely right.

[972] There's ways to interview people.

[973] There's all sorts of interesting techniques.

[974] And yeah, I don't disagree.

[975] Good, good cop, bad cop.

[976] We should do this.

[977] It should be like a sitcom.

[978] Okay.

[979] You did an incredible documentary on Safe Moon.

[980] The title is I uncovered a billion dollar fraud.

[981] Can you tell me the story of Safe Moon?

[982] Sure.

[983] So Safe Moon was a crypto coin that exploded on the scene in 2021, I think, at this point.

[984] Sorry, I'm losing track of my years.

[985] One year in crypto is like five years in real life.

[986] life, but it kind of gained a huge amount of popularity because of this idea that it's in the name.

[987] You go safely to the moon.

[988] How they were going to do this is with sort of a sophisticated smart contract idea where there's, I kind of have to explain the way some contracts get rug pulled for a second or there's scams happen.

[989] So in the, sometimes it's called like the shit coin space, the alt coin space, anything like below Bitcoin Ethereum and maybe the top five or ten is kind of seen as this wasteland of gambling and like you know you don't know if the developers are going to become anything or not you're kind of like reading the white paper trying to figure it out so there's this big question about like how can you get scammed how can back to the interests you don't want the developer to have some like parachute cord where they can pull all the money out so one way this happens is that in decentralized decentralized finance there's something called the liquidity pool.

[990] It's basically this big pot of money that allows people to trade between two different currencies.

[991] So let's say like Safe Moon and Bitcoin, right?

[992] Or Ethereum, or it's actually on the Binance smart chain.

[993] So it'd be B &B.

[994] And this pool of money can be controlled by the developers in such a way they can steal it all, right?

[995] They can just grab it.

[996] I don't want to go too much into details because I feel like I'll lose people here.

[997] But the point of Safe Moon was, the core idea was we're locking this money up.

[998] You can't touch it.

[999] And actually, every transaction that you buy Safe Moon with will take a 5 % tax of that.

[1000] We'll do a 10 % tax, but 5 % of it will go back to all the holders of Safeman.

[1001] Okay.

[1002] And 5 % of it will go back into this little pool of money.

[1003] Okay.

[1004] So the idea is as you trade, as this token becomes more viral, two things will happen.

[1005] one, the people who are holding it long term will be rewarded for holding it long term by receiving this 5 % tax that's distributed to everyone.

[1006] And two, you can kind of trust that your money's going to have this stable value because this pool of money here in the middle that's kind of guaranteeing you can get your safe moon out into this actually valuable currency.

[1007] It's not going to move.

[1008] So the story of safe moon was that fundamentally this was not the case.

[1009] They promised that this money was going to be locked up.

[1010] It was not actually locked up at all.

[1011] They said it was automatically locked up.

[1012] You don't have to worry about it.

[1013] Well, it was very manually locked up, and they didn't actually lock a lot of it up.

[1014] They took a lot of it for themselves, for the developers.

[1015] So there's a lot of players in this.

[1016] Some of the, a lot of them have left by now.

[1017] There's kind of this main CEO that everyone knows John Caroni now.

[1018] And, you know, despite saying that they were going to lock up all the funds for four years, somehow he's gone from, as everyone else in the token has lost 99 % of the value of the token.

[1019] So they've lost 99%.

[1020] He's gotten a $6 million crypto portfolio, multimillion dollar real estate portfolio, invested millions into various companies.

[1021] So he's accrued this huge wealth.

[1022] And so I made a video basically exposing that and showing how this coin, which once had a $4 billion market cap, is just viral everywhere.

[1023] Everyone was talking about it.

[1024] Because of these viral ideas, like it is sort of a captivating idea.

[1025] that by holding it, you could get returns, right?

[1026] Like, you just hold on to it.

[1027] You automatically get money.

[1028] And it's a viral idea that this money in the middle in the pot isn't going to leave you.

[1029] When those things turned out to be false, this community has had a slow death, as a lot of people realized it was a scam.

[1030] And there's been a core part of the community, which gets to an interesting dynamic we can talk about if you want to, where they have like doubled down on the belief in Corona.

[1031] And so part of it was out of a hope to let those people know what was really going on in their coin and like hopefully save some of them um not in like some altruistic sense but like or not in like some like i'm like a hero sense but in the sense of um like i think a lot of them didn't know like literally didn't know so just sort of like as a public service letting them know so they could get their money out and hopefully save themselves a lot of pain and suffering so yeah so they really dug in so some did some did some left i mean a lot of people have left, but the people who are left are people with large amounts of safe moon holdings that are down immensely.

[1032] And you can imagine at a certain point in losses, there's a tremendous psychological pressure to go, look, I'm in it.

[1033] I got to go for the long haul.

[1034] And then you want to believe that this thing is legitimate and will succeed because, A, there's an ego component around I haven't been scammed.

[1035] I'm too smart to get scammed.

[1036] it's tremendously, you know, it hurts psychologically to acknowledge you've been taken for a ride.

[1037] And also, you just want this thing to succeed for your financial well -being.

[1038] So you, like, want to believe it.

[1039] So there's tremendous psychological pressure to build cult -like communities around these tokens.

[1040] And I've noticed with the incentive of, like, community built, it's sort of new to finance.

[1041] There's like these meme coins or these cults.

[1042] I don't want to, it's not really fair to call all of them Colts, like some of them are open to criticism.

[1043] But one of the things that defines Colts is they're not open to sunlight or criticism.

[1044] There's these financial communities that are opening up with crypto, with a few stocks, where if you criticize them, you are attacked.

[1045] And the entire community has every incentive to kind of like downplay your legitimate criticisms or kind of go after you.

[1046] And so it creates this interesting dynamic that I'm fascinated by.

[1047] What do you think about it's Bitcoin then.

[1048] Do you think it's one of those communities that does attack you when criticized?

[1049] So which, I guess, which coins do you think are open to criticism and which are not?

[1050] It's kind of tough.

[1051] Like, no community is a monolith.

[1052] So just like, it's just a spectrum of how open they are.

[1053] There's just like, there's always this core contingent of extreme believers who will go after anyone who criticizes them.

[1054] And it's just about how why.

[1055] of a band that makes up of the entire token.

[1056] How intensely, how active that small community is.

[1057] So in Bitcoin, they're called Bitcoin maximalists.

[1058] Yes.

[1059] But you can also call any community's subgroup like that maximalist, whatever the belief is.

[1060] I don't know.

[1061] Dunkin Don't as maximalists.

[1062] That community is probably small in terms of attack you online.

[1063] You know which community has a very intense following?

[1064] So I got attacked on the interest.

[1065] internet, when I said Messi's better than Ronaldo.

[1066] Oh, yeah.

[1067] That's controversial.

[1068] And so that's a very intense maximumist community there.

[1069] The other one that surprised me is when I said, now, I did it in jest.

[1070] Okay, folks, I said EMAX is a better ID than VIM.

[1071] I love EMAX.

[1072] I agree.

[1073] Listen, I have trauma.

[1074] I wake up sweating sometimes at night thinking, EMAX Master is.

[1075] The VIM, the VIM people are after me. They're everywhere.

[1076] They're in the shadows.

[1077] No, Vim isn't amazing.

[1078] And it's actually surprised.

[1079] I've recently learned that it's still even more so than before, an incredibly active community.

[1080] So a lot of people wrote.

[1081] But do you use SpaceMax?

[1082] It's just EMAX and Vim?

[1083] No, I haven't.

[1084] I use raw.

[1085] Old school EMAC?

[1086] But, hold on a second.

[1087] I actually recently, I have recently said, you know what?

[1088] Let's make love, not war.

[1089] and I went to VES code.

[1090] I went to a more modern ID.

[1091] Because I did most of my programming in Emacs.

[1092] I did most of anything as one does in Emacs just because I also love LISP so I can customize everything.

[1093] Then I realized like how long will Vim and Emacs be around really?

[1094] I was thinking as a programmer looking like 10, 20 years out, you know, I should challenge myself to learn new IDs, to learn the, the new tools that the majority of the community is using so that I can understand what the benefits and the cost.

[1095] I found myself getting a little too comfortable with the tools that I grew up with.

[1096] I think one of the fundamental ways of being as a programmer, as anyone involved with technology, based on how quickly it's evolving, is to keep learning new tools.

[1097] Like the way of life should be constantly learning.

[1098] You're not a mathematician or a physicist or any of those disciplines that are more stable.

[1099] This is like everything is changing.

[1100] Cryptos, like you said, a perfect example of that you have to constantly update your understanding of the of of digital finance constantly in order to be able to function in order to be able to criticize it in order to be able to know what to invest in so yeah that that was why i did uh i tried pari charm a bunch uh the whole jet brains uh infrastructure and then also vs code because that's really popular and you know adam and um sublime all of those I've been exploring.

[1101] I've been exploring.

[1102] But the S code is amazing.

[1103] You should check out SpaceMax.

[1104] I'm just going to give one more pitch for it.

[1105] It's just basically like a customizable, customizable configuration.

[1106] Well, Emacs is already customizable, but it's pretty useful.

[1107] I'm not even much of a coder, but for like certain journaling applications or like time management, like I find it really useful.

[1108] But anyway, we're so like, I feel like half this podcast is what it should have been.

[1109] And half of it's just us nerding out about our own.

[1110] engineering like idiosyncrasies.

[1111] Sorry, sorry, sorry, guys.

[1112] All right.

[1113] So what were we talking about?

[1114] Safe Moon and Bitcoin, Bitcoin.

[1115] What do you think?

[1116] Is there, have you made enemies in certain communities?

[1117] What do you think about Bitcoin?

[1118] So I've made certain enemies in the sort of crypto skeptics space, because there's sort of this range of skepticism you can have about cryptocurrency.

[1119] I'm obviously a skeptic of a lot of it.

[1120] But there are certain aspects of crypto that I think are inevitable, and I'm going to do my best to kind of describe those here.

[1121] But I'm not committed to any crypto specifically, but there are some, I've taken a lot of heat, ironically, for not being skeptical enough.

[1122] There's some people who believe that, like, the entire thing is a complete waste of time.

[1123] They're, uh, R slash butcoin on Reddit.

[1124] It's an amazing community, actually.

[1125] It's very funny.

[1126] They have, what's a buck.

[1127] It's like, it's like a play on Bitcoin.

[1128] They're like, oh, they're just like, at least we admit it's a. scam.

[1129] Very funny guys.

[1130] Very funny people there.

[1131] So, but they like, but they'll, they'll be like, you know, coffee Zalish should just admit that all of it's a giant Ponzi scheme.

[1132] All of it's a basically like not real.

[1133] So everything including Bitcoin?

[1134] Yeah, it's all, it's all basically all the Ponziomics.

[1135] It's all, it's, it's, it's Ponziomics all the way down.

[1136] It's like there is no fundamental use case that, uh, is that useful.

[1137] I don't know if I guess I don't want to straw man them here.

[1138] I don't want to say that, I don't know if they're saying that it's all useful.

[1139] at minimum, they're saying the level of interest in cryptocurrencies is far, the actual usefulness of it is far less than the amount of attention and time and money that's being poured into it.

[1140] So like the revolutionariness of this technology is not at all revolutionary.

[1141] Let me kind of steal man what I think the pro -crypto take is.

[1142] I think that technologies are sort of this inert thing.

[1143] and the success of them, in my opinion, is not based on PR, it's not based on marketing, it's based on cheaper, faster, better, fundamentally.

[1144] The success of any technology relies on those three things and longevity of it.

[1145] So I have two employees, and both of them are out of the country.

[1146] So I have to frequently make international wire payments to them.

[1147] Is one of them SBF just, as a reporter, I have to ask?

[1148] No. Okay.

[1149] All right.

[1150] He's not in the payroll.

[1151] Yeah, I think you'd have to pay me. I'm trying to do my best coffee zill awards.

[1152] Like, in hard -hitting, investigative questions.

[1153] So with these international payments, you face all sorts of slow fees, and you face kind of like this time thing.

[1154] And it's this painful process.

[1155] So if I use different cryptocurrencies, some of them are like really fast, some of them have really low fees.

[1156] I just believe in a world where digital currencies with fast payments, with cheap payments, revolutionize the global exchange of currency.

[1157] And I don't know if this is going to include the blockchain.

[1158] It's just that the blockchain is the first thing that's really embraced truly digital currency, which doesn't need to go through this complicated system of wire transfers and just happens.

[1159] So I can send you, let's say I want to send you Ethereum or Bitcoin, I can send it to you as fast if I send you a dollar or a billion dollars, and I can send it to you just as fast if you're across from me or if you're across the world for me. That I think is a step change and easier, faster, better, in terms of like just this really basic international payments kind of idea.

[1160] So I think at like its core, if the lowest form use case of cryptocurrencies is that, I think it will change the world in some variety.

[1161] It's just kind of the larger question is, is that technology going to include the blockchain specifically or not?

[1162] The other benefit is transparency, which I personally like as an investigator.

[1163] It's just that previously, it's like hard to describe how opaque our financial system is until you've tried to investigate someone or something.

[1164] understanding finances, unless you have a subpoena, unless you're like the FBI or like the SEC and you can get a subpoena for someone's finances or you're going through discovery, you don't know what someone has.

[1165] You're basically playing poker with everyone and the cards are face down.

[1166] For the first time, the blockchain to some extent, because there are ways to obfuscate it, and in some ways cryptocurrency has enabled more fraud, which is kind of this irony.

[1167] But in some ways, it's enabled people to also audit a lot better and in real time.

[1168] And I think that is a structural change that is fundamentally for the better.

[1169] The question of all this is do those betters outweigh the cons that this introduces and how much can those can regulation mitigate those cons?

[1170] Some of those cons being like fraud, money laundering, all these negative externalities that are easier with cryptocurrency.

[1171] Why do you think cryptocurrency in particular seems to attract fraudulent people?

[1172] like scammers and frosters and...

[1173] Because it's unregulated, it's the Wild West, and you can transmit large amounts of money very quickly across the world.

[1174] What about...

[1175] With very little oversight.

[1176] Creating new crypto projects, like new coins.

[1177] Because you have to show very little actual use case.

[1178] You can just promise.

[1179] So it's like true of any emerging technology, so much vaporware happens at the beginning when it's all promise.

[1180] Because fundamentally, let's say you're legitimate, I'm illegitimate.

[1181] We look the same at the start of a technology.

[1182] Because both of us are promising what this can do.

[1183] And in fact, the less scruples and morals I have, in some ways, I can out -compete you.

[1184] Because I can say, mine does what Lexus does, but like way better and way faster and it's going to happen in a year rather than 10 years.

[1185] You're being honest.

[1186] I'm playing a dishonest game.

[1187] I look better.

[1188] Once this space matures and you actually have some people actually doing the things that they say they're going to do, suddenly this equation changes.

[1189] Now, your Amazon, you're delivering in two days.

[1190] I can say whatever I want.

[1191] You do the thing you do, and I have no credibility.

[1192] So I think the, like, part of, part of the fraud is, you know, just the ability to transmit so much money so quickly with such little oversight.

[1193] Part of it is like, this just happens with any emergent technology.

[1194] Faperware is a real thing.

[1195] And hopefully, as this space matures, as regulation comes in, things will improve.

[1196] Let me ask you your own psychology.

[1197] Sure.

[1198] You're going after some of the richest, some of the most powerful people in the world.

[1199] Do you worry about your own financial, legal, and psychological well -being?

[1200] Yes.

[1201] Yeah, I do.

[1202] I mean, I'm not totally oblivious to the precariousness of, like, any kind of journalism like this.

[1203] Obviously, there's risks.

[1204] I've always believed there's a quote, and I'm going to butcher it, but I hope you guys understand the spirit of it.

[1205] You know, news is when you print something.

[1206] Someone else doesn't want you to print everything else is public relations.

[1207] I really believe to do meaningful journalism, you have to go after people.

[1208] Like, it's not inherently a safe profession.

[1209] I mean, if you're going to do important work, you have to have risk tolerances.

[1210] And I think everyone has a line of what that risk tolerance is, and it's different for everyone.

[1211] I don't think I could do what Edward Snowden did.

[1212] I think that would be my bright red line, is going against my own government.

[1213] It's such a, in my opinion, I really see him as a hero.

[1214] like it's such a selfless act of self -destruction.

[1215] You know that the party you're going after has all the power and will crush you.

[1216] And you do it anyway out of the like the true, I don't know, platonic ideal of journalism.

[1217] I think that's beautiful.

[1218] I don't think I could do that.

[1219] I think I need some ability to live and subsist in the society that I am in.

[1220] And I think my bright red line would be like if I'm forced to flee the country for my work, I think I'd finally have to say no. But as journalists go, I'm pretty risk.

[1221] I take risk pretty well.

[1222] I especially think risk is important to take when you're young and when you can do that.

[1223] I think when I have, I mean, I'm married.

[1224] So when I have a family, I think I will probably dial this risk thing down.

[1225] Just being honest.

[1226] I mean, I think you kind of have to.

[1227] But right now, I mean, I'm kind of like running on all cylinders.

[1228] I'm willing to take on quite a. quite a range of people but um well you're also a lot about it wolf pack of one or small yeah wolf pack as opposed to having like a new york times behind you or a huge organizations with lawyers with a team with a history with these people are less courageous this is the this is the dirty truth the bigger the organization the more conservative a lot of them are it's true that sometimes they like and this is not to bash big organizations i'm just saying this as an observation of someone who's talked to a lot of people.

[1229] And especially in the world of fraud, a lot of them are scared to engage in fraud that is obvious but hasn't been litigated yet.

[1230] This is why you'll never see documentaries about ongoing fraud on Netflix.

[1231] It's too much of a liability.

[1232] They'll sue Netflix to hell.

[1233] And they know that if they win, Netflix has the money to pay it.

[1234] So corporations like the New York Times, you know, a lot of these, some of them are very, like they're as courageous as they can be.

[1235] But at the bottom line, if someone sues you to hell and back and you have to pay up, you will disappear.

[1236] And you're relying on liability insurance, which you're already paying out the ass for, to try to cover you if you get sued.

[1237] But if you get sued, even if you win, that liability insurance now goes up in price the next year.

[1238] And if you're the New York Times, it goes up by a lot.

[1239] So, I mean, I think there's work that independent journalists can do uniquely that they can actually take like in some ways more risk than a giant institution which has a lot more in my sense to lose even though it would appear like they have more in terms of defense too but you get uh you can be bullied legally yeah do you get afraid of that sure i mean i just uh all these things are things you have to be aware of and then forget to do your job like you have to be you know it's like it's like being like a snowboarder and it's like do you realize you could hit your head?

[1240] And it's like, yeah, of course.

[1241] But in order to go do the, like the flip or whatever, you have to just accept the risk, mitigate the risk as much as possible and move on.

[1242] So we have, um, we have like insurance.

[1243] We keep like a pool of funds for that kind of thing.

[1244] Like I'm very conservative with how I, I spend my money basically all on production and like trying to make my life as secure as I can.

[1245] And then I just do the work that I, you know, I, I, I want to do because so 99 % of your fund goes into the in the studio into the studio and then into that elaborate space of yours yeah of course um how many kittens had to die to manufacture that studio but anyway that's that's my investigation for later um what what keeps you mentally strong through all of this what's your source of mental like strength of your psychological strength through this?

[1246] I think there was a time when I was getting a lot of cease and assists.

[1247] Some people were actually like saying like they're going to show up to my house, all that kind of stuff.

[1248] I don't think I was that.

[1249] I think I was pretty worried about that for a while.

[1250] My wife was a huge source of strength here where she was like, hey, if you're not comfortable with it, you need to get out of the game or you need to basically like suck it up and like this is what it is.

[1251] If you're going to go after these people, you have to basically be mentally strong around this.

[1252] And seeing her have that realization helped me have the same realization.

[1253] And I really deeply admire and respect that about her.

[1254] And it solved a lot of my concerns around that.

[1255] It's just, it just made me realize every profession has risks.

[1256] It is what it is.

[1257] You mitigate and then you move on.

[1258] Why do you think there's so few journalists like you.

[1259] You're basically the embodiment, at least in the space you operate, of what great journalism should be.

[1260] Why do you think there's very few like you?

[1261] That's such an enormous compliment and probably overstatement.

[1262] But I first want to pay respect.

[1263] There are a lot of great journalists, and a lot of them are like, I don't want to just kind of take it and go, yeah, you know, it's just me. There's so many great journalists.

[1264] Matt Levine, Kelsey Piper, you know, you've got anonymous journalists like Dirty Bubble, you've got citizen journalists like Tiffany Fong, but I think if you're going to be in the space in the long term, you do need to accept certain risks.

[1265] And I think in the long term, it's like, I don't know how easy it is to play that game for a long period of time.

[1266] Because you make, to do great journalism, you don't get paid a lot.

[1267] compared to what you could get paid if you did press pieces or anything like that you take a lot of risks legally you take physical risks you take it's just like if you care about money it's not the profession and i feel like a lot of people when they get notoriety they move to like well i can just maximize the money security side of things and i think it takes out a lot of would -be great journalists.

[1268] And also, so first of all, comfort of a physical and mental well -being.

[1269] Yes.

[1270] And also being invited to parties with powerful people.

[1271] Uh, you, um, you make enemies, rich and powerful enemies doing this.

[1272] Yes.

[1273] But that's why it makes it, that's why it's admirable.

[1274] I mean, you know, uh, it's, it's an interesting case study that you've been doing it as long as you have.

[1275] And I hope you keep doing it.

[1276] But it's just interesting that it's rare.

[1277] I'll say, I want to make a call.

[1278] Like, I think societies can create better journalists and worse journalists insofar as they support the journalists who are doing great work.

[1279] And I want to call out Edward Snowden specifically because what we have done to him is such a travesty.

[1280] And the only lesson you can learn if you're a logical human being is that, that you should never whistleblow on the United States government after looking at what they did to Snowden.

[1281] So as a society, we can put pressure on lawmakers to make it easier for people to do the great work by not punishing the people who do great work, if that makes sense, and de -risking it for them.

[1282] Because we shouldn't expect journalists to be martyrs to do great work, right, to do important work.

[1283] And part of that comes from protecting whistleblowers.

[1284] There's like very common -sense things.

[1285] I love, like, it's great to heroize, you know, people like Edward Snowden and stuff like that, but we shouldn't expect them to be heroes to do that work.

[1286] Do you ever think about going, you've been focused on financial fraud?

[1287] Mm -hmm.

[1288] Do you ever think about going after other centers of power?

[1289] Like government, politics?

[1290] Politics, it seems to me you can't do good work.

[1291] like everybody doing good work in politics is to some extent, from my limited perspective, as I said, I'm not that into it.

[1292] It seems like everyone has to take a side because even if you do great work, whoever you're exposing, half the other people, no matter how good your work is, are going to claim it's just for partisan hackery and they're going to malign you.

[1293] So it seems like a lot of journalists have to take a slant, even if it's not explicit like bias.

[1294] They have to take a slant on who they expose.

[1295] I hate that.

[1296] I would really like a world where you could freely expose both sides without having a constant malignment of like, you know, who are you working for or you did this for X, Y, Z, or whatever.

[1297] Like, I really find that deeply problematic about our current, like, journalism in the political sphere.

[1298] As far as government stuff, I think it's easy to do, not easy, but, like, it's, much more enticing to do foreign journalism than to do local journalism on positions of power.

[1299] Because if you question, it's so easy to just get, the bigger cases you expose locally, you get in danger.

[1300] It's just like very clear cut.

[1301] The bigger the case, the more your financial well -being, your access, your entire life is like sort of in jeopardy.

[1302] Whereas if you do foreign journalism, you can do great work.

[1303] largely you're protected by your own government so it's kind of this weird thing where if you want great journalism on america sometimes going abroad might be but the politician thing that's interesting you mentioned that and going abroad i think the way you think about your current work i think applies in great journalism in in politics as well so what happens i i have that sense because i aspire to be like you in the in the sort of in the conversation space of like uh with with politicians, I tried to talk to people on the left and the right and do so in nonpartisan way and criticize, but also steal them in their cases.

[1304] What happens I've learned is when you talk to somebody on the right, the right kind of brings you in.

[1305] It's like, yes, we'll keep you comfortable.

[1306] Come with us.

[1307] And then the left attacks you.

[1308] And so, and the same happens on the left.

[1309] You talk on the left.

[1310] The right attacks you.

[1311] Yeah.

[1312] And the left is they come with us.

[1313] So like there's a there's a temptation a momentum to staying to that one side whatever that side is the same with foreign journalism you can cover Putin critically there's a strong pull to being pro ukraine pro Zelensky pro basically really covering in a favorable way to the point of propaganda to the point of PR the Zelensky regime if you criticize Zelensky regime there's a strong pull towards then being supportive of, not necessarily the Putin regime, but a very different perspective on it, which is like NATO is the one that created that war.

[1314] There's a, there's narratives that pull you.

[1315] And what I think a great journalist does is make enemies impose sides and walk through that fire and not get pulled in to the protection of anyone's side because they get so harshly attacked anytime they deviate from the center.

[1316] Well, and I think also like there's a criticism of all centrist, which I think in some way is fair.

[1317] And I say that as someone largely who's a centrist, which is that this what about is, or like this, like, what about the left or what about the right can skew when it's not a one, it's not a both sides issue.

[1318] So in the case of like Russia, Ukraine, I think, like I'm strongly in favor of Ukraine, even though I tend to go like on both sides.

[1319] And that might be partly because one of my employees is Ukrainian.

[1320] And I think what a great journalist does, especially like in politics, is I think they criticize the regime that's most in power, most controls the keys, and is the most corrupt at that time.

[1321] And they might appear to be like, let's say during the realm of Trump, a great journalist would criticize Trump.

[1322] But that same journalist who held Trump's feet to the fire should be capable of holding Biden's feet to the fire four years later, if that kind of makes sense.

[1323] That's exactly right.

[1324] Yeah.

[1325] Yeah.

[1326] So any revealing any attacking any power center for the corruption for the flaws they have irrespective of like your political agenda or your political ideas yeah so that and that's what I mean about sort of the war in Ukraine there's several key players NATO Russia Ukraine China India I mean there's several less important players maybe some of the like Iran and like Israel and maybe Africa.

[1327] And what great journalism requires is basically revealing the flaws of each one of those players irrespective of the attacks you get.

[1328] And you're right that throughout any particular situation, there is some parties that are worse than others and you have to weigh your perspective accordingly.

[1329] But also it requires you to be fearless in certain things.

[1330] Like, for example, I don't even know what it's like to be a journalist covering China now.

[1331] Oh, that's an exact case of like China has made it so difficult to be a good journalist that they've effectively squashed criticism because to be a journalist in China means constantly risking your life every single day to criticize that government.

[1332] And so the best journalists are a lot of times outside the country or they have sources inside the country who are like there's like this you know different there's layers to the journalism where there's insiders who are leaking information but they themselves cannot publish because it's like it's you know it's it's extremely risky so yeah i think i think as a society one measure of how healthy the political structure is is how well you can criticize it without fearing for your safety.

[1333] In that sense, the chaos and the bickering going on in the United States politics is a good thing that people can criticize very harshly.

[1334] Very harsh.

[1335] And be, in terms of safety, are pretty safe.

[1336] Yes, absolutely.

[1337] I think our only challenge is, like, where it gets dangerous is around, like, top secret information.

[1338] The government comes down so hard that the danger in covering politics here is you can expose something that's top secret that should be exposed and they'll ruin you so that's where you again give props to snowdon for stepping up a hundred percent a hundred percent what's uh the origin of of uh the suspender wearing batman what's how did you come to do what you do like what we talked about where you are and how your mind works but how did it start i've kind of always been interested in fraud or or at least i saw fraud early on and i was just like curious about what is this I didn't know what I was really looking at.

[1339] So basically, my mom got cancer when I was in high school, and it was pretty traumatic.

[1340] I mean, she's fine.

[1341] She had thyroid cancer, which is, we didn't know it at the time.

[1342] It's like cancer's cancer.

[1343] But it's fairly easily treatable with surgery.

[1344] It's one of the better, you know, survivable ones.

[1345] And I just watched her get, like, bombarded with all these, like, phony health scams of, you know, just like colloidial silver, you know, all these different, like, remedies.

[1346] And she was very into, you know, all the different.

[1347] ways that she might treat her cancer.

[1348] And obviously, surgery is very daunting.

[1349] And, you know, I was just confused.

[1350] I was like, why are we doing so many different remedies that all seem a very dubious health value?

[1351] Later, I'd find out that these are like all grifters.

[1352] I mean, they take advantage of free speech in America to, like, advertise their products as, you know, life -saving miracles, whatever when they're, of course not.

[1353] Eventually, she got the surgery, thank God.

[1354] But I know people in my life who their parents passed away because they didn't have the surgery, they instead took the alternative option.

[1355] I know, like, I don't want to go into specifics because I don't want to mention their specific, like, case, but their family member went to Mexico for some alternate treatment, health treatment, instead of getting an easy surgery, and they died.

[1356] And so it's like, I realize, you know, where is the outrage about this?

[1357] Where's the, who covers this stuff?

[1358] And I realize, well, not many people.

[1359] people do.

[1360] Then I went to college.

[1361] I was getting a chemical engineering degree and all my friends were like telling me, you know, hey, you should come to this meeting.

[1362] You know, we don't need this.

[1363] Like, you're doing this engineering stuff.

[1364] That's great.

[1365] You're going to make like 70K a year.

[1366] But don't you want to get like rich now?

[1367] Like, why wait until you're 60 years old to retire?

[1368] Like, you can be rich now, Lex.

[1369] So I'd go show up to a hotel and there'd be an MLM like multi -level marketing, you know, pitch for Amway or whatever it was that day.

[1370] And I was once in a again fascinated.

[1371] I didn't know what I was looking at, but I was like, what is this weird game we're playing where we sit in this room, we're looking at this speaker who says he's so successful, right?

[1372] But why is he taking a Friday or a Saturday to do this, you know, pitch at night?

[1373] And they're going to telling me, I'm going to be financially free, but they're working on their Saturday and Sunday.

[1374] And so it's like, how financially free are they?

[1375] So I was just like confused.

[1376] I was like, you know, none of my friends were rich.

[1377] They all said they were going to be rich.

[1378] No one ever seemed by what I was looking at.

[1379] Later, I graduate.

[1380] I had no interest in doing engineering, which we can kind of get into, but I wanted to do something in media.

[1381] And I started covering a variety of topics, but eventually I sort of revisited this interest in fraud.

[1382] And I started talking about these kind of get rich quick grifters that were online, sort of the Thai Lopez variety, you know, 67 steps or, you know, whatever, like five steps to get rich, five coins to five million, you know, these get rich quick schemes that a lot of people were interested in.

[1383] No one seemed to get rich once again except for the people at the tippity tippity top selling the get rich quick thing.

[1384] And I was like fascinated by the structure of it.

[1385] And I was like, does nobody see what this is?

[1386] Like does nobody get it?

[1387] So I started making a series of videos on that.

[1388] And the response was like palpable.

[1389] I mean, it was like I've made a lot of stuff before that.

[1390] I had made stuff that got a million views.

[1391] I'd had like some marginal success.

[1392] but the response of like the emails that came in the I could tell this work even though it had far less views at the time was having a different level of impact and that's what I was really interested in one of my problems with engineering was from my standpoint I did chemical engineering at Texas A &M and like I was like is my future just going to be in a chemical plant improving some process by 2 % and it's like my gift to the world like I just I didn't see the hard impact And that maybe that's a lack of imagination because chemicals matter.

[1393] But I needed, I wanted to see an impact in the world.

[1394] And so when like I did start doing this fraud stuff, exposing fraud, I like clicked in my brain.

[1395] I was like, whoa, this is kind of doing what I want to do.

[1396] And so I started posting videos.

[1397] At first it really focused on like get rich, quick scheme, grifty advertising, which I think is super predatory.

[1398] And we can go into why.

[1399] But it eventually graduated to crypto.

[1400] it's snowballed, I guess, because now we're talking to San Bank McFried.

[1401] Okay, grifty advertising.

[1402] So, actually, there's just a step back.

[1403] What is the multi -level marketing scheme?

[1404] Like, what, because I've experienced a similar thing.

[1405] I remember, I worked at, I sold women's shoes at Sears in a bank, and I just remember, like, some kind of, I forgot the name of the company, but you can sell, like, knives or whatever.

[1406] Like, that's a couple of common.

[1407] Oh, uh, I know what you're talking about.

[1408] I'm sure there's a lot of things like this, right?

[1409] And I remember feeling a similar thing like, why?

[1410] To me, what was fascinating about it is like, wow, like human civilization is an interesting, like a pyramid scheme.

[1411] Like I didn't, maybe didn't know the words for that.

[1412] But it's like, it's cool.

[1413] Like you can like get in a room and you convince each other of ideas and you have these ambition.

[1414] There's a general desire, especially when you're young, to like, like life sucks.

[1415] right now.

[1416] Nobody respects you.

[1417] You have no money and you want to do good and you want to be sold this dream of like if I work hard enough at this weird thing, I can shortcut and get to the very top.

[1418] I don't know what that is.

[1419] And I also in me felt that like life really sucks and I could do good.

[1420] And I'm a lucky.

[1421] I found a way to do good.

[1422] I'm like and I don't know, you connect with that somehow.

[1423] I think there's like this weird fire inside people to like to make better of themselves.

[1424] Right.

[1425] know if it's just an American thing or if it but anyway that was fascinating to me from a human nature perspective grifters play on this though right like this is so the best salesman play on true narratives that you already believe so the true narrative is you know life is unfair it is tough um the american dream as described by go to a job work at the same company for 40 years and then retire to a safety net that your positive is going to be there that is large largely debt.

[1426] And so they like play on those fears and those problems to then sell you a pill, a solution, a thing.

[1427] And the problem is that the solution is usually worse than even the problem they sketched out.

[1428] Like you will do better most of the time by going with the regular company than you will by going with these goofy multi -level marketing.

[1429] But let me answer your question.

[1430] What is a multi -level marketing?

[1431] So there's a criticism, first of all, that, well, let me get to what it is in theory.

[1432] Like at its most ideal, multi -level marketing, is where you have a product that you're selling.

[1433] And one of the ways you help sell it is by rather than going through traditional marketing, like where you go and you put out print advertising, it's like sort of a social network of marketing.

[1434] I sell to you.

[1435] And then actually, Lex, not only can I sell to you, you can then go sell this product.

[1436] And you'll make money selling it.

[1437] And you know what?

[1438] To incentivize me to get other salesmen, because when I get another salesman, I'm actually giving myself competition.

[1439] So that's bad.

[1440] So to incentivize me to do that, they'll pay me part of what you make.

[1441] Right?

[1442] And then you go out and you go, okay, well, I can sell this product.

[1443] I also can get new salesman to like sell for me and I'm going to make money from you, whatever.

[1444] So it goes down the line of you create multiple levels where you can profit from their marketing, right?

[1445] The problem with this system is that however well -intentioned it is, is that usually the emphasis of that selling and making money ends up not being about the product at all and ends up entirely being about recruiting new people to recruit new people to recruit new people to recruit new.

[1446] people.

[1447] That's the real way to make money in multi -level marketing.

[1448] This is where the very true criticism of most multi -level marketing, if not all, are pyramid schemes in structure.

[1449] Because what a pyramid scheme is, is it's all about, I put in $500 and I recruit two people to put in $500, and that comes up to me, and they get two people to put in $500 and it goes to them.

[1450] And the reason it's a flawed business model is, in order for it to work and everyone to make money, you'd have to assume an infinite human race.

[1451] And so that's not the case.

[1452] Most people, end up getting screwed in multi -level marketing and in pyramid schemes.

[1453] That's what that is.

[1454] That's that thing.

[1455] And the quality of the product, it doesn't necessarily matter where you're selling.

[1456] To people who are financially incentivized to, like, buy this thing.

[1457] Yeah.

[1458] And so you're selling the dream of becoming rich to the people down in the pyramid.

[1459] That's the real product of multi -level marketing, unfortunately.

[1460] And so you look at the statistics of these companies, and although they'll make it seem like it's so easy to be the top, you know, 0 .1 % who's making all this money.

[1461] The statistics are that 97 % make less than a minimum wage doing this.

[1462] They spend an enormous amount of time.

[1463] And just what's so cruel about it is that's not advertised up front.

[1464] I mean, it's like, if I go at work at McDonald's, I know what I'm getting.

[1465] If I go work at Amway, I have visions of, they've sold me visions of beaches and whatever.

[1466] And more than likely, I'm losing money.

[1467] So better than 50 % of people lose money.

[1468] But 97 % of people make less than minimum wage.

[1469] So it's like, it's such a bad business for the vast majority of people who join it.

[1470] And the people at the very top who are lying to the people at the bottom saying they all can do it when they can't are making all the money.

[1471] So it's, yeah, it's really messed up.

[1472] And the interesting thing I've noticed, maybe myself too, because I've participated in the knife selling for like a short amount of time.

[1473] That's probably the experience that most people have.

[1474] Not cutco, is it?

[1475] I don't know.

[1476] I don't think it was cutco.

[1477] I know what you're talking about.

[1478] It's killing me. But I think there's several variations of it.

[1479] I think I was part of a less popular one.

[1480] It doesn't, I keep wanting to say it was called Vector.

[1481] Something with a V was what I was going to say.

[1482] It might be vector.

[1483] Yeah, I get what you're saying, though.

[1484] It's a multi -level marketing knife selling.

[1485] But the thing is, I just remember my own small experience with it is I was too, I was embarrassed at myself for having, like, participated.

[1486] I think there's an embarrassment.

[1487] that's why you that's why people down in the pyramid don't like speak about it right that your part like i don't i'm trying to understand the aspects of human nature that facilitate this well this is one of the problems with fraud is there's a tremendous embarrassment to being had yeah also if you buy so slightly different human nature is that if you buy into a get rich quick scheme and then it doesn't deliver you're more likely to blame yourself than blame the product for not actually working you go well there must be something flawed with me That's true.

[1488] And they constantly reinforce this.

[1489] They go, well, it's all about your hard work.

[1490] The system works.

[1491] Look at me. I did it.

[1492] So if you're failing, it must be some indictment of your character, and you have to always double down.

[1493] You have to double.

[1494] The system can't be flawed.

[1495] You must be flawed.

[1496] And so, yeah, it's a really messed up system.

[1497] It really preys on people's psychology to keep them in this loop.

[1498] And that's why in some ways these things are so viral, even though they don't actually get most people a significant amount of wealth, and they cost most people money.

[1499] so it's very unfortunate most people do have the dream of becoming rich most young people right and the thing is is that everyone knows in business what do you sell you sell solutions to problems so if so many young people want to get rich the product is that pitch it's you sell them the dream why this gets so grifty and so cruel and predatory is because there is no easy solution to this There is no solution that people are going to buy, because the real solution people want is no work, no education, no skills required, no money up front.

[1500] And people will pay any price for that magic pill and people are happy to sell that magic pill.

[1501] And I think those people are very cruel and I think deserve to get exposed for it.

[1502] So somebody that's been criticized for MLM -type schemes is Andrew Tate.

[1503] Yeah.

[1504] Somebody.

[1505] that I'm very likely to talk with.

[1506] So for people who have been telling me that I'm too afraid to talk to Andrew Tate, first of all, let me just say, I'm not afraid to talk to anyone.

[1507] It's just that certain people require preparation and you have to like allocate your life in such a way that you want to prepare properly for them.

[1508] Sure.

[1509] And so you have to kind of think who you want to prepare for Because I have other folks that have more power than this particular figure that I'm preparing for.

[1510] So you have to make sure you allocate your time wisely.

[1511] But I do think he's a very influential person that raises questions of what it means to be a man in the 21st century.

[1512] And that's a very important and interesting question, because young people look up to philosophers, to influencers about what it means to be a man. they look up to Jordan Peterson they look up to Andrew Tate they looked up to others to other figures and I think it's important to talk about that to think what does it mean to be a good man in the society of course in the other gender there's the same question what does it mean to be a good woman I think obviously the bigger question is what does it mean to be a good person but Friedman podcast I swear to God um uh do now we interrupt okay uh so on that said one aspect of the criticism that andrews received yeah is not just on the misogyny is on the MLM aspect of uh the multi level marketing schemes so is is there some truth to that is there some fraudulent aspect to that so yeah i definitely think so i mean that's the main reason i criticized him um so let's back up there's a few clarifications i need to make what Andrew Tate is selling is not multi -level marketing, although he is selling the dream.

[1513] He's selling an affiliate marketing thing, which is slightly different.

[1514] So in multi -level marketing, if I sell to you and then you go sell to two other people, I make money from those two other people down the chain, multi -level.

[1515] Affiliate marketing is sort of like one level.

[1516] I only make money.

[1517] So Andrew Tate had this affiliate program where if you sold Hustler's University to somebody else, which sounds like something boomers would put on Facebook in like 2010, like I went to Hustlers University.

[1518] School of Hard Delties.

[1519] By the way, you were a member of Hustlers University.

[1520] Yeah, I joined.

[1521] I joined.

[1522] I became a hustler.

[1523] That's in large part due to why I'm so successful is because of my Hustler University membership.

[1524] I'm just kidding.

[1525] But so it's an affiliate program.

[1526] So you'd sell, like I sell to you this $50 course and I make like $5.

[1527] And Andrew Tate in perpetuity makes $50 a month off of you.

[1528] Okay.

[1529] What does this course actually sell, right?

[1530] Because ultimately he's selling the dream.

[1531] He's selling, hey, the Matrix has enslaved you.

[1532] He's really gone down this, like, neo rabbit hole.

[1533] So the Matrix has enslaved you.

[1534] Your life is controlled by these people who want to keep you, like, kind of weak, you know, lazy, whatever.

[1535] You need to break out and you need to achieve the new dream, which is sort of like hustling your way to the top.

[1536] You don't need the antiquated systems of school.

[1537] You can just pay me $50 a month and I will teach you everything.

[1538] Okay.

[1539] So what do you actually get?

[1540] Well, and why is it a scam?

[1541] So you actually, I think it's just a scam in terms of like value and like you're selling based on these completely unrealistic things.

[1542] He's like, let's get rich.

[1543] Okay.

[1544] You get a series of Discord rooms.

[1545] You know what Discord.

[1546] Most people know what Discord is.

[1547] It's like a bunch of, you know, chat rooms basically, right?

[1548] So it's like AOL or is it like?

[1549] Yeah, yeah, yeah, right, right.

[1550] Well, I'm talking to the guy who, who quit Emacs.

[1551] So I don't know.

[1552] There's Discord servers.

[1553] And in these like, there's like, there's like seven different rooms you can go in or there's several rooms.

[1554] and each one is like a different field of making money.

[1555] E -commerce, trading, cryptocurrency, I think fulfillment by Amazon, like copywriting.

[1556] Okay, so I went to all of these.

[1557] I checked them out.

[1558] I checked all their money -making tools.

[1559] The first funny thing is that Andrew Tate is nowhere to be found.

[1560] The supposed successful guy that you bought into is nowhere to be found.

[1561] It's these professors that you have now, he is, hired and said, these guys are super qualified.

[1562] So, like, looked up some of what some of these guys have done.

[1563] And some of them have launched, like, scammy crypto coins.

[1564] The cryptocurrency professor was, like, shilling a bunch of coins that did bad and then, like, deleted the tweets.

[1565] I mean, just completely exactly what you'd expect.

[1566] Behind the paywall, it's nothing of substance.

[1567] You're not going to learn to get rich by escaping the matrix and going to work for Jeff Bezos.

[1568] Fulfillment by Amazon is not escaping the matrix, right?

[1569] Like, that's not.

[1570] not the way to hustle to the top.

[1571] It's literally a field of making money that everyone in the world has access to.

[1572] If you want to differentiate yourself and make money, the first thing you realize is going into skill sets that literally anyone with an internet account can do is a bad way to do that because you have to have some differentiating factor to add value.

[1573] So it's just such a obvious and complete scam because there is no value to this like so -called education.

[1574] The professors are crap.

[1575] The advice, they're like hiding some of the bad things they've done.

[1576] And Andrew Tates nowhere to be found.

[1577] Ultimately, that's why everyone joins.

[1578] What he's done is very interesting because, and I'll give him credit in his marketing, he's been very savvy to like make the reasons you admire him, not the thing he's sort of selling, which is weird.

[1579] like he's selling get rich quick which seems like it relates to his persona but is actually very orthogonal to it his persona is like the tell it how it is like tall buff rich guy it's like actually his persona that you're buying into and then he's selling you this thing to the side which when people get in there and they're not delivered on the product he still is those things that you first thought he was so it's like i think it's to some extent he's made a lot of money by making the thing that he makes money on, not the thing he gets so much pushback online for and what he's also loved for.

[1580] So people will push back for his misogyny, but the real way he's making money is just like basic get rich quick schemes that are super obvious to spot.

[1581] But everyone's distracted by like, oh, he said some crazy stuff about women or, you know, all these various other scandals he's gotten himself in.

[1582] To get more and more and more attention.

[1583] So with the persona, is the hustler university still operating?

[1584] I think they've rebranded it.

[1585] I'm part of their pitch now.

[1586] I'm like, they put me on as like, I mean, as like, the Matrix is trying to take us out, Lex.

[1587] And then it's me saying like, you know, they put me in like saying, I'm part of the Matrix.

[1588] They put me in saying, oh, this guy sucks.

[1589] You know, I joined.

[1590] It sucks.

[1591] And so they'll play that and they do like a base drop and it's like, you know, don't listen to people like this.

[1592] I mean, it's, I'm basically like a commercial.

[1593] Oh, so you've been co -opted by the Matrix to attack.

[1594] Yes.

[1595] You're an insider threat that infiltrate.

[1596] and now is being used by the Matrix to attack him.

[1597] Well, to everyone who criticizes him as part of the Matrix, he won't say who the Matrix is.

[1598] It's just the shadowy cabal of rich, powerful people.

[1599] It's just like the easy narrative for people who are disaffected and who feel cheated by the system.

[1600] You just collectivize that system and you make it the bad guy.

[1601] And you go, look, look, those guys, those guys who have been cheating you, they're the bad guys.

[1602] They want me shut up.

[1603] And then now the person, that the people who harmed you, they want this guy shut up, you're going to listen to him.

[1604] So it's like the most basic psychological manipulation that everyone seems to constantly fall for.

[1605] It's really trivial and stupid, but...

[1606] Can you steal man the case for Hustler's University where it's actually giving young people confidence, teaching invaluable lessons about like actually incentivizing them to do something like fulfillment by Amazon, the basic thing to try it, to learn about it, to fail, or maybe see, like, to try, to give a catalyst and incentive to try these things.

[1607] As much as it pains me, I will try to give a succinct, maybe steelman of it, as best as I can, thinking that it's such a grift.

[1608] But I think what you would say is that some people in order to make a change in their life need a someone who they can look up to and men don't have a lot of like strong role models like big male presences in their life who can serve as a proper example so the most charitable interpretation would be Andrew Tate would encourage you to go reach for the stars I guess my problem is I have a deep like I have a deep issue with the like lust and and greed that centers all these things.

[1609] It's like this glorification of wealth equals status, wealth equals good person, wealth and Bugatti equals, you are meaningful, you matter.

[1610] And like the dark underlying thing is that none of that, none of that matters.

[1611] Like it matters that you make a decent living, but past just like that, I think the like lust for more.

[1612] stuff and the idolization of these people that is just like opulence is a net bad.

[1613] So that's like my steel man has to stop there because I really disagree with like the values that are pushed by people like that.

[1614] Yeah, no, I agree.

[1615] That's the thing that should be criticized.

[1616] I shouldn't say it doesn't matter.

[1617] I think it's just like an amazing meal at a great restaurant.

[1618] It matters.

[1619] It's money and Bugatti's for many people make life beautiful.

[1620] Like those are all completely.

[1621] but I think money isn't the you can also enjoy a beautiful life and a hike in nature you can there's a lot of ways to enjoy life and one of the deepest has been tested through time is the intimacy close connection and friendship with other people or with a loved one they don't talk about like love yeah what it means to be deeply connected with another person is just like get women get money all those kinds of things but that yeah that I think I don't want to dismiss that because there's, like, value in that, there's fun in that.

[1622] I think the positive, I don't, I haven't investigated Hustis University, but the positive I see in general as young people don't get much respect from society.

[1623] I know it's easy to call it The Matrix and so on, but there's a kind of dismissal of them as human beings, as capable of contributing, of doing anything special.

[1624] And then here's, you have young people who are, sitting there broke with big dreams they need the mentors they need somebody to inspire them so like um i would criticize the flawed nature of the message sure but also it's just like you have to realize like there needs to be institutions uh or people or influencers that help like inspire right the problem is though is the people who are pitching unrealistic versions of that are getting a lot of attention Whereas, like, there's so many great free courses where you can learn everything and more about fulfillment by Amazon or about copyrighting or all these different things that I think, like, so often the air is just, the oxygen is sucked up by all the grifters who promise everything.

[1625] It's back to what we said about vaporware.

[1626] This is one of the reasons that, like, educational products can so often be co -opted by grifters is vaporware is very hard to do.

[1627] distinguish because the feedback loop on education is not clear.

[1628] It's not obvious immediately.

[1629] So I can sell you a book and I can say this is going to change your life if you apply it.

[1630] If your life doesn't change, I just say, well, you didn't apply it, right?

[1631] Like there's this weird relationship.

[1632] It's not clear.

[1633] The value, it's not so easy to quantify education.

[1634] So that gets co -opted by people who make all the promises.

[1635] They get a ton of attention, a ton of money.

[1636] And then those people are often left left confused and like kind of disillusioned maybe thinking well this didn't work in one year so it's not going to work at all um and so i think yeah there there are problems there there's certainly a need for like male role models there's certainly a need for somebody kind of to speak to a younger generation i just think that person shouldn't shouldn't be maybe andrew tate like personally yeah so you have to criticize those particular individuals I also I think the like the Bugatti aspiration is so stupid like it's so let me steal man so I'm a person who doesn't care about money don't like money the women maybe appreciate the sort of the beauty of the other sex but like yeah cars in particular is like really is this really the manifestation of all the highest accomplishments a human being can have in life yes I can criticize all that but But to steal me in that case is a young person, a dreamer, has ambition.

[1637] And I often find that education throughout my whole life, there's been people who love me, teachers who saw ambition in me and try to reason with me that my ambition is not justified.

[1638] Looking at the data, look, kid, you're not that special.

[1639] Look at the data.

[1640] Right.

[1641] You're not, and they want it, dude, they want you to like, not dream, essentially.

[1642] And then again, I look at the data, which is all the people, I just talked to Hadja Gracie.

[1643] This, Hodger Gracie is a jihadist's person, widely acknowledged, probably the greatest of all time, dominated everybody.

[1644] But for the longest time, he sucked.

[1645] And he was surrounded by people that kind of, you know, don't necessarily believe in him, so he had to believe in himself.

[1646] You have to, it's nice to have somebody, I just, as older I get and I've seen it, it's so powerful to have somebody who comes to you, an older person, whether it's real or not that says you got this kid.

[1647] I believe in you.

[1648] I believe in you.

[1649] Sure.

[1650] Yeah, it does.

[1651] I mean, I think, so I think dreaming is actually really important.

[1652] I'm more protective over people co -opped those dreams for money.

[1653] Yes, yes.

[1654] And like, I do think.

[1655] it matters so much that we encourage people to take risks.

[1656] It's one of the great things about America is it lionizes, like, sort of people who have taken risks and won.

[1657] But I think it's just a weird, vapid thing when, like, the reason you do all of it is for this thing you can get out at the end of the day.

[1658] When we all know, and you, like, you've just heard a million interviews, like nobody ever gets through Bugatti and goes, this now completely fulfills me. Everyone knows the beauty and the like fulfillment actually comes from becoming obsessed about what you're doing for its own sake, sort of the journey, the beauty of that thing.

[1659] And I think money's just this thing we have to deal with to be able to do cool stuff.

[1660] Like I acknowledge that, you know, you need money to build the $10 million studio.

[1661] You got to get the cameras.

[1662] You got to get the lights.

[1663] And I'm very blessed to be able to have gotten that.

[1664] But past a certain point, like I think that is really the function of money is to just do cool stuff.

[1665] But ultimately, if you can't fall in love with the process and the craft itself, you will be left very unhappy at the end of it.

[1666] And so to start people off on that journey by pointing to the shiny object and going like, that's what you should care about seems to me so backwards.

[1667] We should learn from the actual people who have done it and said, that shiny thing did nothing for me. Learn to love the journey and like that's the thing we pitch people, as unsexy as that might be.

[1668] Yeah, absolutely.

[1669] That's well said.

[1670] And the same applies to, like, the Red Pill community that talks about dating and so on, that there is, there is, it's not just about the number of hot women you go to bed with.

[1671] It's also about intimacy and love and all those kinds of things.

[1672] And so, like, there, there's components to a fulfilling life that is important to sort of educate young people about.

[1673] Totally.

[1674] But at the same time, feeding the dream and saying take big risks.

[1675] Sure.

[1676] And you, the little you that has no evidence of ever being great can be great because there's evidence time and time again of people that come from very humble beginnings and doing incredible things that change the world.

[1677] Yeah.

[1678] And there's just a tremendous, like, funny thing where you can't become great without having a willful denial of the statistics.

[1679] Like, in some ways you have to take the chance, even if that chance is so improbable.

[1680] and it's always those people who did take that chance who end up pointing, so I agree.

[1681] Probably SBF and FDX is the biggest thing you've ever covered, but previously you've called the Save the Kids scam, the world's influences scam, like the biggest in the world influencer scam you've ever seen.

[1682] Can you describe it?

[1683] Sure.

[1684] So Save the Kids was a charity coin that was launched by a number of extremely popular influencers.

[1685] I think they had over 50 million followers together.

[1686] Huge names.

[1687] And they basically said, hey, guys, invest in this coin.

[1688] We're going to save the kids.

[1689] A portion of the proceeds go to charity.

[1690] And this coin, it's unruggable.

[1691] So rugging is the term for, remember earlier we talked about Safeman, you just grab the pool of funds in the middle and you take them out.

[1692] Okay.

[1693] It's unruggable because we have this smart code that is going to prevent people who are, quote, wales, which is a crypto term for saying you have a large portion of the tokens, it'll prevent those people from selling a large amount of that at one time, right?

[1694] And so basically, you don't have to worry about trusting us.

[1695] It just is what it is.

[1696] Join, and we will, you know, change the world, save the kids, whatever.

[1697] It was really skeezy from the beginning and sketchy because their logo matched the Save the Children logo, which is like an actual charity that, you know, So they basically copied it and said, we're saving the kids, like a knockoff brand.

[1698] And almost immediately the project rugged.

[1699] They stole the money.

[1700] And tracing back through, the code was changed the last second before launch.

[1701] Like if you looked at their code that they launched as a test versus the code they launched in actuality, they changed only like two lines.

[1702] And it was the whale code to basically make the whale code non -existent.

[1703] Like you can sell as much as you want, as fast as you want.

[1704] And it turned out that some of the influencers had not only sold that and made money, but also had a pattern of pump and dumping tokens.

[1705] So we can talk about what that is.

[1706] Yeah, what's pump and dump?

[1707] A pump and dump is just where, you know, you have a huge following.

[1708] You promote your little Lex coin to everybody while holding a big portion of it.

[1709] And as everyone rushes into buy it, the price is going to pump.

[1710] And you dump at the same time.

[1711] So that's where the name comes from pump and dump.

[1712] You pump the price.

[1713] sell all your tokens, make a lot of money.

[1714] So I traced basically their wallets on the blockchain and found that two of the actors specifically had had a long history of doing this, which really proved malicious intent.

[1715] And why I called it the worst is not, it certainly wasn't the worst in terms of like the amount of people affected.

[1716] It relatively was like a small pump and dump because it rugged almost immediately.

[1717] But in terms of the amount of people that were involved in it, in terms of the amount of of malicious behavior before it that like sort of proved that this wasn't an accident.

[1718] The fact that there was like this whale code, it was one of the most cynical attempts to just take the money of the followers you had and just like, that's mine now.

[1719] So that's why I called it that, but that's to save the kids.

[1720] So that was a lot of the phase members and it was, I think Addison Ray.

[1721] There were a lot of people who seemed like they were kind of taking shrapnel on it.

[1722] There was like this guy Tico who he didn't even sell the tokens.

[1723] He just held onto it the entire time and lost like a few thousand dollars or maybe even, I forget the exact amount.

[1724] He lost a lot of money, a decent amount.

[1725] And so like he took a lot of shrapnel with that, but there were also people who were maliciously doing this.

[1726] So in that investigation, like several of the members of Fayes got kicked out.

[1727] One of them got like permanently banned.

[1728] And then this other guy that I talked about fled the country.

[1729] Like he sold all his lungings and like flood the country and you know hit out in in london or wherever he is now i don't really know where he is somewhere in the u k area so the basic idea there is to try to convert your influence into money correct okay that's the basic idea behind a lot of influencer crypto promotions well but right but that that that little word influencer means something because there are most crypto scams influencers scams they're not right most most high profile ones like just by nature they tend to be made high profile by the influencer sometimes they are but you're right a lot of money has been lost and like nobody finds out because there's no one big sort of attached to it they just steal a lot of money but um influencers are great salespeople because like in order to overcome the resistance of getting you to buy some random coin there's to be a reason and so much of the 21st century content creator generation is defined by these strange parasocial relationships where people feel like they know you.

[1730] Not the character you play, but you, and you have some friendship with them.

[1731] When in actuality, you don't know the viewers.

[1732] You know, you have a sense, but you don't actually know all of these people.

[1733] And so that relationship is extremely powerful in terms of persuasion.

[1734] So you can say, I believe in this.

[1735] And I've watched you for years, and all of a sudden I say, if Lex believes in, I believe in.

[1736] And I trust him as a human.

[1737] And so that differentiates these coins.

[1738] And all of a sudden, the coin blows up, gets really popular.

[1739] You made this side deal.

[1740] You make a ton of money.

[1741] I have to say, podcasting in particular is an intimacy.

[1742] Like, I'm a huge fan of podcasts.

[1743] And I feel like I'm friends with the people I listen to.

[1744] Right.

[1745] And boys that a responsibility.

[1746] Yes.

[1747] And that's why it really hurts me to announce that I am launching Lex coin.

[1748] No. No, man, I, this, I hate money.

[1749] I hate this kind of, the scheminess of all of this, the use, the use of any kind of of fame that you have for that kind of stuff.

[1750] There's something just.

[1751] What makes it's so, like, frustrating is these people, disgusting about it.

[1752] have a general sense of what they were like sort of what i'm i'm in the even though i wouldn't describe myself as an influencer i make content on youtube i know that especially since they were taking these huge corporate sponsorships they were making tons of money they didn't have need for these scams i mean i think it's one thing to scam if you're like broke on the street you know and you're playing three card monte to like live and i think it's a whole other ethically cruel thing to do if you're basically trying to upgrade your penthouse to the building next door and like you're already well off and you just kind of want to get even further ahead.

[1753] I think that's where it's.

[1754] Well, this is a fascinating thing.

[1755] So I've been very fortunate recently to sort of get, you know, whatever, a larger platform.

[1756] And when you find out is like life is amazing.

[1757] I always thought life is amazing.

[1758] But it becomes more amazing like you know, you meet so many cool people and so on.

[1759] But what you start getting is you have more opportunities to like, yeah, like scammers will come to you and then try to use you, right?

[1760] And I could see for somebody could be tempting to be like, ooh, it would be nice to make some money.

[1761] I wanted to say like on this, kind of we're on this topic of opportunities you get, you know, kind of when you get a platform.

[1762] So one of the reasons kind of I railed a little bit earlier against materialism or whatever, I think to the extent to which you can moderate your own greed, you can play longer -term games.

[1763] And I think so many people end up cutting an otherwise promising career short by just wanting it too fast.

[1764] So I think it's like a huge edge, just like discipline is in terms of like achieving what you want.

[1765] I think I'm like a very moderate, like being comfortable with a moderate existence and finding happiness in that is a huge edge because really your overhead is so much cheaper than the people who need a Ferrari or a super nice house to feel fulfilled.

[1766] And when your overhead is less, you have the luxury to say no to like sketchy offers.

[1767] You have freedom that other people don't have because a lot of times people don't pitch it this way.

[1768] They pitch a Ferrari as freedom or like big houses like you've made it.

[1769] In a lot of ways, those shackle you back to like, you got to find the cash flow for those things.

[1770] It's never a free ride.

[1771] Yeah, that's really beautifully put.

[1772] I've always said that I had fuck you money at the very beginning.

[1773] I was broke for most of my life.

[1774] the way you have fuck you money is by not needing much to say fuck you.

[1775] That's right.

[1776] I mean, there's the overhead that you're talking about.

[1777] If you can live simply and be truly happy and be truly free, I think that means that means you could be free in any kind of situation.

[1778] You could make the wise kind of decisions.

[1779] And in that case, money enables you in certain ways to do more cool stuff, but it doesn't shackle you, like you said.

[1780] Too many people in the society you would shackle because material possessions kind of like draw you into this race of more and more and more and more and then you feel the burden of that, bigger houses and all that kind of stuff.

[1781] And now you have to keep working.

[1782] Now you have to keep doing this thing.

[1783] Now you have to make more money.

[1784] And if it's a YouTube channel and so on, you have to get more.

[1785] And the same, it's not even just about money.

[1786] That's why I deliberately don't check views and likes and all that kind of stuff.

[1787] you don't want that dopamine of like um of pulling you in i have to do the thing that gets more and more attention or um more like yeah like money and it's so wise yeah it's a huge negative hit on your um and your ability to do creative work can i can i ask you about that because i always i'm always interested in this um i completely agree i think it's funny because when you abstract yourself out to the people you admire and respect who inspired you to do the creative work you do, you never think about like the views they were getting or the money they were making or the influence they had.

[1788] All you ever think about is the work itself.

[1789] And it's funny when a lot of people get in this position, your temptation is to focus on that which you can measure, which is like all the stuff you said, like the likes, the view.

[1790] That's not actually the target or what you got into it for.

[1791] If you get into it for like, because you're inspired or whatever, your goal is inspiration, its impact.

[1792] And like that can't be quantified that same way.

[1793] So it's interesting.

[1794] You have to find a way as a creator of any of the stuff to like deliberately detach yourself from the measurable and focus on this thing, which is kind of abstract.

[1795] And I was wondering if you have any like ideas for that.

[1796] So one, yeah, there's a bunch of ideas so one is uh figure out ways where you don't see the number of views on things so i have i wrote a chrome extension for myself that hides the number of views um that's really funny that i know what's funny is i for me because it's useful for other people's content oh my gosh that's i'm going to need to borrow this that was my problem i actually have some chrome extensions for I don't like going down like recommendation rabbit holes when I'm at work I just want to like search for a video find it I don't want to see like all the up next because all the waste time so I use Chrome extensions for that but the views is a problem because it's relevant to me as a creator like is this a big video is it a yeah which is why I really hurt when they remove like likes and dislikes because I want to know for tutorials and so on what's I mean that's probably really useful for you the dislikes yeah do you have that do you ever considered making that Chrome extension public?

[1797] Sure.

[1798] Actually, yeah, and there would be a good philosophy behind it, right?

[1799] Like, don't, if you're a creator.

[1800] I really like it.

[1801] I love the idea.

[1802] I've wanted this thing before.

[1803] I don't know if it necessarily exists.

[1804] Because I don't think I've made a Chrome extension public.

[1805] That would be cool.

[1806] I would love to see, yeah, I would go to that process of adding it to the, because I love like open sourcing stuff.

[1807] So yeah, I'll go add it to the Chrome extension, like the store.

[1808] Yeah, because I totally have, I've hated this for like a long time.

[1809] YouTube made a change and they just continue to make the analytics front and center, which makes sense from their perspective.

[1810] They're trying to give people better data on what is successful and what makes something successful.

[1811] They're trying to train their creators.

[1812] But in the process, it can lead to some unhealthy habits of thinking, views, define a video.

[1813] And so I've long thought, okay, I've learned analytics.

[1814] I understand retention.

[1815] Now I sort of want to do like the Zinn, like forget it all them.

[1816] And you can only do that if it's out of your site.

[1817] Depends how many friends you have who are creatives, the other really important thing, and I found this that has nothing to do with creatives, but people respect very much in my life, some of them people would know that they could be famous, they will come to me and say, they will comment on how popular a video was on YouTube.

[1818] They will sort of complement the success.

[1819] The success defined by the popularity, even for a podcast where most of the listenership is not on YouTube or in Spotify.

[1820] that I was getting crazy.

[1821] They will still compliment the YouTube number.

[1822] So one of the deliberate things I do is either, depending if it's a close friend, I'll get offended and made fun of them for that.

[1823] And there's a signal to them, this is not the right thing.

[1824] I don't want that.

[1825] And for people more like strangers that compliment that kind of stuff, I show in zero interest.

[1826] I don't receive the compliment well.

[1827] And I'll focus in the aspects of the compliment that have to do with like what do they find interest.

[1828] thing like you know i kind of make them uh reveal to them that you shouldn't care about the number the number of views it is strange there's like this weird hypnotism that happens once you get past a certain number and that number is some approximation it's like it's always like hard numbers it's like 100 000 a million 10 million people just see a number and they just go like wow that is and they assign a quality to it that may not like it usually means nothing at all so i agree i've never I've never been good at like handling that because you're like thank you yeah you know it's like okay okay that said I do admire very different for me but I admire Mr. Beast who unapologetically says like the numbers all that matters like basically the number shows like the number views you get shows like how much uh I don't know joy you brought to people's lives because if they watch the thing they kept watching the thing they didn't turn tune out that means they loved it you brought value to their life you brought enjoyment and I'm going to bring the the maximum amount of enjoyment to the maximum number of people and I'm going to do the most epic videos and all that kind of stuff so I admire that when you're so unapologetically into the numbers yeah he's sort of it's interesting he's like gosh we're getting way to in the wait time I is this a I don't know like yeah constantly self -monitoring about like what topics we're on but if we can mr. beast is so interesting because he's almost done what have you ever seen moneyball uh yes the story of how someone brought statistics to baseball and it revolutionized everything he's moneyballed youtube yeah he took statistics to youtube and it changed everything and everybody now so many people are playing catch up i think it would be interesting in a few years to see how he develops and now that he's like kind of revolutionized like the data side of things how he then approaches future videos.

[1829] Because there's a point at which you've optimized, you've optimized, you've optimized.

[1830] But optimizing for short -term video performance is not the same as optimizing for long -term viewer happiness.

[1831] And how do you do that?

[1832] Assuming the YouTube algorithm does not perfectly already do it for you, which it doesn't.

[1833] But they're trying to obviously do that, optimize for long -term happiness.

[1834] And also growing, optimize it for long -term creative growth.

[1835] Sure.

[1836] I think the thing that people don't, I mean, maybe I don't know, I actually don't know enough about Jimmy, but like, to me, the thing that seems to be special about him isn't the money ball aspect.

[1837] That's really important.

[1838] It's like taking the data seriously.

[1839] But to me is that the part of the idea generation, the constant brainstorming coming up with videos.

[1840] So it's nice to connect the idea generation with the data, but like how many people when they create on YouTube and other platforms really generate a huge amount of ideas like constantly brainstorm constantly, constantly brainstorm.

[1841] At least for me, I don't I don't think I go so many steps ahead in my thinking.

[1842] I don't like try to come up with all possible conversations.

[1843] I don't come up with all possible videos that can make.

[1844] But you can't, so the one mistake to make is to map Jimmy's philosophy on every genre because not every genre fits that model.

[1845] Your model is not an idea -centric model.

[1846] It's a people -centric model.

[1847] And so you, like, if you were in the business of creating just mass entertainment for the sake of mass entertainment, you might focus on, okay, the reason going idea -focused instead of person -focused is such a revolutionary idea in some senses is because ideas can be broader, more broadly appealing than any single human can be.

[1848] but you're not going for that you're going for a podcast interview and I think for you the goal should always be how deep can you get with interesting guests and like finding the most interesting guests which is a different probably set of skills and well put really well put but I think the right mapping there is finding the most interesting guests yeah and I think I don't do enough work on that so for example I I try to be something I do prioritize is talking to people that nobody's talked to before.

[1849] So, because it's like, I kind of myself is not a good, like I know a lot of people that are much better than me. I really admire, I think Joe Rogan is still the goat.

[1850] He's just an incredible conversationalist.

[1851] So it's like, all right, who is somebody Joe's not going to talk to?

[1852] Either he's not interested or it's not going to happen.

[1853] Like, I want to talk to that person.

[1854] I want to reveal the interesting aspect of that person.

[1855] And I think I should do a Mr. B -style rigor in searching for interesting people.

[1856] And you should probably find people to help you search.

[1857] Sure.

[1858] So he does that.

[1859] But if we're being honest, he does that, of course, with other folks.

[1860] But he is the main engine.

[1861] Yeah, you need sort of like a pre -filter, you're the final filter.

[1862] Because your problem is you're only.

[1863] able to think of humans that you've thought of before or been exposed to, and most of the world you've never been exposed to.

[1864] So you need people to like pre -filter and go, okay, these guys are just interesting humans.

[1865] Lex has never heard of them.

[1866] And then you sort of take a batch of like a hundred people and you go, who seems the most interesting for me?

[1867] Yeah.

[1868] But by the way, on that topic, we're wheezed into wheeze.

[1869] I've almost done.

[1870] I'm building up, I programmed this guest recommendation thing where I want to get suggestions from other people because I really want to find people that nobody knows.

[1871] This is the tricky thing.

[1872] You're not famous, but the idea is there's probably fascinating humans out there that nobody knows.

[1873] Correct.

[1874] That I want to find those.

[1875] And I believe in the crowdsourcing aspect will raise them.

[1876] And now, of course, the top 100 will be crypto scams.

[1877] No. But yes.

[1878] So like I have to make sure that these kinds of swarms of humans, that recommend I can filter through and there's, there's whole kinds of systems for that.

[1879] But I want to find the fascinating people out there that nobody's ever heard from.

[1880] And from a programmer perspective, I thought surely I could do that by just building the system.

[1881] Yeah, that's how programmers always think they'll just automate a system to do it.

[1882] Well, that's the Jamie Moneyball, right?

[1883] Like looking at the data.

[1884] Yep.

[1885] Weeds on weeds.

[1886] How do we get to Mr. Beast exactly?

[1887] I'm not sure.

[1888] Okay.

[1889] Save the kids.

[1890] influencer.

[1891] Influenced.

[1892] That's probably yeah.

[1893] Let me ask you more on the guru front.

[1894] You've okay let's start with somebody that you've covered that I think you've covered a lot and I'm really embarrassed to not know much about him.

[1895] I think this is like old school coffee cell.

[1896] You've been through stages.

[1897] I've been through stages and phases.

[1898] A character named Dan Locke.

[1899] Who is he?

[1900] You've exposed him for a cult like human and his cult like practices.

[1901] Who is he?

[1902] what is he done?

[1903] So Dan Locke is sort of, he's gone through a number of iterations, but he was kind of this like sales trainer guy who really made a hard push into what he called high ticket sales.

[1904] And he was telling people that they could kind of escape the nine to five rat race if they just learn high ticket sales and they can have the life of their dreams.

[1905] Basically, it's like, I'll teach you to sell, but I'll teach you to ask, like not only will I teach you to sell you that pen, but I'll teach you to sell it for $50 ,000 instead of a dollar, right?

[1906] So I talked to a lot of the people who had taken this course because it was pretty expensive.

[1907] I think it was like $2 ,500 or $1 ,000.

[1908] And mind you, the people who are taking it are like teachers and like people who don't have a lot of money.

[1909] And then you take the course and immediately you find out, okay, well, there's an upsell.

[1910] At the end of the course, you're not ready.

[1911] You need to go from like high ticket closer, which is one of the products to inner circle or like the level up right and all of these courses are structured like this so they spend a tremendous amount on google ads to get people in the door promising the dream and then once you're in you're actually not done being like the product you're actually in the system that tries to upsell you again and again and again and again and again and again and eventually you're paying monthly and you're getting more and more you're constantly paying for access to Dan Locke's wisdom and like ideas.

[1912] And fundamentally, this sales system wasn't working for people.

[1913] I mean, I talked to like, for example, a teacher who put in like $25 ,000 was in debt at one point and has nothing to show for it.

[1914] I know.

[1915] And it was sort of these tactics of pressuring, pressuring, pressuring.

[1916] And then anytime anyone would complain, he would try to silence them.

[1917] So I heard from like, funny enough, this lady was a teacher as well, she put together a Facebook group basically saying I think this guy's a scam his course didn't work it's not working for a lot of people because fundamentally the promise of turning someone from a non -salesman into a person who's making six figures selling is not an easy thing to do it's not just a matter of just like take my course but anyways it wasn't working she created a Facebook group about it and he like sues her or and was like legally pressuring her to stop doing that um and I realized like somebody has to speak out about this and everyone who is is getting silenced so i was like i'm going to use my platform to raise awareness to this and people came out of the woodwork i mean saying that this guy defrauded me or he scammed me and i want to just really quickly to take a second take a beat to explain why get rich quick schemes are different than let's say selling a water bottle and saying it's the greatest water bottle ever right because sometimes people wonder they go like well doesn't Like, Nissan say their car is going to make you happy and then it doesn't make you happy.

[1918] Like, why is that different from the kind of advertising of a Get Rich Quick course?

[1919] I mean, both of them are sort of promising things that aren't true.

[1920] But you get something.

[1921] You take some kind of a training, you know, isn't it the same thing?

[1922] No. Here's why.

[1923] There's this concept in economics called elastic demand and inelastic demand.

[1924] What it essentially means is that if I raise the value of this water bottle, there's a point at which you're just going to be like, Like, no, it doesn't make any sense, right?

[1925] But there are areas in our lives where we have desperation around them that can get deeply predatory very quickly because they have no, there's no elasticity around their demand.

[1926] For example, your health, if you get cancer and I have the pill that will solve it, or at least, let's say I don't, I have a sugar pill here.

[1927] But if I can convince you that this pill will solve your cancer or treat your cancer, you will pay any amount of money you have on this earth to get this pill.

[1928] But obviously that gets really predatory really quick because selling something that isn't real is almost as compelling as selling something that is real, right?

[1929] So this happens in the get rich quick space too.

[1930] There's any amount of money you would pay to make a lot more money, right?

[1931] So these products have inelastic demand.

[1932] And that's why you see what is essentially a few webinars getting sold for $2 ,500.

[1933] Courses that literally have identical videos on YouTube, like very similar curriculums, that are selling for such extravagant amounts of money.

[1934] And I think there can be comparisons made to college, because obviously there's similar, like, questions about benefits.

[1935] But in this case, there's not even statistics available that even shows the average person gets something out of it.

[1936] that's true of like if you go to college your average income will improve right that's the justification there there's none of that there's no case studies there's nothing backing their extravagant claims of you're going to make all this money you're going to make all this wealth instead they're just as we said before they're selling you a dream so that's why i find all those like types of get rich quick schemes so problematic and uh that's why i've railed against them for significant amount of time what have you learned from um attacking exposing some of the things that Dan Locke is is doing.

[1937] What have you learned about human nature and and frosters and gurus and so on?

[1938] That's a great question.

[1939] So I think one of them is that there's this systemic problem that the phrase, there's a sucker born every minute.

[1940] It's very true.

[1941] There is no end to the people who will fall for something like this.

[1942] And the is because there's just no in to need and want and like and just lack.

[1943] I mean, it's easy to on the one hand criticize people's greed, but a lot of times you have to put yourself in their shoes.

[1944] If you're at a dead in job, you have nothing going for you.

[1945] You don't have the money to go to college.

[1946] You don't want to get in debt, fair play.

[1947] Where do you go?

[1948] Right.

[1949] As you said, there's somebody who's there saying they believe in you.

[1950] They believe you can make six figures.

[1951] you know, you're, you're going to believe in that.

[1952] And so I really felt like it made a lot more sense to tackle it from the other side, from the side of people that can stop, that can basically be exposed and basically have sort of like a negative put on their work.

[1953] I mean, they're largely going under the radar.

[1954] So I kind of felt like, you know, do you want to educate the, do you want to like blame it on the victims and say, you should.

[1955] should have known better, you should have done this, you should stop, but there's no into, no into that, or do you go after the grifters themselves?

[1956] And so that's what I realized.

[1957] I realized, like, that's the tactic that I went with.

[1958] And it's tough because it's a little, like, legally risky to do that, but, um, yeah, you just kind of got to be smart about it.

[1959] So your, your platform has gotten really big.

[1960] So there's some responsibility to that.

[1961] Weirdly big, yeah.

[1962] Yeah.

[1963] Um, let's say.

[1964] Because like, only a year ago, it was like, lot a lot smaller and then it's hard to make that adjustment you know because like to me it's just the same it's the same show i've been doing so how do you avoid becoming a guru yourself or uh your ego growing in in um there's different trajectories it could take one of one of which is you can start seeing everybody as a scammer and only you can reveal it and like every and like You have a audience of people who love seeing the epic coffee zilla grilling and you can destroy everyone and that power now is getting to your head.

[1965] How do you avoid that?

[1966] Well, I mean, this is like less optically obvious.

[1967] I think the main way is like my circle of friends doesn't care about any of that.

[1968] Like my wife doesn't care.

[1969] The people whose opinion I value has no relation to like a subscriber metric or anything like that.

[1970] I think that's like tangibly the most important.

[1971] thing to just staying grounded.

[1972] As far as like becoming a guru, I just don't have anything to like sell.

[1973] I mean, I'm not interested in teaching people finance.

[1974] I'm not interested in teaching people.

[1975] I'm not interested in selling a course.

[1976] And I've kind of given myself a hard line on that, which I think has helped me a bit, is there's a temptation to go, well, I can tell what's a scam.

[1977] So let me tell you what's not a scam.

[1978] And a lot of people have offered a lot of money to do that and basically be like, hey, I have such and such legitimate product, come be like an endorser.

[1979] And I just don't do that because I think it undermines a lot of what I do is if you get like, if you're taking money and on the side to say this is legit and you're saying this isn't legit, that's a huge conflict of interest.

[1980] So I think it's about managing conflicts of interest and keeping people around me that are grounded.

[1981] And also I think, yeah, my only interest really is just like, make cool stuff.

[1982] And I guess I'll do that until people stop watching.

[1983] So a question from on that topic from the CoffeeZillow subreddit shout out.

[1984] Shout out.

[1985] How does coffee find the strength to maintain his integrity and resist temptation of being paid a great amount of money to advertise a promote a potential scam?

[1986] Uh, I think that's like goes back to what we've been talking about a lot, which is just on what you prioritize, what you value.

[1987] I've just never, I guess I grew up kind of of lower middle class.

[1988] And I had a great time.

[1989] Like, I had a great childhood.

[1990] I had very loving parents.

[1991] And because of that, I guess, intuited at an early age that money doesn't do a whole lot.

[1992] And I knew a lot of people who were way better off who had miserable childhoods because whether their dad was always gone at work or, like, they just had other family issues that just money can't buy.

[1993] And I realized, I guess quickly, that money's a very, like, it's a glittery object that isn't what it appears to be.

[1994] And so to me, I'm like, I'm having the time of my life making my show.

[1995] I'm not going to have the time.

[1996] Like, I could, you could ruin all that just trying to go for this quick check when it's like, no, I'm having a great time.

[1997] Yeah, it's But for me, there's a lot of happiness in having integrity in looking in the mirror and knowing that you're the kind of person that has that.

[1998] In fact, walking away from money is also fun because it's like promising your, like, it's showing, it's easy to like just say you have integrity.

[1999] It's nice to like, ah, I actually, I've discovered several times in my life that I have integrity.

[2000] Yeah, you get put like basically to the test.

[2001] Yeah.

[2002] I've said like I don't know if I publicly said but to myself I say like you can't buy there's a lot of things you can't buy with me like for a billion dollars like a trillion dollars but it'd be nice to get tested that way it'd be cool to see because you never know until you're in that room true the same with power given power I'd like to believe on the kind of person that wouldn't abuse power but you don't know until you're tested so anyway you're in a really tricky position because you're doing incredible I mean I mean, you are a world -class journalist, straight up.

[2003] And so there is pressure on that of, like, not having, like, erring on the side of caution with, like, having conflicts of interest and stuff like that.

[2004] It's a really tough seat to sit in.

[2005] It's really tough.

[2006] It's really tough.

[2007] But it's unfairly tough, I feel like.

[2008] But it's good that you're sort of weighing all of those.

[2009] But that said, go donate to Coffeezilla.

[2010] donate all everything support them is a really important really really important human being the other guy i did i think is the first person i discovered that you investigated is brian rose of london real can't talk about his story um brian rose he was sort of this interesting figure because he was like trying to be to one level or another the jo rogan of london Which I don't think he did a terribly bad job of, especially initially.

[2011] He had some really interesting podcasts with some really interesting people.

[2012] And it's funny enough, I started out as I would watch him.

[2013] I mean, I don't know if I was a huge fan, but I was like, I like some of his interviews.

[2014] He had some really good, like, big gets in terms of, you know, great guests.

[2015] However, when kind of COVID started, he went down this really weird grifting rabbit hole where he did like this interview with David Ike, who's, as you know, like a pretty big COVID conspiracy theorist.

[2016] And I mean, like, actual, like, he believes some of the royals are literally lizards.

[2017] So he got shut down for that.

[2018] And he kind of made a big stink, which I think it's fine.

[2019] Nobody likes to be censored.

[2020] And I'm not even saying that he should have been censored.

[2021] But his reaction to that was to, like, raise a ton of money from his audience promising this digital freedom platform and at first it was like oh we want to raise $100 ,000 and then they raised it like within a day so he's like well we got to raise a lot more money and so eventually they raised a million dollars and he's trying to raise $250 ,000 a month to kind of keep putting his viewers money into this stuff so I started digging into the platform they were building and there was nothing free about it they had censorship guidelines and there was nothing about a platform at all there was no underlying infrastructure, he just got some white label live streaming thing.

[2022] So I criticized him for that.

[2023] It was just this ridiculous thing.

[2024] All the donators expected one thing.

[2025] They thought Brian was going to take on Google and Facebook and bring free speech back for everybody.

[2026] And of course, he didn't.

[2027] And then it kind of got worse because he started taking a lot of heat for that.

[2028] And he really pivoted hard into like the defy grift.

[2029] So he started selling this course.

[2030] about defy mastery and this is a guy who knows nothing about crypto or very little at the least.

[2031] So it just got really kind of, he just kind of doubled down on this course model of you're going to be rich if you just follow me. And it was ultimately, you just type in Brian Rose on YouTube.

[2032] You can see what his audience thought of that because almost all of them have left him at this point.

[2033] He's getting like a thousand views of video.

[2034] And it wasn't because of me. I mean, it was like people lost taste in just the constant ask for more money, more money, more money.

[2035] At some point, people get sick of it.

[2036] And it's like everyone has an understanding that like no one works for free.

[2037] But when it starts to be ego driven and driven around money, everything's about money, it drives people away.

[2038] Well, you're a part of that sort of helping, it's nice to have a voice.

[2039] Yeah, I certainly spoke out.

[2040] I mean, it wasn't like I was quiet.

[2041] I was very loud about it at the time.

[2042] But I mean in the sense that there, if you look at someone like Andrew Tate, I've made a video about him, even though he's been banned off all the platforms, he gets more views than Brian Rose.

[2043] And I think it's just like it was a testament to how much Brian Rose was like doing like the grift that people could, even people who were fans and didn't care about what I said, like couldn't look past, you know, just the constant ask for more and more money.

[2044] People just get burned out.

[2045] Is there some aspect that you worry about where, with a large audience, there seems to be a certain aspect of human nature where people like to see others destroyed?

[2046] Sure.

[2047] Do you worry about hurting people that don't deserve it?

[2048] Or rather, sort of attacking people their grifter light, but they get like a giant storm of negativity.

[2049] them and therefore sort of overpoweringly cancel them or like hurt them disproportionately.

[2050] Sure.

[2051] I mean, I try to be sensitive to my platform.

[2052] And as I've grown, I've tried to make sure my video topics have grown with me. And like, it does reach this tricky point where if you're exposing a grifter with like 50 ,000 subs who's doing some harm, are you punching down.

[2053] Right.

[2054] And so far there's been enough high profile things that I can distract myself with to where this has never been a problem.

[2055] You don't ever want to be sort of like Sir Lancelot in retirement.

[2056] Where have you heard this analogy?

[2057] Okay.

[2058] So there's this great analogy where it's like Sir Lancelot's the guy who slays the dragon, right?

[2059] He gets a lot of fame and he gets a lot of fortune for saving the dragon, or at least a lot of, you know, people love him.

[2060] But what happens after he slays the first dragon?

[2061] He's got to go find a bigger dragon.

[2062] So he goes, finds a bigger dragon.

[2063] And eventually, depending on how many dragons you think are there in the world, maybe he kills all the dragons.

[2064] And one day, people go see Sir Lancelot, and he's in a field with cows, and he's chopping their heads.

[2065] Yeah.

[2066] And he's sort of put himself in retirement, but he can't even enjoy the fruits because his whole thing is like, I'm killing the dragon.

[2067] So I try to be cognizant and I try to always make myself willing to hang up my, my suspenders, I guess, hang up my hat.

[2068] I try to be aware, like, if I significantly improve the problem, I put myself out of business.

[2069] I want to be okay with that, basically.

[2070] And just be fine with it.

[2071] I don't, the funny thing is, I was more worried about this as like an issue earlier because I thought there was a by night, like, I was like, I'm going to solve this faster, especially as it started gaining traction.

[2072] Like, I'm going to solve this fast.

[2073] I got this, you know, classic, naive.

[2074] You know, we all think we're so influential.

[2075] TX comes along.

[2076] Well, yeah, you just, you just, yeah, you just get like, with time, you get humbled because you talk to people.

[2077] I've talked to, like, versions of coffee zilla that are older.

[2078] And it's like, it's like, oh, yeah, they didn't solve it.

[2079] And they probably were better.

[2080] I just imagine a smoke -filled room.

[2081] Of just, like, retired Batman, and you're at this young, bright -eyed...

[2082] Oh, yeah, yeah, yeah, yeah.

[2083] And you don't...

[2084] Fiery -spirited investigator.

[2085] Yeah, exactly.

[2086] What's the process of investigation that you can speak to?

[2087] What are some interesting things you've learned about what it takes to do great investigations?

[2088] Sure.

[2089] Great investigations reveals something new or bring something to light.

[2090] So I think what everyone thinks in terms of investigations is like a lot of like, you know, Googling or like searching through articles.

[2091] I think that's the first thing you want to get away from.

[2092] And you want to try to talk to people doing like the non -obvious things and just trying to get perspectives that are beyond just what is available.

[2093] So a lot of it's just having conversations is so enlightening, both to victims and also obviously trying to talk to the people themselves.

[2094] Secondly, there's sometimes some analysis you can generate that's meaningful, like blockchain evidence.

[2095] So in the case of Safe Moon, for example, going back to that, I found someone's secret account where they were pumping, dumping coins.

[2096] They were saying things like, who sold?

[2097] I'm so mad at the guy who sold, F, the guy who sold.

[2098] And you look at his account and he was the guy selling.

[2099] And it's like, that is just, that's great stuff.

[2100] So digging through the blockchain, kind of I've gained some skills there.

[2101] and that's kind of this fun.

[2102] I guess I would say it's this weird edge I have right now because a lot of people don't know too much about that.

[2103] And so I have this weird expertise that works now.

[2104] I don't think that'll work forever because I think people kind of figure out how to do very similar analyses.

[2105] But so it's like kind of an interesting edge right now that I have.

[2106] So that's like a data -driven investigation.

[2107] But you also do interviews, right?

[2108] Yeah, definitely.

[2109] And then also recently I've tried to get more response, speaking to your point about like, as your platform gets bigger, I've tried to get much more responsible about like reaching out or somehow giving the subject some way to talk because I think in early on I was such a small channel that a if I asked them they wouldn't answer but B I kind of felt like I was launching these videos into the abyss and when some of my videos had real traction I was like okay hang on a second let's double check this let's triple check it let's try to make sure all this stuff is correct and there's no other side of the story I'll say this has interesting implications because for example I investigated this thing called Genesis they're a billion dollar crypto lender and my conclusion was that they were insolvent that's a huge accusation so what do you do?

[2110] Well I emailed their press team everybody I said hey I think you're insolvent I think you're this I laid out all my accusations and I said you have till I think 2 p .m. the next day to respond at 8 a .m. before I made my video, they announced to all their investors that they're freezing withdrawals.

[2111] They don't have the money.

[2112] So they front, I don't know if they saw the internet, like, I don't know if they actually saw that email.

[2113] I don't want to take credit for collapsing them or whatever.

[2114] But my point is, had I not taken that level of kind of care and just said, hey, you're a, you're a scammer, you're frauds.

[2115] Ironically, could I have done more good by allowing people to withdraw their money early?

[2116] I made some tweets that people, did see that like some people got their money out but my youtube audience is much larger and could I have helped more people had I not given them basically the ability to know what I was going to produce when I produced it boy your life is difficult because you can potentially hurt the company that doesn't deserve it if you're wrong or you if you're right and you warn the company you might hurt the well I'm glad your wife is a supporter and keeps you strong that's a top Tough, tough decision.

[2117] Ultimately, I guess you want to err on the side of the individual people, of the investors and so on.

[2118] But it's tough.

[2119] It's always a really, really tricky decision to make.

[2120] Very tricky.

[2121] That's so interesting.

[2122] And then the thing I've seen in your interviews that I don't remember, because I think when I watched you earlier in your career, you were a little bit, harsher you were having you were like trollier you're having a little more fun sure and when i've seen you recently you do have the fun but whenever you interview you seem respectful like like you you attack in good faith which is really important for an interviewer so then people can go on and actually try to defend themselves that's really important signal to send to people because then you're not just about tearing down you're after like the you know it's cliche to say but the truth like You're really trying to actually investigate in good faith, which is great.

[2123] So that signal is out there.

[2124] So people like SBF could, like he should go on your platform, I think.

[2125] I mean, now it's like in full, not just like a half -ass conversation on Twitter space, but in full.

[2126] So that's great that that signal is out there.

[2127] But of course, the downside of sort of as you become more famous, people might be scared to sort of go on.

[2128] But you do put that signal of being respectful out there.

[2129] which is really, really important.

[2130] You know, it's interesting.

[2131] It surprises me. I know it surprises other people because other people have commented, but it consistently surprises me how many people still talk to me. And maybe it's because they, and I really do give a good attempt to try to argue in good faith.

[2132] I try not to just, like, load up ad hominems or anything like that.

[2133] I just try to present the evidence and let the audience make up their mind.

[2134] But it surprises me sometimes that people will just be like, yeah, they want to talk, they want to talk, they want to talk, they want to talk.

[2135] I think it's very human in a way.

[2136] And I think it's like almost, it's almost like good.

[2137] Like one of the things that is always told to everyone who's going to talk to the cops is like you should never talk to the cops, whatever, which is true.

[2138] You shouldn't talk to the cops.

[2139] Because even if you're innocent, they can use your words, they can twist your words, but there's something that gets lost in that like almost robotic, like, you know, self -interest that I think.

[2140] having open conversations, even if you've done something wrong, I think there's something really compelling about that, that continues to make people talk in interrogation rooms, in Twitter spaces, wherever you are, regardless of whether you totally shouldn't be talking.

[2141] And I don't want to downplay that.

[2142] That's actually really important.

[2143] I mean, it's like a lot of cases get solved, a lot of investigations go farther because people sort of make the miscalculation to talk.

[2144] But I think it's like almost important in a way that we have that human bias to like connect in spite of self -interest yeah but also they're judging the integrity and the good faith of the other person so i think when people consume your content especially your latest content they know that you're a good person i follow myself like there's a lot of journalists that reach out to me and i find myself like not wanting to talk to them because i don't know if the other the person on the side is coming in good faith.

[2145] Even on silly stuff, I'm not a...

[2146] The same way.

[2147] Like, I'm not a...

[2148] I don't have anything to hide.

[2149] Like, you don't really have anything to hide, but you don't know what their, like, spin is.

[2150] Can I tell you an example?

[2151] I'm dying, because I believe so strongly that journalists have done themselves such a disservice.

[2152] Okay, one of the truest things is that, like, everyone loves journalism in theory, and almost everyone dislikes journalists as a whole.

[2153] Like there's a deep distrust of journalists And there's a deep love for journalism It's this weird disconnect I think a lot of it can be summarized In there's this book called the journal The God what it's called I think it's called the journalist and the murderer It's written by Janet Malcolm The first line of this book Is that like every journalist Who knows what they're doing Who isn't too like Is smart enough to know what they're doing Knows what they're doing is deeply unethical Or something like that And what they're talking about is that there's a tradition in journalism to betray the subject, to lie to them in the hopes of getting a story and play to their ego and to their sense of self to make it seem like you're going to write one article and you stab them in the back at the end when you press publish and you write the totally different article.

[2154] This is what actually everyone hates about journalists.

[2155] And it's happened to me before.

[2156] So I did a story like way back in the day.

[2157] I got interviewed about something that was like data with you.

[2158] to.

[2159] I made a few comments about data and YouTube.

[2160] And somehow, by the time the article got published, it's about me endorsing their opinion that PewDie Pye is an anti -Semite.

[2161] And I'm like, I reach out to this person.

[2162] I said, I never said that.

[2163] Like, what do you talk?

[2164] How did you even twist my words to say that?

[2165] And I felt so disgusted and betrayed to have like, I'm like this mouthpiece for an ideology or like a thought that I do not actually agree with.

[2166] So, and when journalists do this, they think, well, I'm never going to interview this person again, so it's okay.

[2167] So it's like, it's almost like the ins justify the means.

[2168] I get the story.

[2169] But the ends don't justify the means because you've now undermined the entire field's credibility with that person.

[2170] And when that happens, enough times, you end up sitting across from Lex Friedman and it's like, well, I don't know if they're going to represent me fairly.

[2171] Because the base assumption is that regardless of what the journalist says they could betray you and they might betray you at the end of the day and be saying you're great while they're secretly writing like a hit piece about like you know how much you know you're a bad force for the world where whereas there's an alternate universe where if the journalist was somewhat upfront about their approach or at least didn't mislead and didn't say like I love you I think you're great you would end up with less access but you would end up with more trusted journalism, which I think in the long run would be better.

[2172] I think you get more access.

[2173] I think in the long term yet, but all of these, like everything we're talking about is long term games versus short term games.

[2174] Yeah.

[2175] In the short term, you get more access if you suck up to the person, if you say this, say this, say this, and you stab them in the back later, long term, you build a long term reputation, people trust you, it actually matters more.

[2176] And it's nice when that reputation is your own individual.

[2177] So like you have a YouTube channel, you're one individual.

[2178] so people trust that because you have a huge disincentive to screw people over.

[2179] True.

[2180] I feel like if you're in New York Times, if you screw somebody over, the New York Times gets the hit, not you individually.

[2181] So you can like, you're safer, but like the reason I don't screw people over is I know that, well, there's my own ethics and integrity.

[2182] Sure.

[2183] Also, there's a strong incentive to like, because you're now, I'm going, That person is going to go public with me screwing them over, completely lying about everything, how I presented the person, for example.

[2184] And that's just going to, you know, that's going to percolate throughout the populace, and they're going to be like, Lex is the person that's a lying sack of shit.

[2185] And so there's a huge disincentive to do that.

[2186] Yeah, the journalists don't have that.

[2187] That is what's interesting about, yeah, the move towards independent journalism.

[2188] I think we'll probably end up at a space where it's so interesting.

[2189] Mainstream journalism has so much work to do to repair the trust with the average individual.

[2190] And it's going to take a lot of like self -reflection.

[2191] I've talked to a few mainstream journalists about this.

[2192] And a lot of them will admit it behind closed doors.

[2193] But like there's this general sense that, oh, the public's not being fair to us.

[2194] Like, they're very self, they're defensive, I guess, in a way.

[2195] And I understand why, because sometimes it's just a few bad apples that ruin it for everybody.

[2196] But without the acknowledgement of the deep distrust that they have with a good portion of our society, there's no way to rebuild that.

[2197] Just like when there's no acknowledgement of the corruption of the 2008 financial crash, there's no way to rebuild that.

[2198] even if most bankers, most traders are not unethical or duplicitous or they're totally normal people with who maybe aren't deserving of the bad reputation.

[2199] But you have to acknowledge the damage that's been done by bad actors before you can like heal that system.

[2200] Well, what do you think about Elon just opening the door to a journalist to see all the emails that were sent?

[2201] The quote unquote Twitter files.

[2202] Yeah, that's really interesting.

[2203] I mean, I saw a lot of, I'm like in this weird thing where I see I'm so I follow a lot of independent people and I follow a lot of mainstream journalists and that they're very polar opposite takes on that.

[2204] People really quickly politicize it but to me the thing that was fascinating is just the transparency that I've never seen from one of the really frustrating things to me because a lot of this podcast has been about interviewing tech people, CEOs and so on and they're just so guarded with everything.

[2205] It's hard to get to and so it's nice to get hopefully this is a signal look you can be transparent like this is a signal to increase transparency hopefully so i don't yeah it's it's been tribalized so quickly it's like i've lost a lot of faith in that and unfortunately it's been this like bludgeon match of like you know if you're on the right you think it's uncovering the greatest story ever about hunter biden if you're on the left you think they were just sharing they were just silencing revenge porn picks of hunter biden so therefore was justified and by the way Trump also sent messages to Twitter so doesn't that mean that like we should be criticized it just like this is goes back to why I don't touch politics is because I think as many problems as I have I think when you become a like a journalist that not even a political journalist when you become a journalist in politics you have like twice the problem so I'm like I'm happy to be well outside of that kind of sphere but it's an interesting um it is interesting And it, you know, forget Twitter files, but Twitter itself is really, really interesting from the virality of information transfer.

[2206] Yeah.

[2207] And from a journalistic perspective, it's like how information travels, how it becomes distributed.

[2208] It's interesting.

[2209] What do you think about Twitter?

[2210] I'm always conflicted on Twitter because I almost hate how much I enjoy using it because I'm like this is like this mindless bird app.

[2211] is consuming my time.

[2212] It's this incredible networking tool.

[2213] But what's weird is, when I think about my own presence on Twitter, they've almost made it too easy to, like, say something that you've half thought.

[2214] Like the friction to send a tweet is so much less than, like, if I'm going to make a YouTube video, there's several points at which I'm like, well, what's the other side?

[2215] What's this?

[2216] There's no friction there.

[2217] And so one thing I've noticed is everyone I follow on Twitter.

[2218] a lot of them after reading all their tweets I think nothing more of them nothing less of them but there's a lot of them that I think less of and I don't think I've ever had an experience where I've read someone tweets and I think more of them in a way and I'm like what does that say that yeah what is that like there's so many people I admire that the worst of them is represented in Twitter like there's a lot of people There's a million examples.

[2219] They become, like, snarky and sometimes mocking and derisive and negative and, like, emotional messes.

[2220] I don't know.

[2221] Yeah, what is that?

[2222] Maybe we shouldn't criticize it and accept that as, like, a beautiful, raw aspect of that human being, but not encompassing, not representing the full entirety of that human being.

[2223] But it does reflect, like, it's impossible to not reflect it to some extent, or you'd have to counter that bias really carefully.

[2224] because that is them.

[2225] It is a thought they had.

[2226] It's just probably something that should have been an unexpressed thought, perhaps.

[2227] So, yeah, I kind of wonder, like, my, I'm like, should I be on Twitter?

[2228] But the problem is, is it's such a great place where so many, like, so much of the news happens on Twitter, so much of the journalism breaks on Twitter.

[2229] Even people in the New York Times, they'll tweet their scoop.

[2230] And they'll, like, they'll put that out on Twitter first.

[2231] So it's this really weird thing where I'd love to be off it, and it's, like, too useful for my job, but I kind of, I kind of hate it.

[2232] No, no, you need to, well, it depends, but from my perspective, you should be on it.

[2233] Oh, I definitely am, yeah.

[2234] So, like, a coffee ziller should definitely be on Twitter, but have developed the catalysts and the strength to not give into the sort of the lesser aspects, like, because you're like a, you're silly, you're funny.

[2235] You could be cutting with your humor.

[2236] I wouldn't give into the, like, the darker aspects of that, like, low effort negativity.

[2237] If you're, the way you are in your videos, I would say if you're ever negative or making fun of stuff, I think that's high effort.

[2238] So I would still put a lot of effort into it, like calmly thinking through that because, and also not giving into the dopamine desire to do, to say something that's going to get a lot of likes.

[2239] You know, I have that all the time.

[2240] You use Twitter enough.

[2241] You realize certain messages that are going to get more likes than others.

[2242] And are usually the ones that are extreme, more extreme.

[2243] Yeah.

[2244] And like emotional like Lex is an idiot or like Lexism, the greatest human being ever.

[2245] It's much better than, oh, wow, what a polite, nuanced conversation.

[2246] I can tell you right now which of those three tweets it isn't going to perform well.

[2247] Yeah, yeah.

[2248] So I think extremes are okay if you believe it.

[2249] I will sometimes say positive things.

[2250] I said that the Twitter files released was historic.

[2251] Of course, this before I realized, I mean, the reason I said it is not, is because the transparency.

[2252] It's so refreshing to see some annual level of transparency.

[2253] And then, of course, those kinds of comments, the way Twitter does, is every side will interpret it in the worst possible way for them and they will run with it or some side when it's political yeah one side will interpret yes I agree with the Lex they might not have even read the article they just like they literally or the tweet thread and they're just like it is historic because Hunter Biden was finally the collusion or whatever it is and then the other sides is like no it's it's a nothing burger but yeah that that aspect of nuance and it's frozen in time even with editing there's a so tough it's tricky but if you maintain a cool head through all of that and hold to your ethics and your ideas and use it to to spread the ideas which you do extremely well on youtube i think i think it could be a really powerful platform there's no other platform that allows for the viral spread of ideas it's unique than any than um this and this is where Like, especially with Twitter spaces, I mean, where else would I see, I think, twice impromptu conversations with coffees alone, SBF?

[2254] Like, never.

[2255] Yeah, nowhere else.

[2256] Because he wasn't going to come on my show.

[2257] He wasn't going to come on some big prepared thing.

[2258] It's like, hey, yolo, let's go on a Twitter space.

[2259] And I, like, pop up.

[2260] And you know, it's funny.

[2261] And this, I hope this release is late enough.

[2262] Or, well, SPF probably won't see this.

[2263] Although I'm sure he's a phone.

[2264] And unfortunately, unfortunately he will.

[2265] Oh, okay.

[2266] Yes.

[2267] Well, hopefully I'll have time to enact my little plan.

[2268] But I'm hoping if he goes on any future spaces, I can, like, haunt him from interview to interview, which is like, I keep showing up.

[2269] And he's like, I hate this guy.

[2270] But I think he's already kind of probably has, like, PTSD of like, in the shadows lurks of coffee zilla.

[2271] That just would just, it's just like, that really amusing.

[2272] This is me. I mean, there's a, I think he honestly would enjoy talking to you.

[2273] There's an aspect of Twitter spaces that's a little uncertain of like, what are we doing here?

[2274] Because there's, there's an urgency because other voices might want to butt in.

[2275] Exactly, exactly.

[2276] If it's an intimate one -on -one where you can, like, breathe, like, hold on a second.

[2277] Yeah.

[2278] I think it's much easier.

[2279] So that sense, square space is a little bit negative that there's too many voices, especially if it's a very controversial kind of thing.

[2280] So it's tricky.

[2281] But at the same time, the friction, it's so easy to just jump in.

[2282] Yeah.

[2283] So I can just, I mean, I could, I mean, you just imagine like a Twitter space with like Zelensky and Putin.

[2284] Like, how else are these two going to talk, right?

[2285] Like, can't you imagine?

[2286] If you try to set it up on Zoom, like it never happened.

[2287] It's never happened.

[2288] Too many delegates.

[2289] Like, the only way it happens.

[2290] Putin, like, sitting there like.

[2291] Zelensky's live.

[2292] Just live, right.

[2293] Just jumping in.

[2294] It's hilarious.

[2295] Let's go Russian Okay.

[2296] Actually, just in a small tangent.

[2297] So how do you have a productive day?

[2298] Do you have any insights and how to manage your time optimally?

[2299] Yeah, I mean, I've gone the gamut from obsessive time tracking in 15 -minute buckets to kind of like the other extreme where it's more kind of like large -scale, some deep work here, two -hour bucket, account for an hour of lunch and some other thing.

[2300] But now, now I just roughly, because I manage a team and there's some things that kind of come up, it's only a team of two.

[2301] It's not like big, but I just have things that are not necessarily controllable by me. I like have to take some meetings or whatever.

[2302] It's not as easy to plan out my day ahead of time.

[2303] So I do a lot of retrospective time management where I look at my day, and that's what I mostly do now.

[2304] And I account, did I spend this day productively?

[2305] What could I do better?

[2306] And then try to implement.

[2307] minute in the future.

[2308] So a lot of this, I realize, is very personal for me. I do very well in long streaks of working.

[2309] And if I, I can't do a lot of work in 15 minutes.

[2310] I can't do a lot of work in even an hour.

[2311] But if you give me like three hours or five hours or six hours of uninterrupted work, that's like, that's where I get most of my stuff done.

[2312] So from the, it just, it'd be fun to explore those when you did 15 minute buckets.

[2313] So you have a day in front of you, and you have like a Google sheet or a spreadsheet or something.

[2314] Yeah, I didn't Excel.

[2315] And you're, do you have a plan for the day or do you go, like when you did it, or you just literally sort of focus on a particular task and then you're tracking as you're doing that task of every 15 minutes?

[2316] Yeah, I would kind of do it live.

[2317] I'm not, so one of the reasons I'm so obsessive about it is because I'm not organized by nature and I lost, like in college, I learned.

[2318] how much lack of organization can just hurt you in terms of output.

[2319] And so I realized, like, I just had to build systems that would enable me to become more organized.

[2320] So, really, I think that, doing that really taught me a lot about time in the same way that tracking calories can teach you about food.

[2321] Like, just learning, accounting for these things will give you skills that eventually you might not need to track on such a granular level.

[2322] because you've kind of like figured out.

[2323] So that's kind of how I feel about it.

[2324] I think everyone should, if you care about productivity and stuff, should do a little bit of it.

[2325] I don't think it's sustainable in the long term.

[2326] It just takes so much effort and time to like, and I think the marginal effect of it in the long term is kind of minimal once you learn these basic skills.

[2327] But yeah, I was basically tracking like live what I did.

[2328] And what I saw is that a lot of my real work would be done in small sections of the day and then it would be like a lot of just nothing like a lot of small things where I'm busy but little is being achieved and so I think that's a really interesting insight I've never figured out how to unbusy myself and focus on the like core essentials I'm still getting to that but it is interesting realizing most of your day is like a lot of nothing and then like some real deep work where most of your value comes from is like 20 % of your day yeah I tried to start every day with that so the hardest task of the day and you you focus for long periods of time.

[2329] And I also have the segment of two hours where it's a set of tasks that I do every single day.

[2330] The idea is you do that for like your whole life.

[2331] It's like long -term investment of Anki and it's just like learning and reminding yourself of facts, you know, they're useful in your everyday life.

[2332] And then for me, also music.

[2333] I'll play it a little bit of music.

[2334] Play it piano.

[2335] Piano.

[2336] And so like keeping that regular thing as part of your life.

[2337] And one thing that I've really taken from this is because I've read all the like, I had a self -improvement phase in my early 20s.

[2338] And one thing you learn is that everyone wants to give you a broad general solution, but really the real trick of figuring out like optimizing is figuring out the things that work for you specifically.

[2339] So like one interesting thing you said is like, oh, I like to do my hard work at the beginning of the day.

[2340] I know a lot of people recommend this.

[2341] I've tried so many times, and I just do better work late at night.

[2342] And so usually my streak of work is like from like after dinner, 7 .30 to like 2 a .m. That's my prime time.

[2343] And so like a lot of my videos, which you'll see, which is like lit from this studio, which appears to be daytime, it's like shot at 3 a .m., you know, just like in a caffeine -fueled rush.

[2344] But that's kind of how it works for me. And then also, like, with the social outlets and stuff like that, which it's easy, and I know, I feel like we think similarly on this.

[2345] So it's easy to discount these things as less relevant because they don't have quantitative metrics associated with them.

[2346] But in terms of longevity and, like, I think to be able to do creative work, there's an amount of recharge and, like, re -inputting stuff that is frequently discounted by people like us who are like, obsessed with, you know, quantitative metrics.

[2347] And so I really found that some of the my best work gets done after I take like a break or I'll go play like live sets of music.

[2348] And I mean, like that's like for me really recharging.

[2349] But nowhere on a spreadsheet is that is that going to show up as productive or like meaningful.

[2350] But for me, for whatever reason, it recharges me in a way that like I need to pay attention to.

[2351] Yeah, for sure.

[2352] I usually have a spreadsheet of 15 minute increments when I'm socially interacting with people and I evaluate how I'm getting roasted right now no I'm not it's actually I probably roasting myself but I do find that when I do have social interactions I like to do with people that are in outside of that exceptionally busy of themselves because then you understand the value of time and when you understand the value of time your interaction becomes more intimate and intense.

[2353] Like, the cliche of work hard, party hard, or whatever the cliches.

[2354] Play hard, damn it.

[2355] Whatever.

[2356] The more social interaction.

[2357] No, I'm just kidding.

[2358] That, I mean, that cliche, there's a truth to that, but the intensity of the social interaction, even like, you know, it's not even the intensity, like, it's not even the party hard.

[2359] It's like, even if you're going hiking and relaxing and taking in nature.

[2360] So it's very relaxing.

[2361] So it's but you understand the value of that.

[2362] When you put a huge amount of value on those moments spent in nature, that recharges me much more.

[2363] So you have to surround yourself with people that think of life that way, that think about the value of every single moment.

[2364] That's one of the things you do when you break it up in 15 -minute increments, is you realize how much time there's in the day, how much awesomeness there's in the day to experience, to get done, and so on.

[2365] And then so you can feel that when you're with somebody.

[2366] And then for me personally, like when I interact with people, I really like to be fully present for the interaction.

[2367] I can tell this is, for anyone who had, you know, I've been the audience forever.

[2368] So I haven't been on the side of the table before.

[2369] You're very intense.

[2370] You look right in the eye.

[2371] Well, I don't know about right in the eye.

[2372] Eye contact is an issue.

[2373] But yes, I'm there.

[2374] Lex has a soulful gaze, guys, just in case you're wondering, it's very soulful.

[2375] All right.

[2376] It's like a warm hug.

[2377] Back to serious talk.

[2378] Okay.

[2379] you've you've studied a lot of people who lie who defraud uh cheat and scam on a basic human level um how do you have trouble trusting human beings in your own life uh how what's your relationship with trust of other humans is a great question so funny enough before i did this i was like an incorrigible optimist i everything the sunshine every which place I always saw like everybody is fundamentally good, nobody was bad it just was like sort of wrong place, wrong time, bad incentives that view has darkened significantly but I just try to remember my sample set and just like I'm just sampling sort of the worst and I try not to let it bleed into my day to day life and I think I've I think it's probably because I was such an optimist early on that I've I've been able to kind of retain some of it.

[2380] I call it enlightened optimism, like choosing to be optimistic in the face of a realistic sense of the problems in the world and with a realistic sense of like the scale and the challenge ahead.

[2381] I actually think it's much braver to be an optimist when you're aware of what's going on in the world than to be a cynic.

[2382] I think being a complete cynic is maybe, I'm not saying it's really.

[2383] I'm not saying it's wrong but i'm saying it's maybe the easier way just mentally to cope with so much negativity it's like just saying well it's all bad it's all doomed to fail it's all gonna go bust is easier yeah that leap into a believing that's a good world is um it's a little it's a little baby act of courage or at least i think so i don't think it's naive no it can be some people are naive that are optimistic but but oftentimes um just because someone's optimistic does not mean they're naive they could be be full well aware of how troubling the world is and i also believe some of the people you study you know i'm a big believer that all of us are capable of good and evil um so in some sense the people you study are just uh the successful ones, the ones who chose sort of the dark path and were successful at it, and I think all of us can choose the dark path in life.

[2384] It's, that's like the that's the responsibility we all carry is we get to choose that at every moment.

[2385] And it's like a big responsibility.

[2386] And it's a chance to really have integrity.

[2387] It's a chance to stand for something good in this world.

[2388] And all of us have that because I think all of us are capable of you all of us could be good germans all of us could in atrocities be part of the atrocities yeah i think it's i really have um especially in recent years tried to somewhat depersonalize my work and um see it almost like as like a i don't know like a force of nature that i'm fighting more than like individuals because of this exact thing I think like sort of therefore, but the grace of God there go I is kind of a really profound way to understand yourself rather than it's just like fundamentally good and like full of integrity, acknowledging that so much of that is a product of your environment and your family and your upbringing and so much of the people who don't have that is a product of their environment.

[2389] It doesn't absolve them, but it gives you more perspective to try.

[2390] like to sort of deal fairly if that makes sense and not approach it from a place of anger or a place of outrage there is a sense of like sadness for the victims there's a sense of outrage for the victims but approach the individual who's done the thing from that place of understanding of this isn't just this person there's like a whole broader thing going on here do you have advice for young people of how to live this life how to have a career career they can be proud of.

[2391] So high school students, college students, or maybe a life that can be proud of.

[2392] It's a great cool.

[2393] Well, let me think about this for a second.

[2394] I think, don't be afraid to go against the grain and sort of challenge the expectations on you.

[2395] Like, you sort of have to do this weird thing where you acknowledge how difficult it will be to achieve something great while also having the courage to go forward.

[2396] for it anyways.

[2397] And understanding that other people don't have it figured out, I think is a big theme of my work, which is that everyone wants like the guru to show them the way, to show them the secrets.

[2398] So much of life and achieving anything is learning to figure it out yourself and like the meta skill of being an autodidactic where you can, I don't know if I said that word right, basically you self -teach.

[2399] You learn the meta skill of like learning to learn.

[2400] I think that's such an underrated aspect of education.

[2401] People leave education.

[2402] They go, when am I going to use two plus two?

[2403] When are I going to learn, you know, use calculus.

[2404] But so much of it is learning this higher level abstract thinking that can apply to anything.

[2405] And getting that early on is incredibly powerful.

[2406] So yeah, I would say like a lot of it is, I guess, to some extent, like you kind of have to do that Steve Jobs thing where you realize that nobody else in the world is smarter than you, and that both means that, like, they can't show you the perfect way, but it also means you could do great things and kind of chart your own path.

[2407] I don't know.

[2408] That's so cheesy.

[2409] This is why I hate giving advice.

[2410] I feel like it's cheesy.

[2411] I mean, and I don't think it is.

[2412] I think my journey is so full of luck and, like, specific experience.

[2413] I wonder how generalizable it is, but if I've learned anything and if I could talk specifically to myself, I guess that's what I would say.

[2414] I mean, you've taken a very difficult path.

[2415] And I think part of taking that path, like of a great journalist, frankly, is like, I can be, I can be that person.

[2416] Like, just believing in yourself that you could take that.

[2417] Because, like, if you see a problem in the world, you could be the solution to that problem.

[2418] Like, you can solve that problem.

[2419] I think that's, like, it's really important to believe that.

[2420] It depends.

[2421] Maybe you're lucky to have the belief inside yourself.

[2422] Um, maybe the thing that you're saying is like, don't look to others for that strength.

[2423] And also, and also like be really comfortable failing.

[2424] I think, um, one of the best things that, like, you would never know about me, just looking at my background that helped me was playing music live.

[2425] I had incredible amounts of stage fright.

[2426] Yeah.

[2427] Growing up, mostly because I was terrible at piano.

[2428] I was like, sucked.

[2429] And I specifically, I taught myself how to play, and I joined jazz band in high school, did it through college.

[2430] I remember all my recitals, I messed up every single solo I ever did.

[2431] I never, like, actually nailed it.

[2432] And every time I'd go up there, I'd, like, have so much dread around this.

[2433] And it was easier to get up there because there were sort of some people up there.

[2434] But eventually, I started, like, playing live, too, and I sucked at that.

[2435] And I've just gone through the trenches of, like, just, like, being publicly sort of, in my mind, humiliated, that prepared me so much for what I do now of trying to basically being fearless of failure in the face of like a wide audience.

[2436] I don't have that anymore because kind of I've experienced so many iterations of it at a smaller scale of just like abject public humiliation to where it's like not something that bothers me. I have no stage fright that doesn't bother me anymore.

[2437] But you'd think like, oh, maybe he just was always good at this.

[2438] was terrible.

[2439] I had a complete phobia about public anything.

[2440] So it was that rapid iteration of just failure.

[2441] And eventually I just like came to the conclusion of like I want to love it.

[2442] I want to like love like getting up on a stage and bombing.

[2443] If you can learn to like love that and be fearless there, there's almost nothing you can't do.

[2444] Yeah, that's brilliant advice.

[2445] I'm with you.

[2446] Still terrifying to me like live performance.

[2447] But yeah, that's exactly the feeling is loving the fact that you tried and somehow failure is like a deeper celebration of the fact that you tried because success is easy but like failure is like bombing i mean music yeah on small scale on the smallest and the largest of stages i'm not going to say who but there's a huge band huge band that wanted to be on stage and it probably probably will happen, but like, but I turned it down because I was like, no. Terrified.

[2448] Because I'm going to suck for sure.

[2449] So the question is, do I want to suck in front of a very large live audience?

[2450] Yeah.

[2451] And then I turned it down because I was like, no, no, no, no, no, no. But now I realize, yes.

[2452] Embrace it.

[2453] It's going to be good.

[2454] It's going to be good for you.

[2455] It's going to crush your ego to the degree it's remaining.

[2456] And it's just good for you.

[2457] It's good not to take yourself seriously and do those kinds of things.

[2458] But honestly, I feel that way in an audience, like in an open mic.

[2459] It hurts.

[2460] That's why I really admire comedians.

[2461] I go to open mics all the time with comedians and musicians, and I just see them bomb and play in front of just a few folks, and they're putting their heart out.

[2462] Especially the ones that kind of suck, but are going all out anyway.

[2463] I think open mics are the best place to learn, though, because it's the lowest stakes you can get while still being public.

[2464] If you're going to face fears around this, because we're talking very specifically, like, public speaking or any kind of like, you know, being in front of a camera, if you're going to face your fear, you have to do it.

[2465] And the easiest way to do it is to lower the stakes.

[2466] You're not going to start being Lex Friedman on stage with a huge band.

[2467] You don't want to be.

[2468] Like, it's like in that way, it is so impossible.

[2469] but the more you lower the stakes and just like open it up to like two strangers five strangers like the most dive bar open mic you can go to and like start performing that's that's really what I did is like like I love open mics now because it's like low stakes on the one hand but you really get the feeling of like going for it and get better and better and better at that yeah for sure and then you'll get the strength to take bigger and bigger and bigger risks Listen, coffee, I'm a huge fan of yours, not just for who you are, but for what you stand for.

[2470] People like you are rare, and they're a huge inspiration.

[2471] I'm inspired by your fearlessness, that you're taking on some of the most powerful and richest people in this world and doing so with respect, I think, with good faith, but also with the boldness and fearlessness.

[2472] Listen, man, I'm a huge fan.

[2473] Keep doing what you're doing.

[2474] as long as you got the strength for it because I think you inspire all of us.

[2475] You're doing important work, brother.

[2476] Thanks for having me. Thanks for listening to this conversation with Coffee Zilla.

[2477] To support this podcast, please check out our sponsors in the description.

[2478] And now, let me leave you with some words from Walter Lipman.

[2479] There can be no higher law in journalism than to tell the truth and to shame the devil.

[2480] Thank you for listening and hope to see you next time.