The Subject
Ben McKenzie was famous. So were the people flogging worthless cryptocurrencies to their online fans. That frustrated him, and led him to suspect that people were being conned — a worry that was validated just a few months after the star of “The O.C.,” “Southland,” and “Gotham” started writing about it.
That story is told in “Easy Money,” an instant best-seller written with Jacob Silverman, and published as investors (and celebrities) sheepishly back away from crypto.
The Interview
Semafor: What did you see in people like Sam Bankman-Fried that you were surprised to see other people miss?
Ben McKenzie: My bullshit meter is pretty sensitive. Having spent 20 years in showbiz, I’m fairly aware of when people are lying to me, in ways both big and small. So I think about the story of Sam on that Zoom call with investors — he’s trying to raise money while he’s playing a video game, and they were incredibly impressed.
Why? They’re venture capitalists, so they’re supposed to take these wild risks — they’re all competing with each other in order to produce these monster home runs. The truth is, if you swing for home runs all the time, you’re gonna strike out a lot.
Americana: Before the collapse last year, Congress was moving legislation to regulate cryptocurrency. How many politicians, in your reporting, understood crypto?
Ben McKenzie: Almost none of them. They barely even understood what the hell this was to begin with. All they understood was the real dollars coming in. And given the amount of money that the crypto industry gave to them in the height of the mania in 2021, it’s not surprising that Sam and others made a lot of headway. Just last week they’re getting a bill out of the House Financial Services Committee. That’s not good, but it’s because the money’s still there.
Americana: How much do the true crypto believers believe they can replace fiat currency, still?
Ben McKenzie: If you got in early on Bitcoin — early meaning as late as three or four years ago — then even with the price having gone down from its highs, you still made a ton of money. If you happen to make a ton of money in something, you start justifying it and believing in it. I don’t think libertarians aspire to create a place where people are locked up all the time, like El Salvador under Bukele, but it’s the only country that adopted Bitcoin — they have to either excuse it or ignore it. You see that an awful lot in crypto.
Americana: One argument for crypto that I hear from Ron DeSantis and Robert F. Kennedy Jr. is that you need currency that the government can’t seize or control. That reminded me a bit of what you write about the popularity of crypto as a way to get money out of China.
Ben McKenzie: I think it’s a terrible idea. If you have a problem with our democracy, you can try to fix it, or you can undermine it, by creating private money — which, of course, is a failed idea that we’ve tried before. The political selling point is just, ‘Bitcoin equals freedom.’ It’s really that straightforward, and pretty much that dumb.I think it appeals to an increasingly small percentage of the public that is still holding on to Bitcoin. They get radicalized and blame the government, because if these things blow up, it’s going to be the government sending people to jail.
It’s all just salesman tactics, right? That’s all trying to give you FOMO. You only have a limited amount of time, right now, to fight the government by buying Bitcoin. The Trump MAGA stuff has become deeply ingrained in the people that they’re targeting — and they’re targeting their own people!
Americana: Why wasn’t there more of a contagion, affecting the rest of the economy, after FTX collapsed?
Ben McKenzie: We seemed to be getting close to that. Had Sam’s bill gotten further, had it passed, I think you would have seen more collateral damage. Three banks went down, but the government came in and smoothed things over — and they weren’t huge banks. But why didn’t it get worse? One reason is that the numbers in crypto aren’t real. There was never $3 trillion there, right? It’s more in the line of hundreds of billions, and maybe that’s even overshooting, in real money that went into the system. If it hasn’t already been spent or laundered thoroughly, you’ll never find it. That’s a lot of money, definitely bigger than Madoff. But it’s not going to take down the U.S. economy.
Americana: If you were Gary Gensler, what would you do to regulate crypto?
Ben McKenzie: By the time he got there, in April 2021, Coinbase had just gone public. The CFTC and the SEC are working, but they’re domestic, they don’t have an international scope, and Sam had set up shop in the Bahamas. Things needed to blow up so that the regulators could swoop in. I don’t think there was a lot of incentive for them to come in at the height of the bubble, and then potentially be blamed for a crash. The bubble needed to burst.
Americana: What I mean is: What would you do in that role, or with even more power to regulate this stuff?
Ben McKenzie: If I could wave a magic wand, I would be like: Okay, everything’s a security. At least everything other than Bitcoin.I don’t know if my magic wand extends to Bitcoin or not. Once these coins are properly classified — good luck. Are you going to fill out your disclosure forms and say: Okay, our Q1 revenue was zero, our Q2 is zero, our Q3 is zero? There’s no product, there’s no good, there’s no service. So as soon as they’re properly classified as securities, like the question for people becomes, what are you buying into? Is this a Ponzi scheme?
Americana: You write about your despair when Matt Damon started advertising crypto. I identify with that. What do you think celebrities who pitched crypto and NFTs owe to the people who bought it? They haven’t said much.
Ben McKenzie: Maybe that’s on advice of counsel, I don’t know. But it’s really a shame. I mean, I’ve heard from celebrities, both publicly and privately. Celebrities are people too. You can make a mistake. I don’t think that means that you’re culpable. You’re not admitting that, like, you knew what you were doing was wrong. You’re saying like, hey, they waved money in my face, I didn’t think about it.
Maybe they’re quiet for legal reasons. But maybe they think we’ll forget, and that’s what they’re banking on. I definitely want to see what happens with these class action lawsuits.
