Daniel Roberts - Editor in Chief at Decrypt | FTX, Binance, and the Future of Crypto

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Today, my guest is Dan Roberts. Dan is the editor-in-chief of Decrypt. He first wrote about Bitcoin in 2011. He spent five years at Fortune and five years at Yahoo Finance and has written for a wide range of other publications, including Sports Illustrated, Time Vice, The Wall Street Journal, Air Mail, The Guardian, The Paris Review, and Dead Spin. He is the co-author of the 2013 book Zoom. He had a supercharger career, and he only owns one Bitcoin, Lesson 5, F, and a few NFTs. Now, we spoke about the current state of Web 3. What happened with SBF, FKX, CZ, and Binance? The current state of crypto lobbying in DC, how crypto companies are working with regulators, centralized versus decentralized crypto, and the problem with DeFi. Yeah, well, I always do I want to be a journalist. Almost to the point where it's probably a pretty boringly linear path. I always think it's interesting when you talk to people and they say, I was pre-med, I wanted to be a doctor, that was my whole life plan, and then I in college, I took one course on geology, and it was required to fulfill a criteria, and I said, I'm going to go be a geologist. It's like, that was not me. I knew starting in middle school that I wanted to write for magazines when I grew up. I basically just followed that path. I was an English major right out of college, I went to journalism school, I ended up a pretty quickly unfortunate magazine. I had never planned to do business reporting. It was always a arts reporting that interested me, like pop culture, books, movies, but Fortune was where I landed a gig, and so I started doing sports business, and then tech, and almost everyone at some point catches the tech bug and just becomes fascinated by what's going on in technology, especially if you use this stuff, right? I think that's when things crystallize for me. At Fortune, I sort of realize everything is business. I think a lot of people have a certain image that if they think about business or finance, they imagine looking through P&Ls and big publicly traded companies and stocks, and maybe they don't understand that, and revenue and profit, and maybe it's confusing or overwhelming, but every single thing that might interest you is a business. I mean, pro sports is a business. Hollywood and entertainment, social media, everything we do, that's a business story. Being at Fortune for almost six years, and then I went over to Yahoo Finance, and I was also there for almost six years, you discover that if you're covering business, that's such a broad umbrella that it has its tentacles in everything. So that's sort of part one, and then part two was I first wrote about Bitcoin in 2011, and I wouldn't say I caught the bug in terms of investing in it or promoting it. I mean, I'm not necessarily like a Rah-Rah Bitcoin is going to replace the dollar. I just think that it's really cool and interesting and a fascinating convergence of a lot of things. It's finance, it's tech, it's people who originally were trying to be outside government control, of course now that has changed, and government is totally putting its hand in this, but so many different areas of business and society have converged when it comes to trying to use cryptocurrency and blockchain to improve certain industries. So I think that was a big moment for me was discovering, I find this very interesting. I want to become an expert in it right about it, but also here's the key Scott, explain it to other people, because now that you've got a huge funnel of people who are trying to understand crypto, there's still a lack of resources for them to actually figure out, well, what is the tech here and how does it all work? Instead, you just tend to see like screaming headlines that Bitcoin is tanking or Bitcoin is up big today. So I love explaining it to a layperson audience. So I think that's actually like the secret sauce and being a good journalist, and actually you even mentioned that business permeates almost anything you care about. I look at somebody who does a really great job of sports journalism and business at Joe Pompliano. I see his Twitter all the time and he kills it. So the ability to take some of these more nuanced concepts and distill them down to a form that really is understood so you can really communicate a clear message. That's important and obviously business finance, but it's even more important in crypto because crypto is quite confusing for a lot of people for sure. Since 2011, I still feel like it's not clear. And even before we had this call, we were joking about how it comes in cycles, right? Like when there's a news headline, like we're going to talk about today, everybody cares about it. Or when I say everybody, mainstream media cares about it. And when there isn't a major event, then it seems to sort of dissipate. So how do you do a good job of taking like a very complex concept that I think for most people, is there a comparable? Is the internet, I guess maybe the dotcom a comparable but still not even. And how do you take that? And how do you report on it in a way this meaningful and impacts people and educates people? And this is obviously what you're doing at the crypt. And how did you do it so that you stood out above the rest? Yeah. Well, that's the biggest sort of existential question about everything we do. And you know, my approach at the crypt has been that just because we are a website that covers news about crypto does not mean that we are proselytizing for the industry. You know, a lot of crypto media sites have a basic voice of crypto is so awesome. And here's the news today and isn't it awesome? And this coin is going to go up and you should buy this coin. We don't do that. We don't dispense investment advice. I view it as especially during the pandemic, you know, crypto became so super powered and interesting and it blew up so big and it went so mainstream that it's no longer very niche. We cover crypto the same way that I covered stocks at Yahoo Finance. And that means that we cover the good, the bad, and the ugly. That's the way I phrase it. So, you know, if Coinbase, which is one of the biggest companies in the space, it's, you know, publicly traded now. It's very well known. It's a household name in the US. If Coinbase stock goes up big one day because of a new business division and it announces, we cover that. But then if Coinbase launches a new vertical like Coinbase NFT and it's a rocky launch that gets mocked and gets no users, which is what happened, we'll cover that. You know, we covered the good, the bad, and the ugly. And what I say to our staff is everything should be written so that it's in plain English for a layperson. And that's the whole reason that I left Yahoo Finance to come around decrypt is basically, you know, there's a larger funnel than ever of people I call the crypto curious. And maybe they're at an understanding level of zero and they don't know anything about crypto, but they've seen some headlines and they want to understand it better. Maybe they're at an understanding level of one or two. They've bought a little bit of Bitcoin. They've heard about DeFi. They're not quite sure how Ethereum works, or a lot of our audience. They're totally, you know, crypto degens, they live and breathe this stuff, they know everything. We are talking to all of them at once, but it's always important to me that we not be using a ton of jargon, a ton of acronyms, we define our terms. Any story on our site should at least be readable and understandable to someone who is not yet an expert. And I think that's, you know, part A of the challenge and then part B is like, is it actually interesting for a broad audience? I mean, there's tons of stuff happening in the crypto industry every day that we skip, you know, that we don't cover. I think there's a lot that we choose not to cover because we have a small staff, although we do a lot with our staff size. So I always say to our writers like, okay, this is news. Every day there's a lot of news to choose from, but is it also interesting and interesting to a large audience? So that's at least how we approach it. And I'd like to think that, you know, among the big crypto news sites, we have a pretty good reputation as being like the adults in the room. You know, I've even heard some folks at the big legacy finance publications say that they kind of use us as a cheat sheet when they're trying to self-educate, which is fine. Sometimes it's a little frustrating, you know, but I was well aware of that that I think many of them kind of checked. You crypt first for a gut check. I'm like, how does this stuff work? Okay, like, is this big news? Does this actually matter? Okay, yes, yes it is. And even like walk me through, walk me through your decision to to jump ship and to move into like, call a crypto blockchain default, like that category of, you know, because where did you come from? You wrote for so many places. Was it Yahoo Finance? You came from and then you made a career decision to move into decrypt? Yeah, well, I first wrote about Bitcoin back in 2011. So very early. I mean, nowadays you'll hear people say, like, oh, I'm, I'm, or I was early in the space, or I'm an OG. And they say, I got into crypto in 2019. It's like, that wasn't that early, you know, I mean, that was a while ago now, but 2011, and it was because the Silk Road, the Fiasco had just happened, which is, you know, one of the best, you know, crypto. Another big story is actually happening with that right now too. Totally. So that was 2011. But then I continued to cover, but it was never my only beat. So when I was a Yahoo Finance, I did a lot of on camera hosting and, you know, every day, I hosted a show where we were talking about all kinds of stuff, Netflix, you know, Amazon, Tesla, all the biggies. We would do bank earnings, oil prices, everything, all kinds of wonky stuff. But I always tried to slip in a little bit of crypto too. And I think I was hesitant to go to an actual full-time crypto news site because I saw it as kind of niche. And then in early 2021, I decided like, okay, this is not niche anymore. I mean, this has gone totally mainstream. We know what happened during the, the first year of the pandemic, right? Like the retail investor revolution, game stop, Reddit, Wall Street bets, all this stuff is related, right? Like there was a big movement happening at once and crypto was a big part of that. And you saw Square, which is now called Block and Robinhood and PayPal all go in on embracing crypto. And I thought, okay, this is more interesting than it's ever been. So I'm down to go to a website that just covers this stuff full-time. And it's been great. I mean, it's been a lot of work because I manage a whole editorial team, but it's been, it's always interesting, which I think is really important in work. I mean, I know you talked to a lot of people about their careers. It's just so important to actually find what you're doing every day interesting. And I know that's not always easy for people. But I'm very lucky to like, I enjoy every day because every day is different. And I'm actually very curious to work in, to work in a, in a company that focuses on one industry that is candidly very cyclical. Like it really just rises and falls at the price of Bitcoin. And then maybe there's a few outlier edge case stories from a business perspective, because you're the one who's who's managing a lot of the day to day. How do you, how do you navigate like the business opportunity? Like even like the revenue does it fluctuate wildly? Like I'm just curious about building a business in crypto, in DeFi and blockchain in 2022. What does that actually mean? Yeah, well, you should also talk to our commercial head, Alana Roazzi Laforay, because she comes from the digital ad selling space and she has just done huge things on her business side. But the company has really grown. I mean, DeCrip started it back in 2018 and it was just, you know, three people and it was just a news site. And now today we really have grown. I mean, we have 30 something full-time employees, we're fully independent because we spun out from our former parent company. We raised 10 million back in April. So that was really exciting. And you're right. Like what's really cool, I think, is working so closely with our commercial side because almost everything we do affects all the verticals of the company. So there's, you know, editorial, that's me. There's commercial, which is the business side and that's sponsored content, live events, working with clients on NFT drops and metaverse real estate doing all kinds of interesting things. And then there's product, which is the tech team. And we have, you know, beautiful web design and a great mobile app. And all the time, we're doing a lot of experimentation. So, you know, shorter way to answer question is you try a lot of new things when you're in Web 3. And our biggest priority is we're not just a news site that covers Web 3, you know, on the outside looking in. We're also a Web 3 business, you know, when we raised 10 million dollars back in April, I was proud of the fact that we had 22 different investors and it was of all different types. Like, yes, there were some traditional VC firms, but there were some angel investors and then there were some doubts that participated. So showing that we're a Web 3 organization, not just a new site that covers Web 3. So there's a lot of cool stuff we're doing. We have a media Dow that we stood up separately. We're doing live events. We're working on token gated stuff, you know, events where you get a discount or a free ticket if you own a certain NFT. So there's a lot, a lot going on on that side and you're right. Like, no one really wants to invest in a Web 2 media business anymore. I'm not sure if they ever did, you know, but almost ever in a decrypt believes there's got to be a better way for media businesses to make money than just either being owned by a billionaire, right? Like Bezos has the post and John Henry, the owner of the socks has the Boston Globe and Pierre O'Mediar has the intercept and, you know, Mark Benningoff, now one's time magazine, there's got to be a better way than that. Or the alternative is like tons of horrible shitty banner ads that crowd the screen. So we've been trying to investigate, is there a way to use tokens or blockchain to come up with a better way for your most devoted readers to help support the site? So your business model is, you're not just, you're not just talking to talk, you're walking the walk. You really are building a whole business model around Web 3. Even now, I know that most of the organizations you mentioned, they are very legacy in how they monetized. I think Vice does a very cool monetization strategy, if not mistaken. But outside of that, I think to build a media company, it's very competitive. So you do have to, you do have to diversify, but we're talking about, okay, so we're talking about, you know, you're in the space, you know the opportunities. Talk to me, because you probably have a finger on the pulse of the industry, you probably understand sentiment about Web, let's just call it Web 3 bucket it like that. Yeah, so where does, what does the sentiment look like? When did people drop off after the Bitcoin price decreases? Do you notice website traffic? Do you have trouble getting people interested? Or do you notice that readership all the key metrics KPIs, they say relatively the same regardless, like where are we at in that sense? Yeah, well, so a couple of things are, first of all, in terms of the actual readership and I think everyone in crypto media experiences this, you know, the block, coin desks, those are two of our main competitors when it comes to kind of pure play crypto news sites. We all notice this trend when the coins are down, crypto people don't want to read about crypto, you know, it's kind of unsurprising. If things are down bad, it's like, no, this is too upsetting. Now, the exception is when something is happening in the news and everything's moving, traffic is great because people want to know, well, what's happening? Why is this happening? So as long as something is going on, we do great. What's bad for us is when things are just flat and it's kind of the doldrums, which as you said, it's a very cyclical business. I mean, A, that tends to happen in summer, even though crypto trades 24-7, which is wild. I mean, that's the biggest change for me from having left Yahoo Finance is like, if you cover stocks, your day is over at 4.30 for the most part. I mean, yeah, there's earnings calls, maybe they'll put put out a press release, a news dump at 5 p.m. But you can pretty much time your day. When you cover crypto, it never stops. I mean, there's no moment to catch your breath. So when there's big breaking news, like some company is going insolvent or Bitcoin's tanking, traffic is great. And then when things are moving, like basically almost all of 2021, traffic is great for that too. It sucks when things are just flat. And in fact, before this week, we had like six weeks in a row, where Bitcoin was so flat that people were writing stories of the fact that it was less volatile than the NASDAQ, which was interesting because all the people who are crypto skeptics, they say, oh my god, it's so volatile. It's so volatile. You can't trust it. It's actually stocks have website a lot more than Bitcoin had lately. Yes. That's the yeah. I mean, that's the answer on traffic. But then a second point just in general, I'm still to this day kind of fascinated by how many people seem like really triggered by crypto's existence. You know, for Bitcoin, it's been 13 years. And it's like in the big scheme of things, that's not that much time, but it's still, it's 13 years. It's not that new anymore. And a lot of people still, the most virulent skeptics still say, the whole thing could go to zero. And it's like, okay, yeah, some shit coins have gone to zero, but Bitcoin has never gone to zero. If, you know, eth is not gone to zero, that's very unlikely to happen. And they say, you know, it's a house of cars, or it's a scam, or it's a fraud, or it's tulip bulbs, you know, famously Jamie Dimon, Warren Buffett, Charlie Munger, who is Buffett's partner at Berkshire Hathaway. They've said some, you know, vicious things, you know, it's worthless. It's turds. And I, I do wonder like, you know, if it doesn't interest you, fine. And if you don't want to invest in it, that's great. That's fine. But I've always found it interesting just how much some people seem like upset by its entire existence. And I actually liked the way Matt Levine phrased this. He's a, you know, a finance columnist over Bloomberg. Most recently, business week devoted an entire issue to crypto, which they've only done like twice in their history is called the crypto story. And there was one point in his article where he basically said, I'm a little bit of a crypto skeptic myself. I'm not trying to convince you to buy crypto. And then he said something like, but I want to convince you that crypto is interesting. And that it has interesting things to say. And even when the things it says are wrong, they're wrong in interesting ways. And I thought that kind of nails it. Like you don't have to be a big crypto believer to at least acknowledge this is very interesting and probably here to stay. Like in 10 years, Bitcoin and Ethereum are still very likely to exist. I can't say the same for any of those other thousands of shit coins, but it is interesting to me how many people like get angry about crypto. You get very, you know what? I think it's, I think people get angry because they don't necessarily understand the people that get angry don't necessarily understand it. And I think that there's a little bit of foam on mixed with a little bit of jealousy, especially because people got wildly wealthy, like wildly wildly wealthy. And people that thought they figured out life and they thought they figured out finance and investment. And it's like, what the fuck just happened to these kids that are making tons of money? Like that would piss people off. Of course, that would piss people off. You weren't part of it. There was a famous, I don't know if you remember, but at the last peak. So before crypto got hot again during the pandemic in 2017, there was a New York Times story. And the image was two bros in Bitcoin-themed Christmas sweaters. And the headline was, everybody is getting hilariously rich except you. And then when crypto tanked in 2018, it was like, ah, I never reshared that story. And there's a lot that you can point back to now that looks like, oh man, you know, hindsight 2020. But I think you're right, it triggers a lot of people. I also think it's unfortunate that the image of Bitcoin to this day is still like Bitcoin bros, you know, who are like walking like this and they're wearing shirts to say, hotel. And the entire industry has really advanced and matured beyond that now. So I think another another reason why a lot of people sort of like look for gotcha moments in crypto and the biggest haters of crypto, they they point out the things that happen. And two stories happen this week. I mean, we can talk about, we can talk about whatever you want to talk about. But the two main stories obviously are one that sort of is the is a result of Silk Road, which the huge DOJ, I think was like 3.6 billion if I'm not mistaken. And they seized 3.6 from somebody that took that away from Silk Road. That's not a net positive story, obviously not. Like that's elicit funds that was obviously used to buy drugs and stuff on on, you know, a dark web marketplace. That's not a great story. And then everything that's going on right now with FTX. So maybe it's, I don't love the fact that these are both negative stories, but I think it's good to understand them. Yeah, 100%. And let's start with when the government is able to seize crypto because, you know, not just because of the new story this week, like bigger picture, the usefulness of this in terms of educating people is, I think a lot of people out there, especially people who've just decided they hate crypto. They have this image that Bitcoin is shady and mysterious and secret, and it's used for criminals and hackers. And it is, you know, used by hackers, you know, like they'll ask for ransom paid in Bitcoin. But it is also used for a lot of good things, you know. crypto has been sent as donations to Ukraine because it's faster and it's frictionless and people can convert more easily to their local currency and get help. There's all kinds of benefits. And, you know, even though it sounds like a sort of an argument that's made on the defensive, it's true that technology can be used for good or for real, you know. So whenever there are people who use Bitcoin in some illicit way or any crypto, the headlines go around again. And all the mainstream sites say Bitcoin and crime and people go, ah, Bitcoin is a tool for criminals. But it's like, well, it's a technology. The technology is agnostic, you know, you can use tech however you want. You can use dollars for money laundering and buying drugs and buying weapons, or you can use dollars for helping grandma, you know, like get a new walker or whatever it is. So what people should understand is that Bitcoin is actually not fully anonymous. They also think it's like shady and it's anonymous and criminals can use it to hide. What's anonymous than money? A hundred percent. I mean, it's really semi anonymous. I mean, you know, the way the Bitcoin blockchain works is that actually you can see the history of every single wallet and what it's done. In fact, I recently had the chance to interview Edward Snowden. And politics aside, you know, Snowden was saying that Bitcoin is not private enough in his view. You know, he's, he likes Bitcoin in theory. He loves that it exists. He thinks Satoshi, whoever that person or persons, did a wonderful thing for the world, but it doesn't go far enough. And what people should understand at a very basic level is like, if I send you five Bitcoin right now, it doesn't say, you know, Dan sent Scott five Bitcoin, but it says wallet XR2P sent five Bitcoin to wallet JJ3. And then if you then send four Bitcoins to some other wallet that has interacted with Russian hackers, it still doesn't say Scott, but, you know, the more transactions you do, the authorities can very easily trace that route. I mean, it's just like, it's right there. And now they see that you're wallet. They still may not know your Scott, but they see that your wallet sends some Bitcoin to a Russian hackers wallet. So very much not anonymous, very traceable. And so people are always surprised when government agencies recover stolen or lost crypto. And it's usually because of user error, where the person like had their password, their keys stored in a Google Doc or somewhere that was on their computer, somewhere hot i.e. connected to the internet. That's why people talk about cold storage, you know, literally writing your password down on a piece of paper. But that's what people should get is that, you know, it's actually very traceable. And that's the point. I mean, that's the idea is permission lists, you know, trackable public. It's immutable. It can't be changed after the fact and rewritten. And in many ways, that's better than other forms of finance. But, you know, bigger picture, this has been a fascinating push and pull between the people who got into Bitcoin back in 08 or 09 or 2010, because they wanted it to be outside of government control. They were libertarians. They had a rebel mindset. They wanted Bitcoin to become the new global reserve currency, you know, screw the government. And now that Bitcoin and all of crypto has gone mainstream, you've got the suits, you know, Wall Street tradifies their called in crypto traditional finance. They like crypto as an investment, but those people want the government regulation. They want safeguards. They want it to, they want crypto to have to follow rules. They like seeing that the SEC wants to regulate. And there's a fascinating push and pull between those two groups when it comes to crypto. I just want to take a second and thank the sponsor of today's episode HubSpot. Now, while you're listening to this podcast, you're probably doing something else too, mastering the art of working out, shaving like no one's watching, we get it. When you're having conversations with their customers, the same is probably true for them. They're I aming their teams mentally planning date nights. So growing conversations beyond that moment can be challenging. HubSpot helps you go beyond the moment by connecting you and your teams so you can access the exact same data and see the full customer picture. What motivates them, what their expectations are and how you can blow them out of the water with powerful tools that connect marketing sales, ops and service, HubSpot's powerful CRM platform, powers you and your teams, transform customer moments into extraordinary customer experiences. Learn how HubSpot can help your business grow better at HubSpot.com. Okay. So the character of today's story, SBF, he lobbied, he lobbied government quite a bit. So I'm curious, what do you think, can you can you explain what has happened in the past 24 hours? And then I want to speak about the ripple effects that this will have on the rest of the crypto web three industry. Yeah. Well, so you know how for a while and maybe this is quite a down, but the the analogy I've been using with friends today who've been asking me about today's news is remember when the space race was really heating up and it truly became musk versus Bezos. I mean, yes, Richard Branson is in the mix, but you've got Elon Musk and Jeff Bezos, this is like three, four, five years ago was the peak of this narrative and two of the richest guys in the world and they're both sending rockets into space and they both want to colonize Mars in the moon and their rivals cool rivalry ever and likes covering it. Imagine that same rivalry in crypto. That was the rivalry that has been heating up for over a year and that was between CZ and that's Changping Zhao, who is you know an early early crypto founder, his company's called Binance. It's actually the largest crypto exchange in the world by volume, but it very much operates mostly outside the US and the story around Binance in the last year was Binance kind of dodging regulation, not adhering to requests from global regulators, various countries were saying, you know, we want to look into your books where your headquarters and Binance would just say, we don't have a headquarters. We're a true crypto company. We're fully decentralized. Fine. On the other side of the rivalry was SBF. You've got a lot of acronyms and nicknames here, right? But SBF is Sam Bagman-Freed, who is the founder of FTX, another acronym, FTX, another big crypto exchange. Now FTX has been around like only a third as long as Binance, but has grown very, very quickly. So it becomes something like the number four largest exchange in the world. And SBF, very young, like 29 years old, Wonderkind, and over the past year while Binance was also growing in CZ, the Binance guy was being painted as, you know, this kind of rebel dodgy character, almost like the guy from Catch Me If You Can, kind of no one knew where in the world he was based, and he wouldn't say, Sam, SBF, was over in the Bahamas, but also making frequent trips to D.C. being, you know, the advocate for the industry, meeting with politicians, whining and dining them, speaking on behalf of crypto, trying to get politicians to understand crypto and be pro crypto. And he was mostly framed as a hero. I mean, people worship Sam. He was like a folk hero to the crypto industry. But FTX is more recent, but SBF Sam, he's an OG. He was arbitraging Bitcoin. And in fact, he made his well, side note, by, you know, discovering the Kim Chi premium, as it's called, which is the fact that often coming out of South Korea, you would have a different price of crypto. So you could buy in one country, sell on a different exchange. And even if you were making a very small margin, if you're doing that with huge amounts of money, you can get rich real fast. I mean, he's a genius. So, you know, that was the rivalry that had been assembled. And here's yet another kind of wrench in this. Binance was an early investor in FTX back in 2019 when FTX launched. A lot of people don't realize that. So fast forward to this week. And CZ over the weekend, kind of abruptly announces we are dumping all of our FTT. And FTT is the token, stay with me here, of FTX. So this is basically CZ doing a little bit of, you know, criticizing his rival. And he says in his tweet, due to recent revelations. But he doesn't elaborate on what those revelations are. Now there have been a few revelations recently. First of all, the folk narrative around Sam and all the hero worship totally died about a month ago. And all the true crypto believers kind of turned on him. And that's because he was strongly advocating for crypto companies to play nice with regulators, do KYC, which is know your customer rules, AML, anti money laundering. These are basically following the traditional finance rules, giving the information on your customers to the authorities. And the true crypto people are like, you know, screw you. You don't get it. You know, that's not the point of crypto. You've betrayed us. So people were already turning on Sam. Then there were some rumors about FTX's liquidity, which, you know, we all remember what happened back in May with the collapse of terror. And that caused contagion. That caused the collapse of Celsius and Voyager. These were crypto lenders that had basically been operating as if it was only going to be up only forever. They were operating very irresponsibly. You know, they were overhiring, overspending, overleveraged, and they all went to zero. Fine. So CZ basically stoked the flames on Twitter of, you know, are there problems at FTX? Well, we're dumping all our FTT tokens. And the reason finance even had a bunch of FTT tokens was because of its original investment in FTX. And about a year ago, Sam and FTX bought out finances stake by giving them a bunch of FTT tokens. So that was like Saturday Sunday. FTT starts to plummet. And then you had a report that Alameda, which is Sam Benjamin Fried's other crypto company, but it's got deep ties to FTX was deeply exposed to FTT. So now that FTT is plummeting, you're like, oh, is this bad for Alameda? And just when the speculation on Tuesday was reaching a fever pitch, like suddenly out of nowhere, Sam just comes out and it's amazing that all this happened on Twitter. I mean, you know, we've got a whole separate saga and drama playing out with Elon Musk and Twitter right now. But people need to understand like Twitter is a crypto story. I mean, all of what happens in crypto happens on Twitter. So Sam Benjamin Fried comes out and just suddenly tweets like, we are, we have come to a financial deal with finance and CZ. Basically, he bends the knee. I mean, total stunner, like just shocking to people. So FTX has sold basically its whole company, except for the US business, which it says is a separate entity, two Binance. It's CZ winning. It's Sam losing. It is embarrassing for Sam and for FTX. I mean, you want to try to be sort of nice about it. But the memes have been brutal and they've been accurate. I mean, this is the end of the rivalry and CZ one. And the reason why this happened. So let's equate it to something that somebody is not crypto. Is this like 2008, 2009 in terms of over leverage? This is what happened. This is that, well, and there's some conspiracy theories about how CZ, you know, killed a lot of it. But this doesn't mean that if they don't have the, so if you're, if you sell, there has to be somebody to fill that sell order. So if you don't have the money or anything to fill that sell order, then you're over leverage. And then that's that's when shit is a fan, right? Not to mention all of the options in long positions or shorts that exchanges like FTX, which is actually one of the more sophisticated one with tools for advanced trading, allow, you know, not to mention all those outstanding options. Like anytime that Bitcoin and ETH tank, you see all the different positions that got liquidated, you know, and totally trashed. So what happened was basically a run on the bank. It wasn't necessarily that FTX was over leverage as a business, but that they had customer funds tied up in all kinds of contracts. And when a huge number, and I think it was something like more than seven billion or more than nine billion of withdrawals happen in a 24 hour period, if you're in exchange, you can do nothing to stop that unless you quite literally freeze customer withdrawals, which is what happened with Celcius and Voyager. And the minute you see a company freezing withdrawals, it's like, oh shit, red alert. So, you know, it's anyone's guess, and I'm sure it's going to come out in the autopsy over the next few weeks, exactly like which big whale or entity or firm triggered the sell off, but people were sending their crypto off of FTX in droves. And FTX didn't have the liquidity to support it. And already more reporting has come out about Sam basically scrambling reaching out to billionaire investors and tech companies trying to look for some kind of bailout. It's the ultimate irony because only a few months ago when some other smaller crypto companies were going to zero or having liquidity crises, Sam and FTX bailed a couple of them out. And even more irony, CZ criticized that at the time. And he said, you know, he came on our to crypt podcast and said, that is not the type of deal I would ever do. And now basically he came to the rescue of FTX. So it's a total capitulation for Sam, but what can you do? And suddenly you have billions of dollars leaving your exchange all in a matter of hours. I mean, it was red alert, all hands on deck crisis over there. And this is how it ended. Because I think I was just reading, I'm obviously on Twitter, you in prepping for like this last minute interview. I'm on Twitter trying to figure out what the hell's going on. And CZ said two big lessons, never use a token you created as collateral. And then don't borrow if you run a crypto business, don't use capital efficiently, have a large reserves. That's why. Victory lap. Absolutely. Yeah. I remember you tweeted that and I said he's taking a victory lap. And then the replies were like, you know, lesson number three, don't come at CZ on Twitter. Because there are also theories that, you know, Sam basically stoked his iron when he started talking some shit to regulators about finance. And that's why, as I said, I mean, that's why I open up all this by giving the past history sort of have to understand how we got here. And that is from finance and FTX taking two very different approaches toward how they are with regulators, whether they're compliant, whether they follow all the rules. And Sam clearly tried to help position himself in his company by criticizing finance as approach. It's wild. So what is this? What are the ripple effects? What does this mean? Because when somebody looks at this, they're like a naysayer will be, this is why I don't touch crypto. This absolute shit show of whatever the hell just happened. This is why because you, which I understand you're totally right to ask that. I mean, so first of all, just to answer that part, the interesting thing now is the DeFi people, the people who are, you know, Rahra decentralized finance. And just real quick, you know, the difference here is finance and FTX and Coinbase. These are centralized companies. You know, they're not, they're not trying to say we're decentralized. They have people and executives and they, you know, keep track of all their customers. They are centralized entities. As opposed to this other corner of crypto, which is all about protocols and code, let the code run at all. The DeFi advocates get to use times like this and they did it back in May when, when Celsius and Voyager collapsed to say DeFi works. Like all of this is just an argument in favor of decentralized protocols. Because if you put your money on some kind of chain or lock it up in a protocol, you can track everything. You can see where your money is. You can see what your funds are doing. And at any time, you can move them to something else. The problem when you're depositing your funds into a centralized exchange is you're allowing them to control your money. And we know that what Celsius and Voyager and these lenders were doing was they were taking customer deposits and promising high yields. How were they getting those high yields? By putting your money into other high risk crypto assets or lending it out to other risky crypto companies. I mean, holy cow. So what the DeFi people would say to those skeptics and you're right, people see these news stories and they go, oh my god, crypto is a total house of cards. I'm never touching it. You lose your shirt. People are blowing their life savings. Meanwhile, no one should have put their life savings into crypto. I mean, so that's not crypto's fault. It's always been a high risk speculative asset. But the retort from DeFi people would be like, this is why we shouldn't trust centralized companies, whether it's an exchange or a bank coinbase FTX. These are basically crypto banks. And the DeFi people would say, don't trust them. So it is interesting. And then a segue I mentioned coinbase. What does this mean for a company like Coinbase? I imagine Coinbase will continue to double down on its positioning as we are a US fully regulated, publicly traded company. You can trust us. We'll never have what happened with FTX happen, which who's to say it wouldn't happen to Coinbase. But Coinbase is probably going to really double down in that position. They've been running ads during football games that show like a serene pond or something or a lake. And it says crypto winter got you down. Like, don't worry. Your money is safe with Coinbase. The largest fully regulated trusted exchange in the US. Wow. And that value prop works for crypto newbies who've decided, I'm just I'm going to dip a toe in. Like I'm ready to buy like a thousand dollars worth of Bitcoin. Those people want to deal with a centralized company where they can feel like I trust it. They're not about to go on to some, you know, protocol, DeFi liquidity pool and use Metamask. That's way too many steps for them. So that's another interesting after effect is like, what will it mean for Coinbase and other centralized exchanges? Don't they all look kind of risky and suspect in light of this news, right? And then lastly, like the other the other answer I give is regulation. You know, the same politicians who think that crypto looks super dangerous and high risk and think that it needs to be regulated, they are going to point to FTX having a sudden liquidity crisis and a run on the bank and having to sell to their competitor as yet another example of, oh my god, we need safeguards here. We need a regulate crypto. We need rules of the road. I mean, the the chair of the SEC thinks that every single thing other than Bitcoin is a is an unregistered security. And so, you know, he's going to make all those tokens either register with the SEC or pay a huge fine or refund all the money that they got from investors. So regulation is going to continue to be like the biggest story in the industry. That's not the same as saying they're going to try to shut it down. I mean, they can't anyway. That's the whole point of Bitcoin Ethereum. They're decentralized. You can't shut them down. But I think a lot of people get that wrong. They think, oh, you know, DC is going to shut this stuff down. They can't shut it down at this point. But they want to put strict rules and regulations in place. I just want to take a second and thank the sponsor of today's episode, NordVPN. 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Don't forget, if you're trying NordVPN, there's literally no risk to you. They have a 30-day money back guarantee. Give it a try. If you like it, great. If you don't, unless you are refunded, you can pretend it never happened. They gave a special discount for success story podcasts. Listeners, they gave a special offer. So go to my link at nordvpn.com slash success story to get your subscription started today. So when you look at sort of the three iterations of company, you have centralized and regulated. You have centralized and more or less unregulated than you have completely decentralized. And by the way, decentralized has other issues because then you have hacks on like, I think there's a ton of hacks on bridges that are exploiting millions and millions of dollars. So that's a whole other problem. Yeah. No, there's no service. Hello, my money was stolen. Help me. It's like, well, you wanted it to be decentralized. So what does this mean for the future? I would say, let's speak to the not the person who's already entrenched in the industry because I feel like crypto is going to be like religion. It's going to be like sports, going to be like politics. If you believe that one thing is right, doesn't matter when anybody tells you like, that's the way it has to be, right? So what about people that are getting into crypto, not just the retail investor, but like the entrepreneur that wants to build? What do they need to look for? What's advice for them? Yeah. Well, I think first of all, big picture. And as you began alluding to like, crypto is almost becoming a misleading or insufficient term for the industry. Like we use that word or blockchain to refer to this entire world that contains different corners that in many cases, someone might be either important or getting rich or building something great in one corner of this industry and have nothing to do with and no interest in another part. In other words, there's Bitcoin bros and Bitcoin maxis who believe Bitcoin is the only interesting thing in crypto. Everything that came after is stupid. They don't have any interest in Ethereum or NFTs or DeFi. They think there is only one crypto god and that god is Bitcoin. Then there's the NFT and web three people and a lot of this stuff is built on Ethereum. They might be artists or collectors or they're in it for the community and that's not the same as like investors who put all their money into this. Then as I said earlier, there's Wall Street types who are doing complicated arbitrage and they're investing in different coins and you know, they're putting one or two percent of their portfolio in. They're not like flipping monkey JPEGs, you know, doing board ABOC club stuff. So my point is there are a lot of interesting startups that I think are doing really cool useful things that are building either using tokenization or using blockchain that really have nothing to do with this whole FTX Binance liquidity crunch. They just think that blockchain is going to change the world behind the scenes. People have used since the very beginning when Bitcoin came around the comparison of like HTTPS. You know, you don't understand how that works. You just know that you see those letters before a web URL or email. You know that you click send and it works. You don't understand SMTTP, right? Like it's protocols. So people have always said if blockchain really succeeds, it'll be used behind the scenes without the consumer knowing it. And there are already a number of applications that are doing that. Most of them are still pretty small. They're not mainstream yet, but you know, there's audios doing it for music. There's live peer doing it with video hosting. Every little industry and corner of tech has a number of businesses that are starting to employ blockchain. And that's Web 3. That's all. I mean, that's all Web 3 means. A lot of people think it's stupid, meaningless jargon. It just means businesses and companies that are using the next layer of the internet and that layer is blockchain and or powered by a token. So a lot of cool startups are being built that way. And that's interesting. And it doesn't have to mean that they're super exposed to crypto assets. I think the mistake people make is like if you are doing anything that remotely relates to crypto, then you've lost all your money when Bitcoin tanks and you're down bad. And that's just that's not the case. It's a huge multifaceted industry now. What gets you personally because you cover all these stories. You speak with all these people that are so heavily entrenched in the industry. What gets you personally excited? Yeah, that's a fun question. What first excited me way back when when I first like wrote about Bitcoin and researched it myself was the possibility to save media. I mean, no joke, which sounds like a tall order. But as we talked about earlier, like, you know, even though every so often like a new news organization or something comes along and does well and grows quickly and then it sells the athletic, whatever example you want to use, you know, Axios, Politico. Now there's semaphore. Some of my friends are behind that. Yes, there are new media companies being built. But for the most part, the media industry is completely broken, completely and utterly broken. And that's not even touching like the political aspect and trust and how people consume news. Forget that. It's just people at some point along the way decided they shouldn't have to pay for news content. You know, 50 years ago, like you wouldn't expect to get a newspaper magazine for free. But there are all these websites that just aggregate and and ship post and copy our news. I know because every day like we'll publish a news story and then we have a room that shows our backlinks and I'll see like six junky websites just reposted our story. Just like totally stole it. So, you know, is there a way for media companies to make money other than plastering their website with horrible invasive ads or putting your entire website behind a paywall and basically saying to readers, you can't read any stuff on our site unless you pay. Some companies can do that. Washington Post, New York Times, you know, those are like must read. They've been around long enough. But for the rest of us, like you're probably just going to lose your readership if you do that because they'll get it for free somewhere else. So, long way of saying, could there be a way to use crypto for frictionless micro payments? And we still haven't really seen that. There was something called basic attention token that tried to do that BAT. But, you know, what if like the Atlantic has a big investigative feature? And I don't want to subscribe to the Atlantic for a year and go through the friction of putting in my credit card. But what if I could with one click send them two dollars worth of crypto? And I could read that one article right now. That was always very exciting to me. And after, you know, 12 years, we still haven't really seen that. But I know that there are places working on it. We're working on it at decrypt. Is there a way where you could use tokenization and crypto wallets to make it easier for people to support journalism that they want to read? I love that, dude. And that's like really what crypto, like you mentioned, what Web 3 is supposed to do. It's supposed to make things easier. It's not, you know, you see all these memes and shit where people are like, you know, Web 3 founder and it's like a guy on a unicycle. And it's like, this is a Web 3 founder trying to find a problem doesn't exist or whatever. It's just when you have an industry that's so exciting, you get a lot of people to create companies that are just really useless and convoluted and aren't solving any problems at all. Which, if you look at traditional entrepreneurship and how you build a business, that's not it, right, that you have to find true problems and solve true problems with whatever it is you're bringing into the world. So I love, I love the fact that that's something that you're working on. I think that more exposure has to be given towards companies that are doing things like that and not the bullshit and not the the flashiest thing, but the more, the most useful thing, right? We have still so many issues to solve for in terms of adoption to get anybody wanting to use this, right? Like it's like, you're solving it from an information point of view, but utility, user experience, user interface on a lot of these tools. I mean, if you even go through the list of Binance and and FTX and Coinbase, like, those are the biggest ones with a lot of DeFi tools that are very cryptic that nobody like you, Graham is not going to use that at all. 100%. So this is, this is, this is where the industry has to go, like, true utility. And we're still like just getting there slowly, very slowly. I always say like the UX has to get better. It's still just, there's so many hurdles. And not just, you know, for like we imagine, you know, you said grandma, like I say that too often, but it's really, it's just, it's truly not just people of a certain age. I mean, even young people who use other forms of technology and think of themselves as tech savvy. I've had friends say, I'm ready to buy an NFT, but like, what do I do? And then even as I hear myself saying it, I'm like, well, first you need to go to an exchange and buy some eth, you know, Ethereum, then you need to send your eth to a crypto wallet, like Metamask, then you need to go to the NFT site, then you need to convert your eth into wrapped eth with. And then you need to, it's like, it's too many things. It's too many things. It's actually ridiculous. You do it a few times. You don't realize how ridiculous it is. We know. Okay. And then the last question I have, actually, I'll ask, I'll ask you to just drop all your socials. And then I ask every guest one question and close it up. But before we pivot, on, on, I don't even know if this is true, but on decrypts site on the about you section, it says you only have less than one Bitcoin, less than five eth than a few NFTs. Is that, is that true? Yeah. Yeah. And so why is that surprise you? It's less crypto than you thought. A lot less. Yeah. So, okay, this is really interesting because among journalists, there are these super, super hardcore purists, and they're totally wrong. And this, this narrative was hot back in 2017 during the kind of first mainstream crypto boom. Yes, there have been other cycles before. But 2017 was when it really, really went mainstream for the first time. This issue of hardcore traditional journalists saying that if you own any crypto at all and you cover crypto as a journalist, then you're biased. That's unethical. You shouldn't own any because you're pumping it and you're shilling it. And I always thought that was so stupid. I mean, how can you write about something intelligently if you don't own any of it and haven't played with it? How can you write about Coinbase and understand what Coinbase does if you don't have a Coinbase account? And how can you write about a cryptorix if you haven't moved a little bit of crypto from one wallet to another? How can you write about NFTs if you have never bought an NFT and then, you know, sent it somewhere else or held it in your wallet? So I think that's totally wrong. But there are journalists who think that if you own any crypto, you're compromised. On the other end of this spectrum is crypto people, which is a lot of our readers who, just like you reacted, I've seen them, you know, make fun of me for not owning enough crypto. So I think if both sides feel like, oh, you're doing it wrong, then I'm doing something right, right? So almost everyone on the app, like we all disclose exactly what we own for transparency. And everyone owns a tiny fraction at most. You know, these are not people whose life savings are tied up in crypto. Do I wish I owned more like, I guess, but when I first started writing about Bitcoin in 2011, it didn't even occur to me to buy some. I wasn't approaching it as an investment. I was treating it as something I'm reporting on that I think is really interesting, you know, but I am, I am up enormously in the one Bitcoin that I own because I bought in like, 2014. Very good. Okay. Where do people connect with you? Socials, website, anywhere you want to send people. Sure. So the website is decrypt.co. We are a.co. So that's important. We have an incredible beautiful mobile app that everyone should download. It just has terrific UX. And then I'm on Twitter at read and write, right? As in writing. So W R I T E. And we also have our GM podcast, which I co-host, it's called GM, i.e. Good morning in crypto speak. And we do it twice a month and it's only the biggest, biggest a list names in crypto. So we've had CZ on. We've had SPF on Andrew Yang, all the biggest names. And we usually get a great candid conversation out of them. So people can check me out, check out our site and subscribe to the podcast. Awesome dude. Okay. And then last question, I ask everyone this. You've had a great career journalism also in in Web 3. After you look back at your career, everything you've accomplished, what does success mean to you? That's good question. Okay. Kind of makes me pause. I'd like to have written stuff that is still interesting years later, which is hard when you do news. I do write a weekend column where I get to kind of actually kick back and opine and evaluate. And then even, you know, back of finance, I often had the chance to do some cool features at Fortune, I wrote a couple cover stories. And again, it goes back to what excites me about crypto, you know, a lot of online media places, if they like redesign their website, suddenly you lose all your author archive, which is terrible. So we actually use blockchain because we back up all of our stories to IPFS, which is decentralized file storage. But point being, I'd like to think that there are stories I've written that, you know, years later, someone would still arrive at or find and read and find interesting instead of just, you know, fleeting news that is stale a week later because it was just about news that happened in that moment. But that's hard, you know, it's like sometimes it feels like every day you crank and you're writing stuff and it's just digital waste. So permanence is hard to achieve. I love that. And just to close out, do you have advice for people that are up and coming writers on how to achieve that, on how to write things that stick? Yeah, I think very often, especially with online news, people are just chasing the hamster wheel of covering what happened right now and they forget the why it matters. So like, go one step further. Here's what the news was today. But here's why it's interesting. Here's why it matters. Here's what it might mean or lead to. And then especially this last part, here's why you, the reader, should care. Here's why it might affect you. That was something I learned early on from some of my best editors at Fortune. Like, why does it matter to the reader? You know, you think it's interesting, but convey why this should be interesting to the people who are reading it. So that's part one. And then part two to really young writers, we were just starting out like just right as much as possible in as many places as possible. That was my approach when I was in journalism school, was even just class assignments. I would try to then get published somewhere online because you're trying to grow that archive of here, here are all the places I've written for. You know, you say, here's my clips. And that's how you kind of grow that that library.