Around the same time Ben McKenzie got interested in cryptocurrency and the hype surrounding it, he found himself reading his young daughter a bedtime story – The Emperor’s New Clothes. He looks across the table to his daughter, who has been brought along for today’s interview. “Do you remember this?” She looks up from her iPad and smiles. “I’d forgotten that the tailor’s trick is to appeal to ego and status worship,” says McKenzie. This was 2021, and cryptocurrency was everywhere in the US at the time. This encrypted, decentralised digital currency, as the TV ads, social media accounts and celebrity endorsements told everyone, was the way to get rich, and promised to be the future of money. Get in now, was the message, before it was too late.
He couldn’t avoid seeing parallels with the bedtime story – that it relied on people buying into an idea that, he suspected, may prove to be a mirage. Getting to the part when it was a child who calls out the truth of the emperor’s “clothes”, he had a thought: maybe I’m that child. “I mean, what do I know?” he says now, with a laugh. McKenzie is an actor, a former teen heart-throb known for his role in the mid-2000s drama The OC and who recently starred in the superhero crime TV series Gotham. Even with his 20-plus-year-old economics degree, he seemed an unlikely anti-crypto crusader. “But when in life do you have a chance to have an adventure?” he says. “What did I have to lose?”
We meet in a studio in London; the whole family are in the UK, where McKenzie’s wife, the actor Morena Baccarin, is shooting the third Deadpool film. Spare a thought for his daughter, seven and delightful, who is with her dad today and patiently waiting for him to finish (he has two children, plus a stepson from Baccarin’s first marriage). McKenzie is about to publish a book, Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud, which he has written with the journalist Jacob Silverman. It’s an entertaining caper, spiked with barely concealed fury at the people complicit in crypto’s rise to become an almost £3tn industry at its peak in 2021 – the CEOs, politicians and celebrities who took advertising money – and its collapse, which picked up speed in 2022 and swallowed many ordinary people’s savings. “Unfortunately, poorer folks disproportionately got in later,” he says, of those who bought during the boom.
McKenzie is the accidental investigative journalist in what he calls his “bizarre career pivot”, occasionally deploying his self-deprecatingly described “mid-level celebrity” to such missions as getting into a social media company-sponsored party – the same night a CIA operative comically tries to recruit the co-authors – or smoothing the path to an interview with the crypto exchange founder Sam Bankman-Fried, through his OC-fan assistant. The book introduces us to a highly dubious but entertaining cast, including eccentric CEOs such as Alex Mashinsky (months after they met, his lending platform Celsius declared bankruptcy and he was accused of securities fraud in a civil lawsuit, which he denies) and Justin Sun who, on taking citizenship of Grenada – Caribbean tax havens being strangely attractive to crypto moguls – was given a diplomatic role, and still refers to himself as “His Excellency”.
It’s a thoroughly researched trip through crypto’s often impenetrable world and many of the elements that came together to fuel it: the 2008 financial crisis and the mistrust in traditional finance; the rise of social media, influencers and misinformation; rampant libertarianism; the legions of predominantly younger men groomed by years of online poker and sports gambling; the rise of Trump and everything he wreaked. “When a conman is elected president of the country that symbolises capitalism globally,” says McKenzie, “that is a problem.”
McKenzie’s interest started during the early days of the pandemic. TV production had shut down and in the midst of “boredom and a midlife crisis”, he says with a laugh, he became curious. He considered buying crypto but the more he read, about bubbles and economic history, the more suspicious he became: “Bubbles go parabolic up right at the end, and then parabolic down, usually. That’s where I felt we were, like this was not sustainable. But in times of mania, it’s herd mentality and everyone just piles on.” It was, he thought, “potentially a massive Ponzi scheme. I hadn’t quite decided that, but I knew it was a bubble.”
McKenzie hadn’t been aware he’d been looking for a project, but suddenly here one was. He hoped that with his profile and rediscovered interest in economics he might make people question the boom. He contacted Silverman, a New Republic journalist whose piece headlined Even Donald Trump Knows Bitcoin Is a Scam he had enjoyed, and they met for a drink.
McKenzie suggested they collaborate on a book. “It felt like something I could do, because I know a little bit about money, but I know about lying – I do it for a living,” he says. His career had taught him about hype, and bubbles – he’d lived through his own. McKenzie had discovered acting at university. He had never planned to be an economist but was vaguely thinking about becoming a lawyer, like his father. Then he auditioned for university plays, loved it, and within a couple of years of graduating he had the lead role in The OC. The show became an instant hit. Being one of the most famous young actors in the world at the time “was a really fun experience, one I could never have imagined having, but a learning experience as well, let’s say. You talk about the parabolic rise and fall.” He laughs. “You’re never the hottest thing for ever.”
The similarities between the cryptocurrency industry and Hollywood? Ultimately, it comes down to marketing. “If crypto doesn’t have a product, which I would argue it does not, then what are you buying when you’re buying these bits of code? It’s just a story.” An appealing one, he adds. It claimed to be inclusive for people who, for various reasons, usually of inequality, didn’t have traditional bank accounts. “It’s going to build generational wealth, it’s going to democratise and decentralise the future of money,” he says. “None of it’s true.” He understands why people were drawn in. “I almost was. It had, at least on paper, or screen, made money for a bunch of people. Even if at the end of the day it actually hadn’t because they couldn’t get the money out when the price crashed.”
There are plenty of things one could be upset about right now. Why did he feel so strongly about cryptocurrency? “Because it’s wrong!” he says. “It’s terrible. If I was right – and this was two years ago – there were signs, historically.” He and Silverman started writing articles. Their first, for Slate, criticised McKenzie’s fellow celebrities, such as Kim Kardashian and NFL star Tom Brady, who had endorsed crypto companies. “It’s just gross,” says McKenzie. “Showbiz is a hustle, and there is money to be made by selling products, which is fine, but this is different. This is not soap or car insurance. This is an unregulated, unlicensed security, in my opinion, and you are effectively offering financial advice, whether you say you are or not.” (Kardashian was later fined $1.3m by the Securities and Exchange Commission; the “token” she was promoting is now virtually worthless.) One hilariously overblown ad fronted by Matt Damon likened crypto investing to the pinnacles of human achievement, such as mountaineering and space exploration. McKenzie laughs. “No, you’re just a guy in a studio with a black T-shirt on, pointing at random [CGI] stuff that doesn’t even exist. But you got paid a lot of money to do that.”
McKenzie’s enthusiasm, and the surety of his predictions, ramped up. He essentially bet $250,000 that the crypto market would collapse but got the timing wrong and lost most of it. Did that make him question his position? “Oh yeah. And it made me think about how to tell my wife, which is where a lot of crypto people [who have made big losses] have gotten.” He smiles. “It was an expensive lesson. But it was a luxury that I had the money to speculate with. What makes me most angry is the selling of this junk to people who cannot afford to lose the real money they have, and the complicity of the people that did that.”
With everyone seemingly in thrall to crypto during the boom, it felt isolating at first. “As soon as I met fellow sceptics, I was like: ‘Ah, these are my people,’ just a great group of nerds – cryptographers, computer scientists, economists, a lot of amateur sleuths.” He didn’t find much dissent in the media, which saddened him. “There was a lot of just putting out press releases, basically. I saw so much drivel.”
Bankman-Fried, founder of the FTX cryptocurrency exchange and at one point the world’s youngest billionaire, was the subject of many breathless media profiles. McKenzie built up a relationship with him before meeting for an interview – this was months before his businesses spectacularly collapsed last year and he was arrested on criminal charges, including fraud and money laundering. “We didn’t know what we know now, but there were red flags,” says McKenzie. On a personal level, McKenzie wasn’t impressed with the young man routinely described as the next Warren Buffett or JP Morgan. His empire, McKenzie felt, was “far more rickety than I had even suspected. He’s the guy? That’s your JP Morgan?”
McKenzie and Silverman spoke to politicians, and looked into the “revolving door” between politicos who then go to work for these companies, and the huge donations from crypto firms; Bankman-Fried’s companies alone donated at least £100m between Democrats and Republicans. Did it surprise McKenzie, or is he cynical enough by now? “I thought I was cynical,” he says with a grim smile.
What has this experience done for McKenzie? “It’s been an incredible adventure,” he says. He has reported from El Salvador, which recognises bitcoin as legal tender, visited environmentally disastrous cryptocurrency mining facilities and, at the end of last year, he found himself testifying before the Senate banking committee. “It’s given me a broader understanding of diversity of experiences. I’ve formed genuine friendships.”
He doesn’t know what he will do next. He still believes crypto has no real-world use or value but he hasn’t, I point out, successfully brought cryptocurrency down and he laughs. (For the crypto survivors, the market appears to be recovering even if the regulators are circling. “It’s not a fair market, most of the volume is fake, there’s very real liquidity, meaning the real money, backing it,” counters McKenzie.) Crypto will be around, he says, “as long as people believe in it. The brilliance of the con is it points out something we can all agree on – the financial system is unequal – and then pivot: ‘crypto solves it’.” He smiles. “That’s the trick – it doesn’t.”
We could continue to choose to ignore those flaws in traditional finance, but McKenzie doesn’t think we should. “We made [the financial system] up, just like we made up money, so we can change it – but it does require work and it does require we speak the truth.”
Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud is published on 27 July by Abrams.