Number Go Up: Inside Crypto's Wild Rise and Staggering Fall

by Zeke Faux

What they explained to me was that for all the talk of peer-to-peer currency, and the ingenuity of a way to transfer value without an intermediary, most people weren’t using cryptocurrencies to buy stuff. Instead, they were sending regular money to exchanges, where they could then bet on coin prices. The crypto exchanges, like Bankman-Fried’s FTX, were essentially giant casinos. And many of them, especially in the early days of crypto and outside the United States, couldn’t handle dollars because banks wouldn’t open accounts for them, wary of inadvertently facilitating money laundering. This was where Tether came in. When customers wanted to place a bet, they first bought some Tethers. It was as if all the poker rooms in Monte Carlo and the mahjong parlors in Macau sent gamblers to one central cashier to buy chips. The biggest traders made their money by facilitating countless smaller bets, like Jay’s envy-inducing Dogecoin win. They needed to move big sums of money from exchange to exchange, and they did it with Tether. They said they routinely bought and sold hundreds of millions of Tethers and viewed the currency as an industry standard. Even so, many had their own conspiracy theories about Tether. It’s controlled by the Chinese mafia; the CIA uses it to move money; the government has allowed it to get huge so it can track the criminals who use it. It wasn’t that they trusted Tether, I realized. It was that they needed Tether to trade and they were making a lot of money...