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

by Zeke Faux

The funds were not in the possession of shadowy North Koreans or some other group of cyberterrorists. The stolen billions were traced to a couple in their early thirties who lived in downtown Manhattan, not far from my place in Brooklyn. Their names were Ilya Lichtenstein and Heather Morgan.

North Korea’s elite hacking corps, which, six months earlier, had stolen $81 million from Bangladesh’s central bank.

From AlphaBay, those hacked Bitcoins were sent to one crypto exchange, then another. The second exchange account was opened by Lichtenstein, using his real name. He’d even sent in a selfie to verify his identity. The only person who’d know the connection between Lichtenstein and the hacked funds would be the person running AlphaBay, who went only by “Alpha02.” Unfortunately for the thieves, AlphaBay was already the target of a separate investigation. Police from several countries thought they’d figured out that Alpha02 was a twenty-five-year-old Canadian named Alexandre Cazes, who’d moved to Thailand and bought three properties, a Lamborghini, and a Porsche with his profits. Among his mistakes: On some early messages he used an address, Pimp_Alex_91@hotmail.com, that was connected to his real name.

Before long, Stone was managing more than $1 billion. Because it was crypto, all that money was stored on Stone’s laptop.

In 2021, when I’d ask crypto promoters for examples of crypto being used in the real world, many pointed to the Philippines. They called Axie Infinity a new form of employment and a potential panacea for global poverty.

Later in the morning, the writer Michael Lewis took the stage to interview Bankman-Fried and a crypto venture capitalist. I’d grown up reading his books, like Liar’s Poker and The Big Short,

He sometimes went by the alias “Jim Stark,” though his real name was Andrew Masanto, and he’d been accused in three lawsuits filed by angry consumers of involvement with a “plant stem cell” miracle hair-loss cure. (He has denied the connection.) After I awkwardly reintroduced myself, he told me he was building a “Web3 social platform” and that he had helped create a popular cryptocurrency. I looked up its market value and saw it was almost $4 billion.

The segment had the badly disguised bleakness of an infomercial for a multilevel-marketing company. It was hard to imagine that Fallon or Hilton had paid hundreds of thousands of dollars for ape cartoons, or that their endorsement would lead anyone else to buy one. But within three months of the segment, the price of the cheapest Bored Apes rose to $410,000. Tons of other celebrities were buying them. There were pro athletes, like Warriors star Steph Curry, Shaq, Dez Bryant, Neymar, and Von Miller; rappers Snoop Dogg, Eminem, and Post Malone; DJs, including Steve Aoki and Diplo; and musicians like The Chainsmokers. Justin Bieber paid $1.3 million for his. Gwyneth Paltrow bought one too. On Twitter, many of them made the apes their profile picture.

VICKY’S ATTEMPTS AT a fake friendship were pretty weak. But lots of people were falling for pig-butchering scams.

called the Global Anti-Scam Organization. The group said it had helped a huge number of pig-butchering victims: 1,483 worldwide, who’d lost more than $250 million combined.

When I sent my eighty-one Tethers to Vicky Ho’s platform, there was an entry in Tether’s database representing how much money I had, and another one representing how much Vicky Ho had. Another way of looking at it would be that Vicky Ho had an anonymous, numbered account at the Bank of Tether.

Surely a man with this level of dedication could help me trace my eighty-one Tethers.

Crypto bros routinely claimed that anonymous, untraceable payments on the blockchain would somehow help the world’s poor. But it seemed like none of them had bothered to look into what their technology was actually being used for.

🤦

“Bees don’t waste their time explaining to flies that honey is better than shit.”

Bankman-Fried took to Twitter to try and stem the withdrawals. “FTX is fine,” he posted, a bit feebly. “Assets are fine. We don’t invest client assets (even in treasuries).”

That Friday, just five days after CZ’s tweet announcing Binance’s divestment of FTT tokens, FTX filed for bankruptcy. The company, valued at $32 billion earlier in the year, was finished. Anyone who had left money on the exchange was completely wiped out.

One of the first times I’d spoken with Bankman-Fried, I’d asked him if he would ever consider running a scam to raise money for charity. To me, the logic of effective altruism and utilitarianism would have justified such a move.

Tether was presented with a 187-point fact-checking memo prior to publication and declined to respond to any specific questions about its history, its reserves, or its use by scammers and human traffickers. “The huge volume of corrections required would be tantamount to our rewriting Mr. Faux’s book for him, which is not our job,” a spokesperson for the company wrote.