Number Go Up

In the summer of 2021, a thirty-six-year-old investigative reporter received a text from his high school friend Jay about something called "doggie coin." Jay had invested a few hundred dollars in this cryptocurrency based on a meme of a Shiba Inu dog, admitting he knew nothing about it except its name and that he was "very bored." Within weeks, Jay was posting selfies from Disney World, financed entirely by his Dogecoin profits, taunting his friends with messages like "I am freaking Nostradamus!" This seemingly absurd scenario captures the essence of the greatest financial mania in human history, where ordinary people became millionaires overnight by buying digital tokens backed by nothing more than collective delusion.

What began as a hobby for computer nerds evolved into a $3 trillion market that attracted everyone from celebrities to pension funds, all chasing the promise that "number go up." Yet beneath the surface of this digital gold rush lay a web of fraud, manipulation, and human trafficking that would ultimately claim victims across the globe. This investigation reveals how the crypto boom was built on a foundation of lies, sustained by a mysterious company called Tether that claimed to back every digital dollar with real money but refused to prove it. Through this journey, you'll discover how to recognize financial bubbles before they burst, understand the real mechanics behind seemingly revolutionary technologies, and protect yourself from the sophisticated scams that prey on our deepest desires for wealth and belonging.

In May 2021, a Bloomberg reporter began investigating what seemed like a simple question about a cryptocurrency called Tether. Unlike Bitcoin or Dogecoin, Tether was supposed to be boring—each digital coin was allegedly backed by one real U.S. dollar sitting in a bank account. But when the reporter started digging, he discovered that this "stable" coin was controlled by some of the most questionable characters in finance. The company's chief financial officer was Giancarlo Devasini, a former plastic surgeon from Italy who had once been caught selling counterfeit Microsoft software and whose electronics factory had mysteriously burned down. One of Tether's co-founders was Brock Pierce, a former child actor from The Mighty Ducks who had fled the United States after being connected to a company accused of facilitating the sexual abuse of minors.

Despite these red flags, Tether had grown to control $69 billion—making it larger than most major banks. Every day, more than $100 billion worth of Tether changed hands, serving as the backbone of the entire cryptocurrency economy. Traders used it to move money between exchanges, and it provided the crucial link between the traditional financial system and the wild world of digital assets. Yet when pressed for proof of their reserves, Tether's executives offered only evasive answers and vague assurances. The company's website had once warned customers that executives "could abscond with the reserve funds," and internal documents revealed they had secretly lent nearly a billion dollars to their sister company when it faced insolvency.

The mystery deepened when the reporter obtained confidential documents showing Tether's actual holdings. Instead of safe U.S. dollars in bank accounts, the company had invested billions in risky Chinese commercial paper and obscure hedge funds. Some investments were so questionable that traditional money-market funds wouldn't touch them. When confronted with this evidence, Tether's lawyer dismissed the concerns as "innuendo and misinformation" while refusing to provide any concrete proof of the company's solvency.

This case illustrates a fundamental principle of financial investigation: when someone controls billions of dollars but refuses basic transparency, extreme skepticism is warranted. The crypto industry's explosive growth was built on the assumption that Tether's dollars were real, but this assumption was never properly verified. For investors, the lesson is clear—always demand proof when someone claims to safeguard your money, especially when they have a history of deception and operate from offshore havens beyond regulatory reach.

In February 2022, a reporter sat in a cramped office in the Bahamas watching the most powerful person in cryptocurrency play a video game while conducting a virtual interview with the Economic Club of New York. Sam Bankman-Fried, worth an estimated $22 billion at age twenty-nine, was simultaneously fielding questions from Wall Street titans about regulating his industry while casting spells on fairy-tale characters in a game called Storybook Brawl. His desk was littered with empty food packets, tubes of lip balm, and a bean bag chair where he famously slept. Despite his slovenly appearance and apparent disinterest in material wealth—he drove a Toyota Corolla and claimed to work only to give his fortune away to charity—Bankman-Fried had built FTX into one of the world's largest cryptocurrency exchanges in just three years.

The young billionaire presented himself as crypto's ethical leader, a utilitarian philosopher who had embraced "earning to give"—the idea that making as much money as possible and donating it would maximize his positive impact on the world. He testified before Congress, donated millions to political campaigns, and spent lavishly on celebrity endorsements featuring Tom Brady and Larry David. When other crypto companies collapsed in 2022, Bankman-Fried positioned himself as the industry's savior, bailing out failing firms and reassuring the public that responsible actors like himself would protect investors. Major media outlets compared him to Warren Buffett and J.P. Morgan, praising his maturity and wisdom in an industry known for excess.

Yet beneath this carefully crafted image lay a massive fraud. While publicly preaching about ethics and responsibility, Bankman-Fried was secretly stealing billions of dollars from FTX customers to cover losses at his trading firm, Alameda Research. He used customer funds to make risky bets, purchase luxury real estate, and maintain his public persona as crypto's golden boy. When these investments went bad, he simply took more customer money, creating a hole that would eventually reach $8 billion. The scheme unraveled in November 2022 when a liquidity crisis forced FTX into bankruptcy, revealing that customer funds had been missing for years.

The Bankman-Fried case demonstrates how sophisticated fraudsters exploit our cognitive biases and social proof mechanisms. His disheveled appearance and philosophical rhetoric created an image of authenticity that distracted from basic due diligence questions about his business practices. When evaluating any investment opportunity or financial leader, focus on verifiable facts rather than compelling narratives. Demand transparency about how customer funds are segregated and protected, regardless of how trustworthy the person in charge appears to be.

On a cold January evening in 2022, Paris Hilton sat across from Jimmy Fallon on The Tonight Show, both celebrities awkwardly displaying printed images of cartoon apes. Hilton had paid $300,000 for her digital ape, which wore sunglasses and a hat, while Fallon's $220,000 ape sported heart-shaped glasses and a sailor outfit. The segment felt like a poorly disguised infomercial, but within months, the cheapest Bored Apes were selling for over $400,000 as celebrities and influencers rushed to join the digital art craze. The Bored Ape Yacht Club represented the peak of NFT mania, when digital images of cartoon animals sold for more than luxury cars or houses.

The creators, two friends who had been unemployed just a year earlier, suddenly found themselves running a company valued at 4 billion dollars. They promised that owning an ape NFT was like owning intellectual property rights to the next Mickey Mouse, and that a vast entertainment empire would emerge from their pixelated primates. Celebrities and tech moguls competed to own the rarest apes, believing they were investing in the future of digital ownership and cultural status symbols. The community aspect was intoxicating—owners gained access to exclusive Discord channels, virtual parties, and real-world events where they could network with other wealthy ape enthusiasts.

The reality was far more mundane. Despite the astronomical prices and celebrity endorsements, the apes were simply digital images that anyone could copy with a right-click. The blockchain technology that supposedly made them unique only recorded who had paid for the privilege of claiming ownership, not who could actually use or display the image. When the crypto market crashed, ape prices plummeted from their peaks, leaving owners with worthless JPEGs and broken dreams of digital art fortunes. Many had borrowed money or liquidated traditional investments to buy into the hype, believing they were purchasing the next generation of collectible assets.

The NFT bubble reveals how speculative manias can transform worthless items into objects of desire through social proof and celebrity endorsement. When evaluating trendy investments, especially those involving new technology, focus on fundamental value rather than social status or fear of missing out. Ask yourself what practical utility the asset provides and whether its price reflects genuine demand or artificial scarcity. Remember that true collectors and investors buy assets for their intrinsic worth, not because celebrities are promoting them on talk shows.

In August 2022, an investigative reporter received a mysterious text message from someone claiming to be "Vicky Ho," a divorced Taiwanese woman who supposedly ran nail salons in New York. After apologizing for texting the wrong number, Vicky awkwardly tried to continue the conversation, eventually revealing her true interest: cryptocurrency trading. She claimed to have insider knowledge that allowed her to predict market movements and make quick profits of 20% or more, all using a "stable" cryptocurrency called Tether. For over a week, she patiently built rapport through flirtatious messages and fake photos, gradually introducing investment concepts before finally directing the reporter to download a trading app called ZBXS and deposit $500 in Tether to access her "short-term node trading" system.

This elaborate deception was part of a scam called "pig butchering"—criminals build fake romantic relationships with victims over weeks or months, fattening them up with small fake profits before stealing everything in one final transaction. The reporter's $100 test deposit disappeared into a network of cryptocurrency addresses that blockchain analysis revealed had collected millions of dollars from victims across North America. But the most disturbing discovery was who was actually sending these messages. Investigation revealed that many "Vicky Hos" were themselves victims—young people from across Southeast Asia who had been lured to Cambodia and Myanmar with promises of legitimate customer service jobs, only to be imprisoned in compounds surrounded by barbed wire and forced to run romance scams under threat of torture or death.

These criminal operations represented a new form of human trafficking enabled by cryptocurrency. Chinese organized crime groups had built entire office towers filled with enslaved workers, each forced to maintain dozens of fake romantic relationships with potential victims worldwide. The scammers exclusively used Tether because it allowed instant, irreversible transfers without requiring real names or addresses. When victims or law enforcement contacted Tether about frozen stolen funds, the company typically refused to help, claiming they couldn't interfere with blockchain transactions. This created a perfect storm where modern slavery funded by cryptocurrency theft operated with virtual impunity.

The pig butchering phenomenon demonstrates how new technologies can amplify age-old criminal techniques. The combination of social media, cryptocurrency, and international jurisdictional gaps created opportunities for unprecedented scale and sophistication in fraud. Protect yourself by being extremely skeptical of unsolicited investment advice, especially from people you've never met in person. Remember that legitimate investment opportunities don't require you to download obscure apps or send cryptocurrency to random addresses, regardless of how convincing the person recommending them might seem.

In May 2022, the cryptocurrency world began experiencing its own version of the 2008 financial crisis, starting with the spectacular collapse of a $60 billion ecosystem built around coins called TerraUSD and Luna. The project was controlled by Do Kwon, an arrogant thirty-year-old South Korean who had created what comedian John Oliver later described as a system where "one blorp is always worth one dollar, and the reason I can guarantee that is I'll sell as many fleezels as it takes to make that happen. Also, I make the fleezels." When confidence in Kwon's circular logic finally broke, both coins became worthless within days, wiping out the life savings of millions of investors worldwide and triggering a cascade of failures throughout the interconnected crypto economy.

The Terra-Luna collapse exposed how the entire cryptocurrency industry had become a house of cards built on borrowed money and false promises. Celsius, the company that promised 18% annual returns while claiming to be "safer than banks," was revealed to have gambled customer deposits on risky trades and unsecured loans to crypto hedge funds. Three Arrows Capital, once considered the smartest money in crypto, had borrowed billions from multiple lenders to bet on Kwon's doomed project, losing everything and triggering a chain reaction of bankruptcies. Even Sam Bankman-Fried's supposedly rock-solid empire began showing cracks, as FTX customers discovered their funds had been secretly lent to his trading firm for increasingly desperate bets.

The crash revealed that most crypto companies had been operating like the wildcat banks of the 1800s American frontier—institutions that printed their own money backed by little more than hope and speculation. Unlike traditional banks, these companies had no deposit insurance, no regulatory oversight, and no obligation to segregate customer funds from their own trading activities. When the music stopped, ordinary investors discovered that their "revolutionary" financial institutions were actually less trustworthy than the traditional banks they claimed to replace. The total market value of all cryptocurrencies fell from over $3 trillion to less than $1 trillion, erasing more wealth than most stock market crashes in history.

This catastrophic collapse offers crucial lessons about financial innovation and risk management. When new technologies promise to eliminate traditional safeguards like regulation and insurance, they often simply transfer those risks to individual users who are less equipped to handle them. Before trusting any financial institution with your money, verify that customer funds are properly segregated, insured, and subject to regular audits by independent parties. Remember that sustainable returns come from productive economic activity, not from shuffling money between increasingly complex financial instruments designed to obscure their underlying risks.

The cryptocurrency boom and bust reveals a timeless truth: when something seems too good to be true and its proponents refuse basic transparency, it usually is too good to be true. The entire $3 trillion crypto economy was built on a foundation of lies, from Tether's mysterious reserves to Sam Bankman-Fried's stolen customer funds, yet millions of people ignored obvious red flags because they desperately wanted to believe in easy wealth.

Protect yourself by demanding verifiable proof before trusting anyone with your money, regardless of how revolutionary their technology claims to be. Always ask basic questions: Where exactly are customer funds held? Who audits the books? What happens if the company fails? If you can't get clear answers, walk away. Finally, remember that sustainable wealth comes from productive work and prudent saving, not from buying digital tokens whose only purpose is to find someone else willing to pay more for them. The next financial mania is already brewing somewhere, and the same psychological forces that drove the crypto bubble will drive it too.