Hacked - The FTX Finale + A European Spyware Bombshell + Roblox Buys Cheating Company

Episode Date: November 16, 2023

A chat in which we discuss the end of the FTX trial, Amnesty International's newly released Predator Files, the Humane AI Pin, and what happens when a video game company decides to buy the people who were cracking their game. Learn more about your ad choices. Visit podcastchoices.com/adchoices

A little over a year ago, right as Super Bowl ads were spreading the gospel of a new era of finance akin to the invention of the wheel, we started to see hints, Scott. Hints that a group of nerds in a penthouse in the Bahamas had allegedly set off a financial landmine of their own design that would vaporize billions of dollars, real and imagined of other people's money. And do you know what today is? The reckoning? Today is the day we can stop saying allegedly. That is true. One of the joys of being any kind of media is that you have to use the word allegedly a lot. You say it a lot, but not today.

Not us. Last Thursday, Sam Bankman-Fried, co-founder of the cryptocurrency exchange, FDX, was found guilty on a bunch of charges, including fraud, conspiracy, and money laundering. We got to get into it. It's a big day. It is, it is a big day. We're going to do that and a few other stories. Some interesting game cheat story that came to us from our distorts.

So thank you, Boyd, for that one. I have to cover it. Fascinating, fascinating topic. Yeah, it's a really interesting one. An unstoppable force and an immovable object in the world of video game cheating. It's a great story. And then I want to talk about a little story that came out of Europe's spyware regulation, Amnesty International Report, into something called.

the Predator Files. It is a pretty wild story. FtX, crypto, Europe spyware, Roblox. Let's get into all of it on this chatty episode of hack. Scribledy boot-bop boom. It's drum and bass now. We're doing drum and bass for the theme music. It's drum and bass. It's fast. It's 160 beats per minute. Strap in. It's strapping. Get ready. Come with us. Come with us on the time. Yeah. How are you doing, man? We recorded 360 BPM and then slow it down. This is true.

You got that woozy. Yeah, totally. I'm good. I'm good. How are you doing? I'm doing good. It's been a second since we did one of these. We had our great conversation with Jack Reissiter from Darknet Diaries.

Check it out if you missed it. And then I went on vacation. You did. I did go on vacation. And now on that. Oddly enough, I'm currently on vacation. This is how you spent your room. I'm very close to you. I've been living your Pacific Northwest rain lifestyle. And I got to say it, I don't love it.

Don't love it. Not for me. It's rainy, huh? It's very, very wet and cold. And I don't, I don't dig it. Yeah. It's a lot. You want to get the sunlamp. You want to get that vitamin D. We've talked about this before, but you got to take steps. You don't have to deal with snow, but you do have to deal with seasonal depression on a scale I've never really experienced before. So, you know, it kind of all comes out in the wall. The thing I've been noticing is like where you are in Vancouver, you know, Arcterics, Gortex jackets. See, I'm even further west and it's like you can tell the tourists because we're all in Arcterics and Gortex jackets. And the locals are literally wearing deep sea fishing like outfits. Full rubber rain suits, you know, huge bib pants, like massive rain boots. It's like they pulled no stops out. the tourists are the ones who were like, oh, Gortex will keep me dry.

And they're like, no idea. Yeah. You need those, yeah, those giant fishing boots that go up to your shins. I know what you're talking about. That makes a lot of sense. Waiters. You need waiters, basically. Yes, you need Paddington Bear.

You need the whole outfit. Hat, coat. The little bucky hat. That's a good look. That's a very west coast look. That's a very far side of the island look. I'm glad to have you out here, if only for a little while. Oh, thanks, buddy.

We should thank our patrons. Jordan, what about you? I think we should probably thank our patrons. Lovely patrons. And we should probably talk about the merch store, which has been going great. Store. You know I love hats. Enjoy your hats.

You know I love a mug. People have been buying it. People have been buying hatch merch. Literally. It's so sick. You get a bunch of orders every day, which is amazing. Love to see it. Hope you guys love the merch.

Merch is like one of those things that I know we could have just slapped the logo on something, but we wanted to like, there's some fun designs in there. We wanted to work with our designer to make something cool. And that's part of why it took such a dang long time. So seeing that people were still down, still excited for merch means a lot, almost as much equal to as much as it means when you support us on Patreon. Hackedpodcast.com redirects to our Patreon. Great way to support the show.

And we got some new patrons since we've last done a shoutout to thank. I would like to thank Jacob, Jacob, Jacob, Jacob, Casper Monson. Thank you so much. Yeah, thank you so much. It means a lot. You've left. It just, just thank you, P. The letter P, you know.

Just the letter, lowercase, too. Lowercase letter P, you are. There's like a swagger of one letter, lowercase. It's like Q on Star-T, you know. but not in like the lowercase. I'm that humble. Thank you so much. Pah. Pha means the world to us. Broderick Duncan. Thank you. Thank you, Broderick. Yes. Mika Sanchez. Thank you so much. Micah, I think. Is that a Micah? My apologies. My apologies. It's messing up the name. So I'm glad this time it might be you. You got me. This is we support one another during these trying

time. Micah, thank you so much. I think these next two were pretty good on. Quincy Z. Love you. And Diego Fierro. I think it's hard to mess up Quincy and Diego. Diego Fierro, congratulations. That's a solid. That's a name. I'm a big appreciator of a name with Flo.

Diego Fierro. And Quincy. You know, one of my favorite fruits is the Quincy. I love a quince. So. Be Quincy Jones guy. You know, I feel about thriller. Thank you all so much.

If you want to support the show, kick it on over to Patreon. The Hackedpodcast.com to find our Patreon. Or buy a bucket hat. Or buy a bucket or a visor. Or buy a bucket hat. It's all good. If we did miss you as a patron, we apologize, just fire us a note. Yes.

DM us on X or just fire us in on the Discord. But yeah, if we did miss anyway, we greatly apologize. But I think, aside from that, we should. maybe plug hotline hacked? Oh, yes. So we're sitting on some killer content. We got to decide when we want to drop the first one. But we've gotten enough that we're going to at least do a hotline hacked, maybe a couple.

And if you want to get your strange tale of technology, it can be a hack you were a part of. It can be a funny little little computer whoopsie doodle that you did. If you just got a funny, interesting story about technology that you want to share with us, hotlinehacked.com. You can see a chat gpt generated website that is in no way, shape, or form optimized for mobile. I'm very proud of it. It took me minutes to make. I think I have a future in web dev.

Yeah, hotlinehack.com. Check it out. And yeah, let's just get on with the show. But yeah, it seems like it's been a while. Like we recorded that episode with Jack prior to Halloween. I think that was the last episode that we recorded. So it feels like it's been a hot minute since we've done one of these. So it's nice to be back behind the mic.

Yeah. A lot of stuff has happened. We got to talk about the FTX trial, that one's pretty crazy. There's some stories that have like started but haven't quite gotten to a point to talk about it. in the state's executive order, President Joe Biden signed an executive order on October 30th to establish the first substantial U.S. regulation on AI. We're not really talking about that today because it hasn't really fully happened yet. But I did want to bring up the fact that the White House revealed that a pretty big influence on this most recent push was the bad guy in the new Mission Impossible movie. I'm not sure if you had followed this story.

or have seen the new Tom Cruise motion picture Mission Impossible. You know, I haven't, so please enlighten me with how this is more of a joke than it already sounds. It's pretty much all right on the surface. In that movie, the bad guy, and spoiler alert, if you haven't seen, seen the new Mission Impossible, the villain is a sentient AI. And apparently, amongst other things, that movie was a big part of why there is now a push for substantial U.S. regulation governing artificial intelligence. And that's really fun to me because that's the first part of a two-part movie. It's the first of two.

And the second one hasn't come out yet, which makes me feel like there's probably an immense amount of pressure on Tom Cruise to get that right, given that it seems to be informing domestic policy. Well, it's funny that they've completely overlooked the warning signs that were given to us in 1984 in Terminator. And they're only paying attention now to Mission Impossible. It's because it's got that crew's star power. You know what I mean? They saw Top Gun. Yeah. Hey, Arnie was like a senator, wasn't he?

He was a senator. Yeah, he was California. Yes, he was. Exactly. See, he knew. our great AI fighting movie stars are really changing the game. We didn't need to bring that up, but I just thought it was fun. That was a good time.

And that is a good one. Yeah, so we're going to follow that story, I think, a little bit more seriously as it starts to develop. But I feel like we're entering into that first era of regulations and guidelines governing AI. It's going to be a whole big mess. We're going to talk about it as it unfolds. A good contrast to the policy and the, you know, the regulations that they're putting on AI. And they're doing it quite quickly when you compare that to something like crypto, which a lot of this episode will be talking of. Speaking of.

You know, we're decades in at this point, or at least. And still no regulation. It's surprising how that works. Maybe Tom Cruise needs to make a crypto movie. That's a cursed energy you just put out into the world. Oh, speed. Well, can't run from that, Tom. Yeah, I'm sure it's bound to happen.

And I see you have a story in here that suggests, I think that, I think far side of the FTX trial, which we're going to get to, we're going to start seeing more of it. Yeah. The increased financialization of crypto by the financial industry that it was trying to get away from seems to be maybe the new actor going into. But we'll get there. We'll get there. We'll get there. We'll get there. We'll get there.

What else to chat about quick? The Humane AI PIN. Have you seen this thing? I have seen this thing. I followed it. I watched the very, very, very dry announcement video. The like anti-sailsmanship launch video is pretty great. So yeah, a company called Humane, Helmed by X Apple employees.

Yeah, Humane, Helmed by X Apple employees in Ron Shoudry and Bethany Bongiorno, which had been sort of operating a little. little bit in stealth mode with this product that everyone knew the basic idea behind it. It was a my phrase not there is a screenless smartphone empowered by you know by artificial intelligence. Everyone knew they'd been working on it. Everyone knew that's kind of where it was going. It finally got announced last week. We get the big kickoff video and the takes, the hot takes, they are a common. What do you think of this thing? Honestly. Yeah. You're here for it? I think it's, yeah, I think it's.

You already have one. You bought it in the midnight black. Yeah, I've already bought it. Yeah. I'm talking to it right now. It's actually recording my podcast for me. The, um, I think it's, I think it's a neat concept. I just don't know if it's going to be the smartphone killer.

Like it seems like a tenth of the product or a hundredth of the product of a smartphone. Sure. So it's like, you know, obviously we have Siri. And one of these days, Siri will be, you know, GPT enabled and will be much more functional. Yes. And it seems like what they've done is create essentially a pin on pseudo-Syri. Like, I don't know. The, I see this being a much worse implementation than a smart glasses or a smartphone or a, I don't know, it just feels half, half cooked.

And I just don't know. I just don't know how it's going to compete with some of the larger, more sophisticated solutions. Yes. So for anyone that hasn't seen this product, it's a pin with, I think they called a laser ink. It's a small projector on it, essentially. The pin sits on your lapel. It listens to you. You talk to it primarily through voice commands.

When you do need to see something, it has this little projector that you put your hand in front of. That's kind of the whole product here. And I guess if I was trying to think of the most generous thing I could say about it, because I like a big swing. I think this is if you are a person that struggles with chronic phone addiction and you need to have a small portable computer with you, this is a really interesting way of taking the addicting part, the screen out of a phone and trying to preserve as much of utilities humanly possible. They're using, so that's, that's okay, I can see that being useful for that person. In order to empower that, the big idea here is what if we used GPT-style AI, natural voice computing, as like a layer of mediation between you and the device. Instead of having to take the device out and actually use it, you can talk to it using GPT, literally chat GPT as a service.

That's a really, really cool idea. There's a thing in like tech product design about don't build features, build products. And that to me unfortunately feels like a feature that in a generation of Android or two, they'll have just woven in all of the Bard style natural language computing into the phone at that level to the point that you could just talk to it like it's a humane pin and have it work the same way. The issue for me is that like when I do need that really high information bandwidth thing that only a screen can offer, like if I need a map with five locations pegged on the map that I can see all at once, when I need to be able to see seven products with their prices and I want to be able to see

them all at the same time. That really high information bandwidth thing, I just want the thing to have a screen on it. Totally. So I'm not sure how this improves on it. Imagine booking an Airbnb with this thing. Hell. Hell. Actual hell.

Yeah. You're like, hey, I need an Airbnb in Vancouver in the West End. And it'd be like, found these 76 listings. Yeah. I have. Can you describe them to you. What? One of the, like, example cases they give is like, you know, you can talk to it and have it do things.

Like, go through my contacts list and find this person's phone number, go through my mailbox and find this piece of data. But it's like, what if it doesn't do it well? Like, what if it gives you, gives you your confirmation code for your flight from three years ago rather than your conference. information code from the flight from this week. And it's like, and there's no, all of a sudden you're like having an argument with this four inch piece of glass that's pinned to your coat. I just, I don't know.

100%. Well, and further to that point, why isn't that something that I could say into my AirPod or my Google Bud? Totally. Like that way of interacting with the computer is a forward looking, very humane, gets you off your phone feature. It's not, I haven't seen proof that this needs to be its own product. It's a great feature at an OS level for phones.

I think that question of like, well, what is the unique use case that this empowers? I was reminded, anytime people talk about an iPhone killer, my brain goes back to the famous, like the iPhone launch event where he does the thing where he says it's an iPod, it's a phone, it's a revolutionary internet communicator. and he keeps saying those three things and you realize he's talking about one product, the iPhone, boom, we have mobile computing. That's how that event starts with these three use cases that are now in one device. This video starts with the colors that it's available in. Like they're not, it's like you haven't, you don't know what that that killer app is, that use case, that reason I have to have this as opposed to a phone. unless I just can't be I can't deal with the responsibility of having a screen in my pocket, which is real.

Very real. Belittling that for some people. I think this has real utility of just you can't handle owning a phone. Try this out. Fair enough. And it like, I wonder why it's not on your wrist. That seems maybe a little more useful.

But that's just a, that's a minor detail. It does have, yeah, exactly. It does have a camera. Like it does have other little functions. but yeah, to me, I don't know. Like, I just, it feels like when I think of meta raybans, the ultimate output of the meta raybans is like essentially this built into a set of glasses, but also with the ability to show you basic pieces of information,

like have a basic HUD or like, you know, the ability to not project into your hand in single color, some form of functionality. It's like, I don't know. I just, yeah, I agree with you on the function versus product thing. This does feel like when Siri and, like, Google AI get fully integrated that you'll be able to list, hey, Siri on your AirPods, and then boom, I don't know, my iPhone is lit up. A lot of people's iPhones just let up if I don't believe that. But the, yeah, I don't know. I just can't see it.

I don't know. Totally. Maybe I'm missing some extensible nature. Like the thing that made the iPhone so successful was the App Store, right? The ability to take it and use it as a platform. And I'm seeing lots of those platformish devices. Those are the ones that really changed the world. I just don't know how you would use this as a platform.

I suppose you could ingrain new UIs and GPTs and, or sorry, AIs into it. But yeah, I don't know. It's interesting. but if I had to bet on it, I probably wouldn't. Yeah, I imagine that I think you nailed it. I think that GPT is an intermediary layer between you and your computer is a cool idea that will slowly be implemented in devices that will be probably much more successful. And as a form factor goes, I would much rather have a pair of glasses I can pop on

because the amount of fidelity and information that you're getting out of that laser ink projector, feels kind of about as much information as we could probably get into a heads-up display on a transparent pair of glasses in the next five years. I'd much rather just see it in the corner of my eye. Totally. We'll have to see. You brought up the app store, and that's maybe worth one last thing we touched on before we dive into some other stories, which is chat GPT launched GPTs, their version of essentially

an app store. You can now create these little custom versions of chat, GBT that take prompts, instructions, information you've given it and save it as its own little agent you can come back to. Pretty cool. You know what? I'm going to take a victory lap on this on. I feel like I called this. Oh, yeah.

I feel like I called this. Yeah, no, you kind of did. Domain specific GPTs, you just sense it's going to come. Like, soon there will be a HR policy GPT that you buy a subscription to that will write all your HR policies and like, you know, basic legal contract review, stuff like that. You know, I just foresee, you can see this coming a mile away. And I think it's actually brilliant, honestly, like to train a domain-specific AI to really know the intricacies of a specific, you know, piece of language. This makes sense.

Yeah. The second, this got rolled out publicly. So it's only available for folks that have, I think, GPT Plus or pro or whatever they call it. I have a little folder that has emerged over the last while of savings. prompts basically. It's very useful to be able to write out a paragraph, slowly finessed over time, and then just keep coming back to it. Say you want to make notes about an article or process a large piece of text down into a

specific format. Day one, just like immediately took all those prompts one by one, created GPTs based on each one of them, saved them as little agents, and now they're just there. And it's a small thing, but it really does radically change that, like, user experience of of working with these chat bots because now I suddenly have these little programs, these little apps I can use. Sure. That have retained the context of the discussions you've had with them.

Exactly. And it refined. I noticed it's, when you give it your prompts, it's not just doing a copy paste. It actually refines the prompt. It asks you a series of questions that it then uses to refine your original prompt to more accurately give it instructions to itself.

Smart. For lack of a better way of putting it, like it is refining itself to make sure. that you're getting the result, it understands you want, not just doing the letter of the initial prompt, which is, I think, different than when you just feed it the prompt. So far pretty good. Yeah, even like, I think like four or five months ago, you started seeing a lot of like TikTok videos and things coming out with people who were trying to tell you the best way to use

chat GPT. And a lot of them was starting to interact with it being like, ask me the questions that you need to know to write me the best cover letter for this job application. And then it asks you a prompt of 10 questions, and then you answer those and then bang it like knocks you out this perfect cover letter. And it's like, okay. You could see where we were going for sure. I'd been off social media just because I was on vacation. But when I came back to it, it was right around when those were being announced. And the number of people who at some point had been like all about drop shipping and then we're all about creating internet courses and then we're all about ba, blah, blah, blah, blah, blah, blah. who had like moved on to this is the new app store. It doesn't require any code. And here's how everyone going to make all the money in the world. And then I went and made one.

I was like, nah, dog, this is too easy. The barrier of entry for this is way too low for this to be the new grift. There's zero friction of making this thing. Like it's just too easy to make a GPT for you to be able to do any kind of real hustle. Aside from like selling courses, teaching people how to make GPTs for money or something. Like there's no actual utility here, I think.

Yeah. As a money-making grift, I think it's just a good, useful thing to wire GPT into itself and let you save the results. But I don't think it's going to be, it might be a bit of a gold rush, but it, I don't know. I think you'll see some really, just like everything, right? Like there's, for every YouTube channel that's successful, there's a 10 million of them that aren't. And I think you'll see that here.

You'll see a lot of garbage get created quickly. probably around like marketing stuff, like writing content for websites that give fake reviews about products so that they get referral commissions. I think you'll see a lot of, you'll see a lot of that usage. But also I think you'll see some people take it and really drive it, you know, like really train an AI on a specific domain topic that most people spend money on, like legal help and HR stuff and, you know, you pick one of the, one of the other. of those relative categories that cost you. Every time you pick up the phone and call your lawyer, it costs you, you know, $1,100. All of a sudden, if you can replace that in a small sense,

like obviously not entirely, but just if you need something quick and you can replace it for like 30 bucks a month. Like, why not? Why not? Yeah, there was, I think a lot of startups. I think that's true and like cataclysmic for a couple of companies where there were, I'd spoken with a a couple of people who are doing, we're doing some kind of an AI-based startup that was basically just a chat GPT wrapper with a different training set like woven into it. Sure. And like, oh, that's a bad day. See you going. That's a bad day for those companies.

Yeah. You just got got got like, oof. Because those just got really easy to make. Like, GPT wrappers are no longer a thing you can monetize in the same way. There will definitely be a market for it. people, some people will get very rich, but the like, I can go to venture capitalists and raise $50 million for my AI company. It's, I, I don't think that's going to work the same way, uh, today that it did yesterday. You, you are completely out of the Microsoft world, right?

You're entirely Mac. I'm, I am, yes, I am not. I don't currently own any Windows devices. Yeah, so I have a few. And, um, I've gotten the new preview release of Windows 11. I feel like this just touches into this. And it's, it's, it's, it's, it's got. their AI built into it now. So you get this, why can I not remember what it's called? Co-Pilot. So you essentially have chat GPT woven

into Edge and the OS at a base level. So you can just ask it all kinds of things. So this is going to be interesting. How do you find it? Because I've heard mixed results about the first gen of it. Is it like, wow, what a brilliant idea

executed at about 20% operating like potential. That's pretty much how I find it. Let's just say that I hit it away and put it away pretty quick. But the idea is, is that, you know, eventually it will be very functional. And that's going to be interesting. You know, it's going to be an interesting little revolution we go through here as we figure out the uses for these things as well as figure out how to best implement them into our life and into our existing processes. Sure.

Like I will say if you do go on social media, the amount of obviously AI generated images I now see is, crazy. Like, you can miss fingers or like the spelling's wrong on a t-shirt or something. You can just tell that they're AI generated, but like every piece of, you know, every garbage marketing post you see or like memes, tons of them are AI generated now. So just like saving so much time in, generation and artistic design, I guess, you know, people are not doing them anymore. They're just getting them generated. Yeah. We were, uh, we mentioned earlier that we were on vacation. kind of recently and partway through the trip a little like background game emerged which is is the photo in that giant billboard or sign or whatever we're looking at of real people

I was as we were in like Mexico City big dense city about door advertising um a lot like a lot dude uh like I was I was pretty bold over once I started trying to pay attention to it of like no that's that doesn't look real that was generated person's two Yeah, like that the way that they've all sort of, because so many of the images in the training sets are of models, their understanding of what humanity looks like is far too pretty. Like everyone has the cheekbone structure and just like that squint, the model squint. It's kind of uncanny. And then you start really paying attention to it. You start to see it everywhere.

And it's like, well, it makes sense, you know, that eyeglass store would have hired models. So the fact that GPT produced humans that look like models is okay. But why does the guy's squinty eyes have so many wrinkles around them that are like looping all the way back around the eyeball into the forehead? Like weird stuff that doesn't actually happen. I guess there were probably only a generation of AI away from that not really being. I think it's going to become increasingly less recognizable. But this is this sweet spot where there's all these like cursed computer ghost humans. Peppering are like out of home advertising ecosystem.

It's great. It was a good time. Well, I don't even think it's just an advertising. Like the whole, the demise of body image is upon us. But, you know, it started, what started with Snapchat filters and Instagram filters is now AI makeovers. So you upload your photos to these things and these AIs essentially make you perfect. And then it's like, then you just use that as your profile photo. And it's like, that is not what you look like. The new pixel phone.

there's like a lot of great discussion about like what is a photo but the new google pixel phone really like poured a lot of kerosene on that discussion with the inclusion of AI they're increasingly adding AI photo editing features into the photos app which is one step away from being added to the shutter button where when you press the button you're not you're capturing something based on what really happened but all of that face smoothing and, you know, subtle aesthetic tweaks are moving increasingly like it used to be, you would take a photo, you would export it out of the photos app into the editing app. Now it's moved out of the editing app into the photos app.

It will inevitably move into the shutter button itself. Yeah. Where you're never really capturing, you're never opening a sensor, capturing light and closing it. You're kind of just gathering information with which to synthesize a really nice looking image. And that's like a really big, meaningful shift in like what it means to take a photo. Because for most people, they just want a good photo of their family. And if everyone's been like had Vaseline smeared over the lens by an artificial intelligence to make sure that they're looking at the camera and they're smiling and you can see their teeth and there's the right

number of them, for most people, that's a cool thing. But it is, it is weird and it is different. Just like whitens the teeth, straightens them. Totally. Replaces the eyes. Smooth any of the wrinkles. removes any of the cut it's like it adds makeup just color neutralizes and balances you takes any sheen away maybe does your hair for you yeah Graham's posture wasn't so good in the one image when everyone was looking at the camera so let's just straighten her up a little bit yeah yeah you want that glint in your eye you want to have like yeah you want to look a little mischievous you just pull that slider up and like who am i to judge we've been editing in in Photoshop for years but totally we've been editing photos versus capturing versus creating AI-based images based on something that really happened.

Yeah. Like, likenesses. Exactly. It's, like, does it matter? Maybe not. But also, yeah, it feels like it kind of does. It's a fascinating one. Maybe I'm too old.

But I like humans to be humans. Yeah. I think keep it out of the shutter button, I'd say, is my big red line in the sand. people will be able to be able to edit their photos and they'll want to be able to use all the AI editing tools that's fine but let make it so that when I take a photograph it opens the sensor captures captures the image and then closes the sensor whatever happens after that is between you and God but like let that part of it still function that way hopefully forever and I think that that that seems like an okay balance to me yeah the thing for me is just like you know we social media has already

proven to have a pretty negative impact on people's mental health. And as we get, really? Shocker, I know. I had no idea. But as we get further and further away from reality, like our body, dysmorphia and like our, like, we're not just catfishing others.

Eventually we're going to be catfishing ourselves. People will see themselves and we're going to need to add AIs into mirrors. We're going to add it to mirrors. I saw where you're going with that. So that people can see their perception of themselves, not the reality. And it's like at what point. are we going to define that as a mental health problem? You know, like, it's like we can't convince ourselves.

Well, maybe we can, but we shouldn't. Maybe we shouldn't convince ourselves that we aren't actually who we really are. Yeah. So. Yeah, that's selfie. That first time you see the selfie cam not flipped in reverse. Oh. You know what I mean?

We're like this, where Zoom reverses you so that it doesn't break your brain. And then you see yourself just filmed and you're the wrong direction. Yeah. what you're used to. Yeah. Just the sort of like baby version of that. Why don't we move on to something somehow less dystopian than that? Deal.

A vast international spyware network. Sure. Predator Files. So Amnesty International a couple weeks ago, we never got a chance to talk about this, published this really incredible investigation into this series of spyware attacks using a piece of firework called Predator that had targeted not government people, not just government folks, members of civil society journalists, politicians, and academics throughout the European Union, the United States, and Asia.

There's a couple of really interesting things to this story that are why I wanted to talk about it. So story concerns something called the Intellecta Alliance. All of the names here are ominous. Try and keep track. They're the Europe-based developer of... of Predator and a series of other surveillance-based derivatives of this piece of spyware that have, according to, I'm just going to borrow the quote from Agnes Calamar, its Secretary General and Amnesty International, have done, quote, nothing to limit who is able to use the spyware and for what purpose.

The report published October 9th by Amnesty International Security Lab, outline how it targeted, though not necessarily infected members of U.S. Congress, president of the European Parliament, Roberta Metzola, Taiwan President Tsai, In Wen, and German ambassador to the U.S. Emily Haber is a much longer list. Big fancy people all targeted through this. The investigation done in partnership with the European investigative collaborations and backed in depth by additional reporting by media part, under Spiegel. dug into the mechanics of how Predator works.

It is a zero-day-based, highly invested in invasive spyware that gives access to the devices, microphone, camera, all of its stored local data, context, messages, photos, videos, and the user will be unaware that it has been infiltrated by this. Between February and June of 2023, yeah, it's good stuff. Amnesty International said that social media platforms were being used to publicly target 50 accounts belonging to 27 individuals and 23 institutions. Essentially, this is just a click-on-a-link piece of spyware. Sure.

So these were very public appeals to people to try and click on a link that would have infected their devices with this predator spyware as part of a campaign called Reply Spy. Part of the reason I was intrigued by this is that Europe is governed by a series of regulations that are meant to prevent Europe-based and regulated companies, like the Intellecta Alliance, which is this network of companies, all based and regulated in Europe, from producing products like this and then selling them to countries

that they have good reason to believe will use them to target citizens, journalists, and political dissidents. There is supposed to be a regulatory framework in Europe preventing the use and development of these tools by those types of people. And I think this is a really important story because it reveals that there is a large Europe-based international conglomerate that's manufacturing these products and selling them to regimes all over the world with seemingly zero friction from that regulatory framework.

I just found it very interesting. It's a long read. It's not a light one, but it is worth looking at. It's, I don't know, it feels similar to, you know, DDoS. as a service and stuff, and this is just spyware as a service, private company that makes these things. There's a lot of companies that make stuff like this and then license it to governments and whether you like it or not depends on where your political allegiances lie. For sure.

So it's just, it's, it's, it's the world we live in, you know. It is. And it, I feel like we don't, I haven't heard a lot of conversation about, you know, this is a, it's a product, it's manufactured in one place and it's exported in other places. And yet it's one that like has legal implications that are a little bit different than, you know, I make a chair and I sell it overseas. It's like it's a chair that can be used to spy on a like a political dissident or a journalist. And like you said, where your politics fall probably dictates whether or not you think that's a good or bad thing.

But it probably shouldn't because as much. is you might be okay with a certain group of people being targeted by these things. There's probably some group of people you think shouldn't be targeted by these tools. As long as they can be sold as liberally as a chair, you're never going to be able to make sure that that's the case. You know what I mean? Yeah. I think that the big shift is that I think back in the, like if we look at this through the lens of history, you know, when a nation state or something, a three-letter agency decided that they needed to track and,

and focus on somebody there's regulatory involvement, legislative and judicial involvement. You know, you need a warrant. It's supposed to be, yeah. All this stuff. And now this, you know, there was always private investigators, so companies could kind of do something like this.

And now I feel like in the digital age, it's like, that's kind of the mirror of this is like three letter agencies in nation states are still using software like this. They might not be buying this piece, but they might have other pieces. but then at the same time you've got other bodies that would typically go to like the entire domain of private investigation needs to be largely digital now. If I had to meet with a PI that didn't know anything about digital stuff, I would be like absolutely not, you know? So it's.

Yeah, what does that guy even do? Yeah, I go through garbage. I just look at trash. I follow people around. They're on their phones, lots. I don't know what they're doing on them. What are what they're doing? Exactly.

So the. So yeah, it's just, I don't know. It's just one of those things. Like obviously not great. Don't love it. Don't love violations of people's privacy. But it's it doesn't surprise me. Let's just say that.

I get that. Yeah. I sense that you are. Yeah, it's like, yeah, bad. But we knew a, I feel like you kind of knew about this. And it's not, it isn't surprising. Yeah. Which is itself surprising.

You know? Like it's. Is it, though? Yeah, it's, it is, you bring up a really interesting point that at a certain scale, nation states probably don't need to, the sufficiently large actors don't really need to license these tools because they're developing their own. They don't need to go to someone that found the zero days because they have their own zero days.

But there's this sort of like middle band of regimes and governments and actors who don't have those things, but do have the resources to try and deploy a tool like this. They can't make it, but they can use it. And the market has just sort of like, yeah, self-selected for that. Cool. So we'll make that. You know, you're big enough to buy it, but you're not big enough to manufacture. It will manufacture it for you.

Not a lot of people can make their own space rockets, but a lot of people want to go to space. So someone will make it. Exactly. It's like anything. Yeah, I'm reminded of that crypto AG story, the Swiss company coming out of World War II. It was manufacturing encryption devices for all. all of these different countries on either side of the iron curtain for decades. And then decades and decades later, it turned out that the CIA had bought,

secretly bought a share in the company and was installing backdoors into the encryption devices the entire time. And when I read something like this and this very insidiously named Intellexa alliance producing this predator spyware, God, the names. Need the names. You do wonder, you're like, in like a decade, who are we going to find out own this? Like that's that's the question I have. It's like who's really who's really behind this?

The like tinfoil hat part of me starts to raise its hand. Yeah, I don't know. Nothing surprises me. Not much surprises me anymore these days, especially when it comes to this stuff. I find like the spouse where, you know, I find that that segment more disturbing. Maybe because it's more personal than something like this, this just seems like a corporate service offered. to large entities and governments to do what they were going to do anyway. So it's just, this is capitalism, you know.

Yeah. There's a supply for the demand. Well, I mean, that's a good way of putting it. You have, it was bound to turn into something like this where if a zero day is as valuable as we all understand it, a vulnerability that the manufacturer of a device we all carry doesn't even know about is worth that much, it would make sense that an ecosystem of businesses, suppliers and buyers would now. naturally start to grow like moss around that incredibly high value thing.

That's just what happens when those emerge. So I think you're right that it sort of feels inevitable in a way that spouse wear and stalkerware, I guess are inevitable in a different way that when you zoom in close enough, humans tend to do icky things to one another and find technology to empower them. But that feels like a different thing. I feel like you don't even have to zoom in that close. I feel like it's a pretty macro thing that we're taking part in. That's true.

That is true. So. Well, that's Amnesty International's Predator Falls. Give it a look, look it up. It's a really fascinating read. It's a long PDF they've put out,

but it's, um, I think it's important. It's an interesting one. Yeah. Okay. Should we take, where do we want to go next?

A break or should we just keep going? You know I love taking breaks. Let's take an ad break. Adverisness. Listen to our voice. saying things that people asked us to after the beep. Think about the last time you heard a breach story on this show. It always starts the same way.

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What makes it even more effective is how it works with Arctic Wolf's concierge experience. The team brings customer-specific context directly into the platform so every AI-driven decision reflects your environment instead of generic assumptions. The automation frees your concierge security team to focus on higher value strategy and proactive risk reductions while the agents handle the grind. If you want to see what trustworthy, production-ready AI and security operations actually looks like, go to arcticwolf.com slash hacked. Never feel like cyber threats are evolving faster than anyone can keep up?

Last year, 2025 was nothing short of a record-breaking year for major breaches, from sophisticated ransomware operators to AI-enabled attacks that turn defenses on their head. Organizations around the world saw headlines they never expected and cybersecurity teams were tested like never before. But here's the thing. These incidents aren't just news headlines. They're learning opportunities. And that's why Arctic Wolf is hosting a live webinar on February 5th, diving the most impactful breaches of 2025. Their field CTO and security leaders are going to unpack not just what happened, but why these attacks succeeded. And most importantly, what businesses can do to fortify their defenses for it's too late. You're going to walk away with real insights

and how threat actors are evolving, how defenders are responding, and what strategies can help you stay ahead of the next big breach. It's not fearmongering. It's practical, actionable, intelligence from experts in the trenches. Register now at arcticwolf.com slash hacked. Do we want to, where do we want to go now? Do we want to go to the video game sheeting quarter or do we want to dive into the crypto pit? What do we think of it? Let's leave the, I feel like we had such a heavy intro piece, like the pieces. They were pretty socially and ethically heavy. I think we go to the video game cheating because it's more insane. And then let's go back to crypto, which is inevitably morally heavy. Morally heavy, but honestly, I think it's

kind of a good news story today. But we'll get to that. We'll get to that. Yes. This is a fascinating one. You flagged that a member of our Discord found this story. I'm really excited. I just talk about this. You want to lay it down for people? Yeah, absolutely. So void in our Discord brought the story forward. I dropped a few questions out and we had a little lengthy chat about it one night. And it was, I'm shocked.

Let's just say that. So Roblox, video game, obviously. That can't be how we say it this whole time. Roblox, raw blocks. I don't even know how you say it. Roblox. No one's ever heard it said out loud actually. actually weirdly enough. I say Roblox as in robot. Yeah, I think that's right. And I didn't want to

just say Roblox later like I was passive aggressively correcting you. So I had to, we had to get in front of it. So I, I have been saying Roblox forever because I think it sounds funnier, even though I think are more funny. I think deep down I know that that's not it. Yeah, sure. I've been saying it for so long that it's now in my lexicon. So for the sake of this. So for the sake of this episode, I will say Roblox. Just, just for... I hope I'm right, but yeah. Roblox.

I don't know. I sound like an asshole if it's pronounced Roblox. Roblox. Anyway, okay, so Roblox has just signed a partnership to reduce the amount of cheating going on in the Roblox environment. Oh, thank God.

With the company that makes the cheat, the biggest known cheat, synapse. So they have And when Voidav written initially through the story out, I was like, where is the proof that this is the company that that makes the cheat? Like I see them talking, but no, they never directly mention that Synaps is the cheat maker. To which he replied with a developer link from the dev forum for Roblox,

where they essentially go on to say, we understand how strange this might be, but, you know, this is for the best. So they have The biggest cheat manufacturer for the game Has just been hired to prevent cheating in the game It just feels like a shakedown that I've never seen before It's shakedown Yeah, the developer posts

That you mentioned has some really great stuff in it And it kind of really does speak It reads like that scene in a movie where the person answers the door and there's a cop talking to them. And they have this conversation and you get sinister partway through when you realize that the kidnapper is standing just outside of you

pointing a gun at the person talking's back. A very like blink if you're okay type of situation to read from user BitDancer Roblox staff on this developer forum. As made clear that we said at RDC 2023, cheating and exploiting are not welcome on our platform. And we are using every measure within our power to combat at the last.

start of the next paragraph. To take another step towards this goal, we are pleased and excited to share that we have entered into a close partnership with Synapse Softworks LLC. Synapse is well known in the reverse engineering scene, which is a very polite euphemism for they're one of the single largest cheating actors that exists on our platform and we have hired them in order to stop people from cheating on our platform. It's the end of Catch Me If You Can. I have to see, it's the end of catch me if we can. I have to, I have to read the beginning of the next paragraph in this post because it's actually my favorite set of sentences. Oh, yeah, I missed that.

Yeah, yeah, yeah, yeah. It might seem strange that we're teaming up with synapse, but we believe it will be the most fruitful option when it comes to reinforcing the platform security. For the longest time, we've been on opposite sides of the battlefield. But in that time, we've grown to respect their. skills and they've grown to respect our vision. Oh my God. It's like for the long- Our vision of making this end. Please make it end. For the longest time, we've been trying to shut them down and we've grown to respect how good they are at getting around our anti-cheat. And so therefore, they've grown to respect our vision of giving them money to stop creating

cheats is what I feel like that says. Allegedly what that says. I'm so tired of this fly that's been buzzing around my face. I've decided to offer it equity in my face. I've decided to pay off the fly. Honestly, like what this, I have to think that there was a countdown, like a security update countdown of like they did this, so now we're going to try and do this. And then you release that update and then they find another way around it. And at a certain point, you would say, if this happens seven more times where we put out a patch and then they get around the patch, we're just buying them. And it went seven, six, five, four, three, two, fuck it, we're buying synaps. Yeah, exactly. I feel like this was something that someone knew was coming and then, yeah, October 27th,

we got to just drop the update. It's happening. It just, but to me it's just, it's, it's literally negotiating the terrorists. Like, like the, the, If this becomes, like, Activision, like, if you, if you parallel this to, like, what's going on with, like, Activision engine owning, big Call of Duty cheat manufacturer, they're, like, locked up in court. They're suing each other, but the engine owning is still releasing cheats and still kind of causing damage to the Call of Duty environment. But, like, they're, like, trying to destroy, like, or Activision is trying to destroy engine owning, which is, like, you know, what you would kind of expect, you know, where Roblox has taken the opposite initiative where they're saying, you know what, we're just going to give them a bunch of money. And granted are, I'm sure they're going to deliver some services and be like, hey, you know, this is how we always

get around your anti-cheats. And here's like, here's some things we can do to tighten up where some of the information goes and how you can secure it against modification, et cetera, et cetera. So I'm sure they'll get value out of it, which is good. But I'm sure most of the engineers at work on Roblox knew a good chunk of it anyway. So I feel like you're just setting and paving a path for like, hey, you want to get Rich Jordan? It's like, let's just build a cheat for a major free-to-play video game until the developer comes along with a check and says how much for you guys to piss off. And it's like, I feel like that becomes, that becomes their biggest problem is they might have taken out one, you know, one problem, but they might have created hundreds more, especially because the people that play Roblox, the developers and content creators in it are used to creating things for money. And they've all developed significant technical skills.

All it's going to take is like 50 of them to be like, you know what's better than making 100 grand, making these things inside of this? platform is just hack the platform and wait for the millions to show up. Totally. It's like, yeah, it feels like you've, you've kind of hired a really good blue team at a certain point where it was like for years, we've waited for you to post an update and then we reverse engineer it and create exploits for it. Now, while you're working on it, we can be doing that process of reverse engineering and figure out how people will crack it so that you can hopefully ship it without that

vulnerability. Like you almost want to keep these folks in like a separate building off to the side and they just get like an early alpha of everything. And it's like your job, just keep doing what you were doing. We don't want to see you. We don't want to hear you. We'll see in the cafeteria and we won't make eye contact. And your whole job is just to fuck up our shit before someone else has the chance to. Yeah.

Honestly, pretty good idea. Patch the code and send the patch over to the master branch, please. exactly but even then i feel i feel like they're just they've created their own they've created a new financially rewarding ecosystem it's like why would i build content in the game when i can just try and hack the game and then wait for them to buy me too and i just i don't know it feels like a more extreme version of a bug bounty almost where it's just like yeah you could crack us and try and sell it but if you don't want to break the law maybe you crack us and then sell it to us It's like kind of that a little

But it is different It's different It's great I love it I talk about bug bounties quick Because I'm always I'm always A surprised when companies don't have bug bounties

And B I'm generally surprised at how little the rewards are For some of them Sure There's some critical systems out there That even if they do have a bug bounty the bug bounty is like $4,000. And it's like, okay, it's like, really?

Like, if, if, if, if I get a zero day into your infrastructure platform or whatever it is, it could cost millions and millions and millions of dollars and losses and lawsuits, and you're going to give me $4,000. That's like I'm, I don't know, this is just a total digression, but I'm always kind of generally surprised at the level that bug bounty's rewards are for critical things. Some, some have big ones. for like million dollars. Like I think Tesla notoriously used to have a pretty massive one.

Right. If you could hack the car. Yeah. Yeah, sure. So you want that. Yeah. You want a big bounty on something on a thing that drives. Yeah, that's true.

Every so often you see one, you're like, that doesn't seem worth A, the effort and B, the damage. Like, huh. So shall we? Shall we? Inevitably. Yeah, let's take it to the crypto corner. The crypto pit.

Let's talk about crypto, but a fun one. Maybe not fun. A lot of people lost a lot of money. A cathartic moment in the world of cryptocurrency. Sam Bankman Free, co-founder of the Cryptocurrency Exchange, FDX found guilty on charges, fraud conspiracy, and money laundering. Following a month-long trial in New York, where Bankman Freed faced accusations of orchestrating one of the largest

financial frauds in history. We've been following the story for a while. A lot of people have been following this story. We've never done the big deep dive episode, the big interview, because it's, it's, the story is just being so thoroughly told so well by so many different people. And that's kind of one of the important things about it, I think, is that this was one of the first large crypto scam, grift crime, whatever you want to call it, that got really, really mainstream attention.

And it kind of finally came to a head. They paid for mainstream attention. You know, their name on F1 cars, their name on stadiums, their Larry David. Super Bowl ads, man. Yeah. Yeah.

You got the world's best quarterback out there pounding the pavement for you. You've got, you know, they definitely didn't hide away from the limelight. So I think that all that did was amplify the, the collapse. Yes.

So a little over a year, a little less than a year ago, FTCS, cryptocurrency exchange, sort of the darling of the crypto world collapsed. And the very broad, we can now kind of say this, users tried to collectively withdraw billions of dollars from FTX and they were unable to do so. And as it was kind of soon after revealed that the money from FTCX had ended up over in the coffers of a supposed to be independent, but unfortunately woven together company called Alameda Research, which was Bankman Fried's training firm that had made these enormous bets on various parts of the crypto ecosystem, some of which were owned by Bankman Fried and FTCS itself.

So when the story broke in this, I think it was a Coin Desk report making these early allegations, there was, you know, naturally a run on FTCX, the idea that FTCS might not have their money and made everyone take out their money, which meant suddenly FTCS didn't have any money. It was revealed over the course of the trial primarily by this, one of the sort of three, two to three other major players in this drama, FTCX co-founder and executive Gary Wang testified that from FTCS's inception in 2019, customers' funds had pretty much the entire time always been flowing between FTCS and into the bank accounts owned by Alameda, which was then able to sort of do whatever they wanted to

with those user funds. A really important revelation. And this is really the story of Sam Bankman's Freed's, like, kind of main compatriots at Alameda and FTX, people that had been with him since the beginning turning on him over the course of this trial. This was a sort of a, I don't know if I want to call the story of betrayal because I don't have a ton of sympathy for the betray, but really it was. it was people turning against one another under the threat of a massive legal repercussion. But one of the big, really interesting moments that we learned about over the course of this trial

was that Gary Wang had hard-coded an exception, this really important exception into FTX that made it so that Alameda research was the only user on the exchange that was allowed to have a negative balance, which functionally meant they were able to borrow from customer funds. This sort of negative balance exception turned out to be the thing that the whole collapse turned on. And a major part of this trial was Wang's allegations that Bankman Free directed him explicitly to create that exception to allow Alameda to borrow basically unlimited money from FTX, which is what resulted in the whole thing collapsing. You know, I got to, I just got to jump in. I got to take another victory lap because I think I even said this. And we initially talked about this.

I said, I bet what they did is they allowed them to never be margin called. They allowed them to bypass the margin call safety limits. And that's exactly. I do kind of remember you talking about that. Yeah. And that's exactly what they did. And that's exactly what they're going on the track. Who does?

Yeah. No, it would seem you called it. One of the things that I did find really interesting about this, if you did play close attention of the trial, is they started releasing all of the private, um, kind of like DM groups, like text message groups,

uh, WhatsApp groups that had a bunch of the key players, including SPF's dad, who I think, and this is, I've seen some coverage of this coming out of it, that I, I think he might be,

he might be in some trouble. At least that's what I've, I've read a few things, talking about it. Like, his, his involvement with it was not as, you know, innocent. Oh, arms length as originally, yeah. So I think there could be, there could be some knock on, at least what I've read a few opinion pieces.

There could be some knock on lawsuits and civil suits and things like that coming down the pipe, which I think is to be expected, given the size of the fraud. So. Yeah, sure. Yeah. There's inevitably going to be. round of appeals. I'm sure that this story isn't actually done and all these people are going to continue to exist as we should talk about in a second. But it does feel like a little bit of a

chapter closing. Totally. It felt like there was this group of people who were running this ecosystem of companies, spending lavish sums of other people's money and it all collapsed. And the result of that was that they turned on each other. It was an architect of turning on each other. I'm sure it was again under the immense weight of, you know, legal fallout. But they all turned on each other and they all started attacking each other. And the result was that Sam Bankman freed, while he has plans to appeal, has been charged with two counts of wire fraud, four counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering and is staring down the barrel of a lengthy prison sentence. That sentencing is set to conclude on March 28th. So we'll

probably do a minor check back on what happened. But that's not really the interesting. part to me. 110 years is what his maximum sentences or something like that. That's pretty gnarly. Yeah. I doubt it'll be that, but who knows? No, I'm not sure that.

I honestly don't. I'm not even sure that it should be. I think the important part, yeah, I'm not sure what the important part is. It's an extreme waste of a bunch of capital and time and human utility. It's a big, dumb, shitty, bad thing. Which I cannot,

I'm glad he didn't get away with it. In Michael Lewis's new book, Going Infinite, which I've just started. Interesting. I am a big Michael Lewis fan as somebody who enjoys economics and finance as well as. Good story. Michael Lewis generally delivers on that. If you don't know, he wrote The Big Short and like a bunch of other great books. I've read them all.

And this is his newest one. It just came out. It's about Sandbank McFried. Can't Wait to Read it. And would love to have him on the podcast. So I just need to find out how to get a hold of him. But I feel like it would be a great, great chat. I'm curious how I know a lot of that book was written.

I'm not sure what it was, but I think it was a while ago. Like I think it was written maybe prior to the collapse of FTX or during the early days of it. So I'm really curious to read. He's both such a like hawkish critic of structural abuse, but also loves a good character. And I could see it going either way. Does he fall in love with the character of SBF? Or is he taken aback by the scale of fraud and blah, blah, blah, blah, everything we've been talking about.

Like, I could imagine a Michael Lewis book that goes one of two directions about Sam Bankman-Fried. And I'm really curious which direction it goes. I'm stoked to hear what you think about it. And I would love to talk. I'd love to read it and talk about it with him on the show. I think if I'm not mistaken, I think I remember in some of the group text messages

that came public through the trial. Yeah. Michael Lewis was like in the Bahamas to interview Sam when it blew up. If I could be making that up but I feel like I did read that.

Yeah, I think I might have to read this. Access journalism is so interesting. The idea of it's something I'd love to get to do and you just have to find the right subject, but to really just be like, no, I'm going to spend three weeks with you. I'll spend a month with you. We're going to document everything and we're going to create something that's really, like, not rooted in like the hour

or two that you sat down for an interview and you and I have done so many interviews like that. Great. But the idea of just embedding with a person to try and tell their story, so compelling and such a massive threat to your ability to be honest and objective and neutral about what's going on because you're like, this is my roommate. Like I hang out with them all day. It's such a fascinating thing. I'm excited to read that book, and I'm excited for the end, for now of the saga of Sam Bankman Fried FTCS and the Bahamas-based financial nuclear bomb. To speak of how it's not ending, we should chat about how a few of the former FTCS executives, fresh off the stands of testifying at the trial, are creating their own. Crypto exchange. What could go wrong?

What could go wrong? Here's the best part. They are putting it in Dubai, which, as we've covered previously on the show, is the, and this is not any indication of whether this is trustworthy or not. I'm just stating it as a fact that Dubai houses most of the scams and multi-level marketing scams that exist in the world. A lot of them are headquartered out of Dubai. And this new exchange, which is titled, Trek Labs. Trek Labs is also founded and headquartered out of Dubai.

So I think, yeah, I don't know if it's the greatest look coming. Correlation, not causation. And yet, yeah, two former colleagues of Sandbank-Madruder now starting a crypto exchange days after he was found guilty on seven charges of fraud, which is a wild look. Wait a month. I'm not saying you're up to anything fishy. That's not fair. You're allowed to have another job.

You're allowed to start new businesses. 100% with you on that. There's no indication that any of these people had anything to do with anything. All of the benefits of doubts being given from a purely optics and marketing perspective, give it a fortnight. Give it a little bit before you send out the press release saying that you are starting this cryptocurrency exchange. that had previously received funding from FTCS's venture arm. It's just not a good look. Yeah, it, I feel, but yeah, I guess it's to be expected, you know, people, people were involved.

They saw the success. They saw how to replicate the success. They saw what work. They have that knowledge, that domain knowledge. You have to expect that they're going to take it and go with it. I assume they probably won't do the whole Alameda, you know, piece of it. But I think being a large crypto exchange is a very viable business, I believe, at this point. So it is as expected.

It's just it's an interesting knock on. And yes, I do agree that maybe waiting until at least the sentencing is over would have been maybe a beneficial to the look, to the optics. A generous read of this could be that they know explicitly how not to commit a very specific. set of crimes. And I'm articulating that as a joke, but there's a, there's a like an actual thing there of like, we know what it looks like when you have corruption inside one of these organizations. We know what it looks like when one hand is like talking to the other behind its back. Like we know what that looks like. We're not going to do that. We've seen the pitfalls. Like maybe that's it. Maybe it's this is, we all had this experience. We saw the good that can be

done according to them. But we also saw the pitfalls now watch us do all of the good and make all the money without stepping in the pitfalls. They also saw what brought it down and saw what was used as evidence to ruin them. Yeah, yeah, totally. Seeing what not to do and seeing how not to get caught are very distinct things. They're really importantly different than each other. I think just to kind of wrap up the Bitcoin stuff. I think we got an NFT thing to chat about.

There's been a lot of speculation. I don't know if you follow the crypto market, but the crypto market. but the crypto market's been very volatile, typically in an up trajectory the last couple months or last month. Yep. And a lot of it has to do with the potential approval and launch

of a bunch of ETFs, exchange-traded funds that will kind of spot price crypto into real regulated securities markets, which is, to me, I can't fathom how either, I know right now it's in front of the UK Securities and Exchange Commission, and their SEC as well as the American one, but I can't fathom how they'll approve these things,

as it essentially will, it's a tacit acceptance that they are securities and always have been securities, but will not regulate the actual internal security, like the Bitcoin itself, but it will allow us to create securities around those unregulated securities. Yeah. It's a weird, it would be a strange step towards the legitimization of cryptocurrency. It's already very legitimate right now.

Hundreds of billions of dollars, Super Bowl ads. But from a purely financial perspective, it's a really big step to say that this is just a security now. For anyone that doesn't know an ETF, I think a lot of people listening to this would, but an ETF is just essentially a pooled investment that holds a bunch of other assets instead of just one. So you're not just buying one stock. You're buying a thing that's got a bunch of other stuff inside of it. It doesn't have to be just stocks. But you're buying a basket, I think.

Is that a fair way of describing an ETF for a person that's unfamiliar? Yeah, it holds a bunch of, like, well, typically an exchange rate of fund will hold, like an SMP 500 ETF. We'll hold a percentage weighted of all of the things that make up the SPF 500 basket. Crypto, like if they do a Bitcoin ETF, it will just. strictly hold Bitcoin. So we'll only probably own one one asset class inside of it or one asset inside of it. But the issue, yeah, well, there could be a crypto ETF that holds a basket of different cryptos. Why wouldn't you just have the full crypto ETF that's like the SMP 500 of crypto? It's got Ethereum. It's got Bitcoin. It's got salon. Like it's just got all of them in it.

But the thing, the thing that blows me away is just that it's like a, you know, the, largely the crypto community since I've been witnessing it. So I don't know what that would be, 2009 and onwards, 10 and onwards. I'm making these dates up at the top of my head. But they have not wanted to regulate. You know, they enjoy the fact that they're outside of the regulations. A, from a hyper speculative standpoint where there's no regulations, so they can be crazy and they can do massive leveraged investments and, you know, to the moon.

To the moon. But also on the other side, they don't really pay. Philosophical perspective. Yeah. Philosophically, they're kind of anti-massive, big government finance regulation, etc. The regulatory people have let them live and exist in this gray area, I would say, because it's not like they don't treat it as a security. The more and more, like the SEC is getting involved in crypto stuff, but they're still unregulated.

So they've kind of let them exist in this gray area for so long. And now letting them create ETFs full of this asset that they don't regulate, just seems I just can't see how they're going to do it. You know, like there's a lot of speculation that they're going to approve these ETS, but I just can't for the life of me see how they're going to allow it. Yeah. Yeah, you've been following the regulatory response to cryptocurrency for a while, and that's been something you've been talking about. Kind of prior to even me realizing that was an interesting element of the story of cryptocurrency.

And that's definitely a huge part of this. Like, will a crypto-based ETF ever get approved and what does it say about institutional finances' relationship with crypto is like a big important? That's kind of what this is really about. The second thing it's about that I find interesting and have wondered about for a long time with crypto is that I was introduced to crypto as a bold, defiant libertarian, oppositional idea to traditional finance. Yes. Traditional finance is this big corrupt thing and it's dealing in commodities. They're being produced by central banks and blah, but like that crypto is supposed to exist across a big raging river from that whole world of traditional. finance. And it was supposed to be empowering to people. Not your keys, not your crypto. But here's

this thing. It's the digital version of a duffel bag full of gold buried in the backyard. And to suddenly say, but you know what's even better than duffel bag full of gold, if we put that duffel bag in a bank and bought stocks in the bank and then put those bank stocks together and made an ETF out of it. So that wasn't about that for some of you. It was about the line going up. It was about a world where the value of a bunch of other things had already gone up before you'd gotten it, but here's a new thing that you can ride to riches. It wasn't about the philosophical stuff. It was just about that line. And an ETF would mean more people could buy that asset making your line go up further. Like it, to me, this feels like kind of saying the quiet part out loud a little bit.

Totally. That's exactly it. Yeah, I don't know. The second it goes ETF, it can attract, you know, institutional-grade investors, you know, like-pensions. Could you imagine the pension fund dipping? It's like, it's like something like the SMP 500. When a company gets rolled into the SMP 500, usually their stock goes up quite a bit because all of a sudden these ETFs need to acquire, you know, millions of shares in it because they're holding a basket of equities made up of the members of the SMP 500. So same thing will happen here is that if, if, if, you know, you.

if these become real ETFs, the more people that buy them, the more Bitcoin will need to be secured and held by the ETF. And it will cause the line to go up. But here's the thing is like, Bitcoin, should I just say has no utility? Is that too far? You said it before. I don't know why you would, I don't know why you'd waffle suddenly at the finish line. It's, it's utility versus, you know, many other ways that we can.

trade in in fiat currencies and and utility in society it's very offers very low little utility to the world the fact that it needs to be held in an ETF as an unregulated asset it just blows I just can't I just can't fathom an SEC that allows this to happen I'll be curious you'll have to keep us I feel like you're tuned into this regulatory response to crypto stories you're going to have to keep us posted on um on if one of these things exists and whose pension suddenly is going towards it. So bleak. So god,

but you know it's not bleak and we should end on. I think we can put a pin in it with this one. This is just a little one. This is petty, like petty alarm bell warning. At a large board ape NFT event in Hong Kong last Saturday, attendees had their eyeballs burned when ultraviolet lights typically used for tanning were used as part of a on

screen display. I'm not happy those people got hurt. That part's not funny. No. That part isn't funny. But some part of it's fun. I'm not sure which part of it's funny, but I'm laughing because NFTs gave people snowblindness. Tell me that's not fucking funny.

Like, it just is. I think, I think that the fact that board APA Club managed to still have a conference in today, like, I'm not sure what's going on with NFT values. I'm sure it's largely manufactured by, by people just refusing to sell, but the, yeah, I just, I'm not sure what that conference is. Is it just a party?

Like, I've seen people walking around with, like, BORDAQ clubs, hoodies and stuff on. Is it just a brand now? I feel like it is. Yeah, I think it was a speculative commodity that's value was based on a story about how valuable the brand is going to be, and now the value of the commodity crashed, and all that's left is the brand and some people kind of holding on for dear life. Yeah, yeah, yeah. For lack of a better way of putting it.

Like, I think people still own them and I think people are still excited about it. And honestly, like, if its value isn't up and it's just a media IP play of like people being like, we like these apes and making cartoons and comic books about them, I don't begrudge that even a little. It's the second they all assemble and say this is going to be worth more than Disney because X, Y. I'm like, this is just self-delusion. And I'm not happy that you gave your eyes a sunburn staring at the apes writ large 300 feet tall in front of you. I'm just saying it's quite the fucking picture. It's quite the scene.

Did you have to own an ape to go to this conference? That's a great question. I wonder. Ape Fest, a three-day annual meetup of people who own BoredApe and Fs, which still sell for tens of thousands of dollars. Yeah. Oh, amid the 2021 end. NFT craze. Got it.

Yeah, I don't know. I think you had to own a board ape NFT. I feel like that's just like, like if I was a grifter, I feel like that's the conference I want to go to. Like I feel like a room full of people that paid $75,000 for an image that was digitally generated of a monkey.

Yeah. It would certainly be a, what would you call that, the high-influence group. Hot leads, hot leads for a grifter. It's probably a sick event. It's in Hong Kong. I'll give them credit.

The graphic design on the website is pretty, it's pretty bang, and it looks good. Yeah. Totally. Yeah. It just feels like a metaphor. And I haven't taken the time because I just got back from vacation of articulating exactly how that metaphor works, but staring into a glowing symbol. that inadvertently hurts you.

There's something to that. I don't know what it is, but there's something there. Okay. FTX, Roblox, European spyware, human AI pin. Mission Impossible is influencing domestic policy.

Terminator. Covered a lot. We did. We got through a lot. We got through a lot. I'm happy to be back. Hopefully you guys made it this far. And if you didn't,

totally understand. If you didn't, I get it. I get it. Yeah, that's real. That's really valid. I think that's everything. I think that's another one in the bucket. I think we'll catch you in the next one. Godspeed. I think I need to make Godspeed my sign off. Godspeed. You said Godspeed. I was like, oh, that's got, that's got a nice. Godspeed. Godspeed. Safe travels. I could go with safe travels and you could do Godspeed. That's so, this really intense, like, is something about to happen? Like, are we good? This podcast left me with an ominous taste in my mouth.