Critique of Cryptocurrency: Ben McKenzie Releases Documentary on FTX Collapse and Market Risks

American actor Ben McKenzie, known to audiences from the series The O.C. and Gotham, has presented a documentary titled Everyone Is Lying To You For Money, where the critique of cryptocurrencies becomes the main theme. The film continues the ideas from his book on the crypto market, co-written with journalist Jacob Silverman, and takes viewers back to the events of 2022, including the FTX collapse.

McKenzie has an economics background and became interested in cryptocurrencies during the COVID-19 pandemic. According to him, low interest rates and fears of currency devaluation pushed many retail investors towards digital assets.

• For some retail audiences, Bitcoin appeared as a way to protect savings from devaluation.
• Investors were attracted by the opportunity to quickly profit from rising prices.
• Weak trust in traditional financial institutions heightened interest in digital assets.
• McKenzie quickly doubted this logic: if the price mainly relies on expectations of new demand, protecting savings easily turns into a risk of losses.

Why McKenzie Opposes the Crypto Industry

Initially, the actor understood what attracted people to cryptocurrencies, who distrust large corporations and their influence on everyday life. However, over time he concluded that the rejection of money regulation does not solve the problems that arose after the global financial crisis but merely shifts risks into a less transparent environment.

"Transferring trust, which money relies on, from the public sphere to the private seems to me a very bad idea," said Ben McKenzie.

In his view, the cryptocurrency industry resembles the largest Ponzi scheme in history. Critics argue that signs of a bubble appear when the price of an asset rises not due to clear utility or cash flow but due to an influx of new buyers and faith in further growth. In this logic, early participants profit while the market is fueled by expectations, advertising, and fear of missing out, while late investors bear the main risk of a downturn.

In 2022, McKenzie opened a short position against cryptocurrencies, betting on their decline. The actor shared that the money earned from this covered about half of the expenses for making the documentary.

Interview with Sam Bankman-Fried and the FTX Story

One of the central episodes of the film is McKenzie’s conversation with FTX founder Sam Bankman-Fried, who was later convicted of fraud. The interview was recorded about five or six months before the exchange's collapse, making it an important part of the narrative about how trust in one of the most prominent crypto platforms turned into losses for investors.

The film also features FTX investors who lost funds after a mass withdrawal from the exchange. This outflow revealed an $11 billion deficit on the platform's accounts and became one of the key symbols of the 2022 crypto market crisis.

What Risks Do Cryptocurrency Investments Carry?

The story of FTX illustrates why the crypto market can be particularly painful for retail investors: losses arise not only from price drops but also from issues with platforms, asset storage, and rights protection.

• High volatility: prices can rise sharply and fall just as sharply.
• No guarantees of fund recovery: if an exchange freezes withdrawals or a project collapses, retrieving money can be difficult.
• Hacks of exchanges and wallets: mistakes in key storage or weak platform security can lead to asset loss.
• Weak investor protection: with insufficient regulation, retail investors have fewer clear tools to protect their rights.

How to Reduce Personal Risks

• Use hardware wallets for long-term asset storage.
• Do not keep all funds in one asset or on one exchange.
• Check the reliability of the platform, its reputation, and withdrawal conditions.
• Protect accounts: enable two-factor authentication, store seed phrases offline, and avoid suspicious links.

The Drawbacks of Cryptocurrencies Beyond Investor Risks

Even without considering the price, cryptocurrencies have technical and practical limitations.

• Mining can require a large amount of electricity.
• Some networks process transactions slower than traditional payment systems.
• Scalability remains an issue when the network must handle many operations simultaneously.
• For the average user, wallets, keys, and fees often seem more complicated than a conventional banking app.

Cryptocurrencies, Politics, and Trust in the Market

Mackenzie testified before the U.S. Senate Banking Committee and participated in forums related to cryptocurrency fraud. The film also shows his testimony in Congress, where the circumstances surrounding the collapse of FTX were discussed. The United States in this story appears not just as a place of events but as a platform where the debate over digital assets has reached the level of state policy.

Amid such discussions, major platforms like Binance are often recalled alongside the topic of the crypto market, the position of regulators, including the Securities and Exchange Commission, and the broader debate over where investments end and gambling on expectations begins.

If we break down the debate by participants, the picture looks like this:

• Russia: the crypto market is discussed as an area where risk control for private investors is needed.
• The Central Bank of Russia: emphasizes financial stability, investor protection, and control over the movement of money.
• China: associated with stricter restrictions, where reasons include control over the money supply and combating illegal operations.

For states and banks, cryptocurrencies are dangerous not only due to price volatility. They are concerned about the potential loss of control over the money supply, pressure on financial stability, and the fact that digital assets can complicate anti-money laundering and counter-terrorism financing efforts.

Bans and restrictions can take various forms: blocking the operation of exchanges, prohibiting payments in cryptocurrency, limiting the exchange of digital assets for national currency, or enhanced scrutiny of transactions. In practice, this does not always destroy the market but makes the entry, withdrawal of funds, and everyday use noticeably more complicated.

A separate risk is that a sharp drop in the prices of digital assets can hit investors, related companies, and trust in the markets. Additionally, cryptocurrencies are used in illegal operations, and tracking transactions becomes complicated when money passes through different wallets, exchanges, and exchange services.

The political backdrop only intensifies interest in the topic. The U.S. president, whether it concerns the current administration or figures like Donald Trump, inevitably faces questions about financial regulation and trust in the markets. Moreover, skepticism towards cryptocurrencies is voiced not only by politicians: Warren Buffett has long been one of the most well-known critics of such assets. His main argument is close to Mackenzie’s position: the asset does not create cash flow, and the calculation is often based on the expectation that someone will buy it for more in the future.

Mackenzie emphasizes that he does not try to convince staunch supporters of cryptocurrencies. His film is aimed at those who are just beginning to understand this field and want to grasp why promises of easy money can be dangerous. Even technical details, whether blockchain, computations, or the central processor as a basic element of any digital infrastructure, are secondary in his presentation compared to the main question: whom do people trust with their money and why?