Episode 56 — This Man Murders Scams (Feat. ZachXBT) — Crypto Critics’ Corner

Crypto Critics' Corner

This Man Murders Scams (Feat. ZachXBT) Crypto Critics' Corner

Today Bennett Tomlin and Cas Piancey are lucky enough to be joined by the "Batman of Cryptocurrency" – pseudoanonymous Twitter user ZachXBT (https://www.twitter.com/zachxbt). We ask him what it's like uncovering every fraud and scam in crypto, why he does it, and whether the Cryptocurrency Batcave has a secret "nuke scam project" button. Donate to Zach either at his ETH address: zachxbt.eth Visit his website here: https://investigations.notion.site/ Here's a list of links that were discussed during the episode: https://t.me/s/Crypto_Deleted https://etherscan.io https://twitter.com/search-advanced?lang=en https://www.nansen.ai https://www.breadcrumbs.app https://revert.finance https://t.me/EtherDROPS_bot

Cas Piancey and Bennett Tomlin are joined by the Batman of crypto twitter, ZachXBT to discuss his work investigating and busting scams and frauds. 

You can find our episode on Michael Patryn/Omar Dhanani here:

You can find Zach’s thread on Michael Patryn here:

Other links discussed in the episode:

You can donate to support Zach’s work here:

  • Ethereum: 0x9D727911B54C455B0071A7B682FcF4Bc444B5596
  • ENS: zachxbt.eth

A note on the below transcript: I have done my best to adapt the automatic transcript to what was said, but there absolutely are mistakes. If you read the transcript and go, “hmm that’s a weird thing for Zach to say” there’s a very good chance the mistake was mine and not his.

Cas
Welcome back everyone I am Cas Piancey I'm joined as usual by my partner in crime. Mr. Bennett Tomlin how are you today 

Bennett
I am doing well Cas, how are you?

Cas
I'm doing great. We're joined by someone we've wanted to have on for quite a while now. 
Super excited about this ZachXbt how are you.

ZachXBT 
I am doing well thanks, thanks for having me on guys, been looking forwarding to this as well.

Cas
Thank you for joining us I know that you are a busy man with a lot going on. Um I I assume that some of our listeners aren't on Twitter. They might not be familiar with your work and what you do can you kind of describe the the simplest way I would describe you and this is just kind of the moniker. You've gotten on cryptocurrency Twitter is the batman of crypto. Um, so. How would you describe yourself and why why do you think you've taken on that moniker.

ZachXBT 
I Mean'll be a little modest, I'll never call myself that but um, essentially what I do is just like investigate all the kind of sketchy stuff that goes on and might not be like the most honest because in the past there hasn't been really any repercussions for whatever actually some does I have wanted to make that more clear for everyone whether newcomers to both been here for a while to show the space can improve over time.

Cas
And I would say that the major difference between not not that Bennett and I have found nearly as many scams as you have we we haven't um but I think that the major difference between you and us at least on a surface level is that you're. You you own a lot of coins I presume you are a full-on coiner who's totally into the system. We're both no coiners. Um, but it seems like we're on the same the same team in some sense which first of all, that's very nice I think we've both been hoping there could be a bridge like that for a while. Ah, so it's nice to see you kind of be that bridge. Um, but I think there's a different motivation for someone who's a coin holder than no coiners. So can we talk about your motivations like why are you so motivated to clear clear out the space.

ZachXBT 
Yeah, so I just like last cycles like my like first full cycle where I was involved with altcoins and that fun staff and ICOs mess, kind of a how does the whole cycle of usual. Realize what went wrong kind of it was um, pissed um, fast forward 2018 2019 everything coming down again. He come this cycle and then it's like wow I've seen this happen before um, it's deja vu like literally um, everyone's like influencers shilling whatever, VCs popping up, money just flying around. Um so Um, fast forward on second half the board of 2020 2021. So it's been over year. Um, so. Ah, that point I was fed up with like seeing all stuff go down. It was a little bit longer than the twenty seventeen cycle so at this point I'm like ah this is annoying. It's go stop I see all I like trash people shilling on the Timeline. So I was just like I start posting this because I think, That what people don't understand is anyone that has been the space for a while because it happens the know what goes on to an extent. Well, there's really no been incentive to actually like come forward to say what happens. It's not like I've really had that incenvive but I was thought really kind of f out with. Hopefully um, can be the voice to some extent and um, help some of these people are are new.

Bennett
Do you do you remember? What was the first project you wrote about or tried to describe to the people that you consider to be a scam or fraud.

ZachXBT 
Yeah, so just the first thing I did was may 2021 is Scott Melker bound was this kind of promoting like um, Initial DEX Offerings essentially when you project launches um, but just with those. But is not the most quality of projects you never really disclosed that he's compensated to promote these what I have uncovered was um, he was selling to his followers and built all happening for public ENS address. So it's happening in plain sight and here's a funny part. Um, sure you guys saw the Telegram called Crypto Deleted, so it essentially has like the deleted tweets for um, peoples with lots of followers and actually recently like had gone through and deleted a bunch of these, he was like oh maybe no one noticed him. It's like two months later he deletes all this. 
And then like god it's how what prompted me to like go work. That's at the start I never really expected to like expand to like getting a bunch of followers. So I guess's one of the other things is why people when I started would claim I was doing it for clout and stuff like that because in the past there've been some of people that have done like I've done. But. They haven't been around for as long. Well it maybe did for a month or 2 there for forgot the account vanished um, but the kind of one I guess you consider in for a call I been doing results for a year now and besides like recently I'll be able donation address, but besides that there hasn't really been any type of compensation.

Cas
That brings up a good point I think um, you you've been doing this for a year without compensation like you said, um I think that the question like if I we were. I wonder if you're doing this for free I understand that um I also I also. Assume that you're sort of like at least somewhat independent ah independently wealthy from the coins that you've purchased and the amount of value that they've accrued over time. But you've gotten some serious backlash from people. Who were invested in these projects when you expose them or when you show these individuals totally breaking all the rules that have been in place forever. Ah, how does that affect you? How does that affect you obviously I can understand not in the best way but like I wonder if it makes it so that you don't want to do this as much anymore?

ZachXBT 
I'd say to a point. Yes I Guess you just learn to kind of just silence the noise over time you don't really like I don't know develop a thick skin um is' kind of a part if you been on the internet for a while you kind of are just coming into it or you're sensitive So I have always been the type where it kind of sucks I'm not going to lie but and I know I'm doing well and' one of things I say like I'm not compensated, say one of the things that has happened is I'been introduced to people that have the same kind of interest align with mine. They are the good people in the space that want to push forward, they want to change, and if I had't started producing like the type of research I have been doing I probably would not have all met the same people.

Bennett
What impacts or changes. Do you hope come as a result of your work in the space.

ZachXBT 
Yeah, that's a tough one I mean a couple people have asked me that on Twitter DMs all time and I guess it needs to be some balance obviously everyone want self-regulation to work because in a perfect world that is a so everyone's like f the Government stuff like that crypto but the reality is self-regulation has only worked on the person who is already genuinely dislikes because if you look at like people like BitBoy and MoonCarl and if you can post anything related to them that they've done out of the kind of sketchy. You will get tons of engagement versus if it's someone that people already like or are against their viewpoints because you're a bagholder or whatever then um, it's kind of gives less fraction and people are saying stop the FUD and stuff like that.

Bennett
Yeah, it it is kind of interesting how on crypto Twitter 2 people who do like the exact same thing can end up treated so differently just because of the social dynamics and which ones are better liked among the crypto Twitter leaders.

ZachXBT 
Yeah, definitely I think other thing is at some point it's an ? I means clear self regulation hasn't worked I'd like it to and a perfect one does but the government's going to interfere and we've already seen that um like in some countries like Dubai, the UK, Spain they've announced, that to where they're just not cracking down on people doing the seedy things in space and shady scams I mean I say that but I mean they're still persecuting. Ah 2017 ICO like BitConnect. So maybe in like 50 years they'll catch up a little little.

Cas
Yeah I I think we share that frustration with you where especially when it comes to the most flagrant frauds you want you want to see some action from like if if you're going to believe in any government regulation. You're kind of like okay, well then. Get the ones that are the really bad guys and they're like what about this? Ah random day trader who inside traded for one hundred and fifty thousand dollars and you're like are you are you joking right now like what are you doing? Why are you wasting everyone's time? Um, but it it almost It's interesting because it it almost shows like. Failure of self-regulation which is obvious um, but also the failure of government regulation at the same time and it it it forces people like you who just eventually get so annoyed that you have to start like I mean in a sense. I'm sure you've had to burn bridges I'm sure you've had to like ruin relationships with people because you're like dude I think you're a scammer you know.

ZachXBT 
Or yeah there's been countless ah people like just like don't want to associate with me anymore me I can't see to start I want to I'd say like in general this industry where everyone's close you want to be as neutral as possible to everyone because you never know when you might do business with them or whatever regardless of how you feel so like burning those bridge is definitely like hurt to some extent then also just like the amount of ah projects or people I've reached out for you business with um so based off my politeness and brand that I've built up so I've had to turned that down as Well. That's me. Um, so but or don't really want to ruin that.

Cas
And I think we have the same perspective in that it's like we perceive the perceived um reputational risk for like advising any of these projects or like taking on any of these projects or showing any of it even seems. Possibly far worse than um, not taking any of that risk at all. Ah I know that you're accepting donations now which we'll leave in the this is going to be a first for us so we'll leave the the coin address donations if anyone wants to donate to your um. Your wallets. But but yeah I guess this is like I do you think it's going to be worth it for you and do you think that are like are you going to try to build a team around this like ultimately do you see it as a you want to fill a function. In the marketplace or is this just a hobby for you.

ZachXBT 
I've always been kind of like see where it goes type thing. Um, but I do think there's enough like people have have been here and one point the space to succeed that and and some um some of the people also reached out it want me at least for some extent to. Um, grow this into something so I think at some point there will be it will go to something more where it can be like a more reward grants from DAOs or these people coming together I think there's a couple different options there

Bennett
Ah, which expose are you most proud of either because of the work it took or because of the impact it had.

ZachXBT 
So I said I think the first one I guess that I was really happy about proud of the work I did was  New Rock Capital it was essentially a VC fund that sprayed and prayed, they also incubated all these cash grabs. They were the first one to do like launchpads. It's called ? or a couple like to interview a couple cash brags. So essential I put 2 and 2 together I kind of researched um like what the projects were what they all have the same awful tokenomics designs. Where there's 0 vesting majority of token supply goes to vcs and influencers. They can start selling very early. It's kind of the pattern you notice like this funds that spray and pray. Anyhow for New Rock Um I went kind of analyze the first few weeks of um sales. Um, for pokemarkets I think essentially for both of these ah because such huge unlocks TGE, which is token generation event. Essentially the token launches but anyhow I looked at it for a couple weeks, looked at all the large sells. A couple wallets from like  the private sale and stuff that were dumping huge amounts very early on and it's kind of like lead words. Fast forward a few months and it's a bull market and these projects should be going up but these projects somehow are down ninety plus per percent after being hyped by all these so-called influencer gurus. So like it's the most bullish thing I've seen and like um what do You know.

Cas
And so you you've been like the the the one you're mentioning now I don't know how long ago that was but you've done so many scams and called out so many scams and fraudsters. Ah I Guess my question is I assume that people reach out to you. Try to tell you about things that are going on if not like are you doing all of this work on your own. Are you do you have a tool that like are are you do you have a license for chainanalysis like how could you spend so much time examining this and. If you have a team like is it a few people or if you don't have a team are there. A lot of people coming to you I know this is a lot of questions at once. But.

ZachXBT 
Yeah, so so like it's just myself, I have like people I always like have a DM and said if you need help reach out or otherwise you need to be to connected to someone reach out so it's kind of like that. So even though it's like myself there are people out here that want to help out if I need it. So it's. Um, never really just myself. At the beginning Um, it was mainly just me researching by myself over time this changed and I've started to receive more Dms as I've grown in popularity. Kind of inevitable but many of them would just like people out get scammed by like a um phished by a site like it will be a website of a your swap. It will be like Uniswap with like an extra like a letter like misspelled and they might connect to their meta masks or something to them. Ah, scammed that way. Um or people asking you to send money, advertisements say fun stuff. Lots of trash. But every so often there will be a decent tip. Then there's also been a couple things where they try to black mail me into like posting what they want. To do it just like messed up, They're like hey why won't you do this? So I always told them like write your post and if it's done well I will retweet for exposure then if we actually materliazes because they just want me to do everything, they don't want to actually do the work themselves.  So it has been kinda like that.  

Bennett
1 of the things you mentioned there is something that's been really challenging for me is like just the Dms you get of people who get caught up in the petty scams the phishing scams or buying like the clearly fake icos or idos or ios or whatever and for so many there's just nothing you can do. And once you start working on frauds in the space. You start getting a lot of Dms like that I just it's not really a question I just always feel bad because you get so many of these Dms from people who lost their money and there's nothing you can really do and all you can really tell them to do is contact your law enforcement. They won't do anything but there's nothing else you can do at this point.

ZachXBT 
Yeah I know exactly what you're talking about.  I've certainly felt the same at times. It's tough now because I'm really receiving hundred plus Dms a day all hours of a day. It's just not humanly possible that like you can respond to everyone I mean everyone's like get an intern and stuff but like it's hard to find someone who can trust. Um, who once like to do this and also for very little pays like I'm not making much office so it's just like a tough situation to me though I don't really trust anyone else and read all DMs because like I've kept everything. It's private. It's only me for now, don't really trust anyone else to see my DMs.

Cas
And I think a big part of the issues that we're seeing and and you brought this up in some sense is that we're in a bull market right? Or we've been in a bull market for a while. There's this dip obviously in bitcoin and and and all of that. But um and I talked we talked with with Molly about this. As well I think there's this concept during bull runs that like there's no time. There's no time to research. There's no time to to look at who's making sales in the first weeks or what like what to audit the code or to there's there's just no time we need to invest. Right now. So I wonder if you've tamped that down for yourself or if you still feel like you're still like hm well I go out there I buy something maybe I don't do as much research as I should but in the meantime you are doing a bunch of this other research or if this has influenced your purchasing patterns.

ZachXBT 
Yeah, I would say I really haven't traded much all over the past like since I started doing it because because I simply don't have the time I mean there's no couple things like if I'm in a chat with friends and like they say like it give like a good rationale I'm like why this thing will happen and then.  I'll be like Okay doesn't hurt to put something into itI'm not really researching hard or tracking wallets anymore more and stuff like that just because it's not feasible. It's not feasible at all.

Bennett
Um I I was inspired by a thread you wrote in the last couple days to ask this question. Um, what are the lessons You think that it is important someone new to crypto or Nfts learns quickly. To survive the space.

ZachXBT 
Yeah I think this falls everything everyone falls into this at some point I always 99.9 of people stop trusting people blindly like I think in every instance there's you're following people the think like in the first join the space. So. So say super smart I know exactly what they're talking about and probably join the markets like very risk on. So everyone everything's going up. Everyone's making money so they they like oh wow, this person's a genius and then the lights start falling. That's what kind of where it goes downhill again. We understand that like there is no cheat code, like following these people who you like actually research why like why, why do they rep this project, I always tell people that I was like once someone tweets about like a low tap or whatever kind of project you ask yourself why you tweet about this. What which a random shit coin you see like 4 influencer just the same time tweet about it that it's most likely they were paid or something or they like maybe even started the coin themselves like when something those patterns like that of how actually click of like ah how it actually works ends I think even now like a. People say know after work seeing my thread but still work fall victim to it or don't get through the before what they retweeted and even know they like saying you know they don't like I know I really know if it's something like can fix but like if she start customary people and or do like actual research. As cliche as that is.

Cas
Um I wanted to chat about the Sifu event because I think that relates to everything that we're talking about really? um, arguably your biggest reveal ever. Ah. We're talking about. Ah essentially I guess at the time it wasn't worth this but a billion dollar protocol ah created by Daniel Daniele Sesta and you we we did a full episode about this if anyone wants to check it out. We're also going to go ahead and link to the thread that you did when you initially exposed this all. Um, but the short summary here is that this massive protocol that was being built had someone named Michael Patryn involved in and in charge of the treasury in charge of all the money and this guy Michael Patryn has previously been involved with quadriga cx though he claims he. Had nothing to do with the money that was stolen from there and taken from there and he's been like he's a committed. He's like ah a burglar identity theft like fraud. So he's not exactly a robinhood type guy. He's um, but his argument was that. He had done nothing wrong and that he'd only created value for wonderland and magic internet money and a lot of people seemed to like support him and still do did you expect that that.

ZachXBT 
So when I see that the first thing I go back to is the governance vote. So after like this came out all a few years after the governance vote happened to like a remove Sifu I think was 87% voting favoring 13% didn't and about 13% included Sifu and he made up like four or five percent of that portion but um I cant always point back to that because governance does not lie the clear majorities coted to remove him and I think the majority did want him out, regarless of whatever value can argue that he added. The facts don't like that he had a background that was not really the most um white hat, the most traditional. Ah and I not really as an investor with that to be the person leading my protocol at least unknowingly. Perhaps to start. That had been known like I only think you would have to like doxx himself, if he had said "hey I have a criminal background" or something that I think there people might have been more receptive to at least be like I Don't know from the start.  But I mean it's not like Wonderland didn't have red flags from the start. I did a thread kind of early on in October and it was kind of on the launch of Wonderland, it was supposed to be like a  fair launch.. Their whole model was like Frog Nation for the people f the VCs or those was like the whole narrative. Reinventing finance stuff Defi 3.0 like all that kind of stuff or what the launch your decision was like a secret seed op and secret group of people that would actually fund the project initially and then a couple of people also pursued like ? the op supply. That's kind of like what happened um and the after of that kind of all OHM folks took off do pretty well but like the key reoccuring theme that was like part of the sketchy was Wonderlerand had a huge lack of documentation. Um I believe I forget what the Twitter account was buts like 1 like. Like web rugs or another one they kind of just look at all projects to see like ah it might be basically just to see what the documentations like or like compare it role with others in a different score and Wonderland scored very poorly. The other thing was it was the um Sifu was like in charge of the treasury. But. The sketchy part. Yeah, typically done from the multi sig and everything like that Sifu was executing all these transactions from his EOA address address just like his personal wallet but he's doing a bunch of these large transactions from that that's like a huge risk.  Um, especially with his criminal background but people do not know all his intentions only he knows. He's doing with millions of dollar on his personal that belong to the treasury. That's a huge risk and it was never made known. To the public of like what it was. There's a bunch of FUD threads I just could say popping out before under ah Sifu stealing all his money. He wasn't.  He was executing transactions on behalf the treasury but like it' not want people to go because it wasn't documented anywhere to like of course you're thinking that. At the same time I think there's no ever conclusion of what the exact payment um process was for them so I messaged Dani I'm like how much are you guys getting paid and like there's some FUD thread about you guys getting paid millions and it's like. They were actually paid 5% of all TIME in circulating supply.

Bennett
Wait that he got paid 5% of the time circulating supply. You said.

ZachXBT 
Yeah, and that wasn't documented at the start, but was later on.  

32:19.38
Bennett
Well and then that brushes up against what happened a couple days before your reveal thread of Sifu being Michael Patryn slash Omar Dahani where ah both Sifu and Dani started to get liquidated on their leverage wrapped memo positions. When the price fell below the backing for time and while they were both sending all their stablecoins to bitfinex. So that's just striking that. Yeah, so yeah, and.

ZachXBT 
Yeah, it wasn't really sustainable at all, like the APR, like all of people on Frog Nation like is just the you like first time DeFi people seem like and they were like and usually attracting it was like the 14000% apr and then also like. The thought of like passive income, like I'm earning XYZ, and I will never need to work a normal job again.  It's not sustainable at all, and they were being sole a pipe dream.  Essentially they were using the treasury as like their personal VC fund.

Cas
Obviously all 3 of us I think have very different motivations than the people that we're talking about right now and when you see something like this happen. As as we all do right? I mean the space. The space is rife with these like you. You really just have to dip your toe in to find a ton of scams. It doesn't take long to find them. It's more about investigating them that takes ah a lot of time. Um, but what do you think like Sesta is so revered in this space. For whatever reason. Um, and like what what would what could possibly motivate someone who has who now has the reputation the glowing reputation to kind of just be like to throw it into the wind and be like you know what? let's hire Michael Patryn like what could what do you think is what do you think is that motivation. What do you think is causing someone to kind of act out in that way. Is it just the bull run is it just make money make money fast break things and.

ZachXBT 

Um like when I reached out to Daniele, for those that don't know, before I revealed Sifu was Michael Patryn, when I did that so one of the things I did was like how do you explain that, and he said that in summer of 2021 Sifu was an investor in Spell, however, Sifu interacted with him early in that and started bouncing ideas off Daniele about what they should do and what their vision should be.  They hit it off from there and essentially decided to found Wonderland in September.  That's the general gist of how they met.  Fast forward to January when I found and confronted Daniele and he explained that he didn't think anything was wrong, and thought Sifu had changed and it wasn't a big deal, but I guess he was maybe kinda blinded in a sense.

Cas
Yeah, but even if you even if you even if you do believe that which fine I don't know what is going on in his head right? None of us do and that's this is like a speculative question in that sense like fair enough I'm not suggesting that he's like trying to screw everyone over but I am wondering like. The the solution there right? If you're like well it seems like he's changed and I want to give him another chance and I like him and he's doing a good job if that's genuinely how you feel maybe you should share with the community who he is and that you feel that way that you do feel like he's changed and that you you want to give him another chance because you. You think he's doing a good job but instead to choose to hide it I Guess that's where I'm like what is that Motivation. Why.

ZachXBT 
Yeah that's that's why I didn't really want to wait to release it after I confronted Dani and he admitted it.  Just for the fact that I don't want to let him weasel out after he has months and months to let people know, and it's not my fault that you have kept this hidden, and thought it was not a big deal, when it is a big deal, and investors need to know. 

Bennett
Yeah, it's It's a well and it's striking for me because it's an example of a case where clearly this information was potentially like potentially harmful to the protocol and investors. Um, most.

Of the price decrease happened before you did the expose like from the all-time high of TIME but it still did drop significantly when it was exposed that they trusted millions of dollars to a felon and known scammer. Um, and so like it it is a striking. Cast scant here. It's striking for me that these protocols take what is in effect this or that Danny in specific was taking like this pretty meaningful risk for his investors in the protocol as a whole by keeping it quiet and hoping he could keep it close to his chest. Um, and it's. Not uncommon that you see things like that in crypto where the stated ideology is transparency and revealing all this and trying to create a financial system where more of this information is public more people can look into this. And because of that we can trust it more and then the projects that are claiming that are often doing the opposite which has always been a disappointing part of interacting with crypto for me. Um, so I I guess my question is just do you have. Do you have any thoughts or beliefs on what it is important that DeFi projects do reveal and what it makes sense for them to keep more private if anything.

ZachXBT 
I think like the first thing in crypto that all be on the blockchain they should be out there so investors can make decisions like so these like cash grabby projects. Um, try to highlight who invested what price um like the vesting of these. Projects. We also try to like see if what the actual tech we have and stuff like that I you all remember like a Walton change Dragon Chain number for that 1 dragon was like all with the fake Disney Partnership so I always like trying to like drag the hype that way and then. Used influencers and large YouTubers to create like false narratives that aren't really exactly true. So. It's always like kind of create too much hype, wish it was more realistic. Can be really po to start like being more transparent on the side of investor. So like what they're doing um and like what measure you have in place to make sure people aren't getting  dumped on at least if they are, hopefully they can like be able to see that at the start. Have you seen the NFT market place LooksRare like the bunch of people from crypto twitter invested in or there is times push back there because they don't really publish the investor' list, I actually posted that like very early on because I checked the chain and saw like the giant list. So they won't post about that, but they will post about the tokenomics like the emmissions are more huge just because you would pay out massive awards and like people eventually come a few weeks a month later like upset because the token price is down a bunch.  They had very detailed docs on what would happen to token supply and how fast it would increase from these rewards and other stuff happening.  People don't read the docs, so the end of the day projects need to be transparent, but the same time you can't really fault when there's so many idiots investing who don't read anything.

Cas
I in in the regard that ah like you said there's a lot of idiots in the space who will just invest in whatever horrible project exists. There's been a lot of talk lately about short sellers not in cryptocurrency but short sellers. In traditional finance. Ah, a lot of them are kind of getting in trouble with the SEC right now. Um Andrew Left is a well-known one who is being investigated and had some of his hard drives taken because of I guess his short selling. Um, but I I and I believe Bennett. Also I I see value in short selling I don't do it anymore. Ah, and my brief stint doing it while I didn't lose money doing it. It's incredibly risky and difficult. Um, but I wonder how you feel about short selling and I wonder how you feel about like. You you know that you're not seeing the kind of returns that you'd like from just exposing these scams. Do you ever think to yourself like maybe I should start a ah you know contrarian ah investment firm where we short sell bad projects. Or do you think that would take that would take away your reputation.

ZachXBT 
I think that would take away at least if I was releasing any kind of research on Twitter or medium, I think that is kind of disingenious.  Do you guys remember this one? The one shorting Chainlink? Zeus Capital.  I don't want to completely burn my reputation on something like that, I'm probably stupid for not shorting some of these projects, but I don't think it's worth it long term, because everything in this space is reputation based, and once you damage that it's really hard to get it back, so is it really worth it?

Bennett
Yes, Zeus capital. Yeah yeah.

Cas
Yeah, yeah I.

Cas
I I just want I I I obviously I agree with you I think ah Bennett and I have like we're the most risk averse people talking about cryptocurrency probably this guy won't he will tell the government his exact tips when he was a waiter.

I've never heard of anyone that does that but ok, um I I get that we all have similar reputational kind of concerns risks and concerns. But then you think about people like hello I'm Morgan and like don't you ever go like. Maybe there isn't that much reputational risk. Maybe you can just keep scamming. But.

ZachXBT 
Yes, sure you can do that, and find like minded people at the same time.  But I mean at the same time, anyone who you would want to be associated with will not want to be associated with you. Sure you will be making money in the shortterm, but longterm.  I mean look at Meca.  She's a good example, Look at all these grifers and influencers who do all the sketchy stuff, and then try to preach act like philosophers on Twitter, when in reality that's not the case.  Anyone who has been in the space in for a while and is respected knows this.  But noone actually, they can't change what they did in the past.  Everyone deserves a second chance but when you're hurting people over a sustained period of time, I mean there's only so much you can do.  People won't want to associate with you.  At the same time I probably could have shorted some of the projects, but many are low-cap shitcoins that don't have the liquidity, and so there's no real way to short, and same for NFTs.

Cas
Yeah I think I think that I'm glad I'm glad that you're similar to us where you're like woo I'm not trying to screw up my reputation. But I think that's actually a really good point which is like shorting in cryptocurrency is even more difficult than in traditional finance which is already incredibly difficult. So It's ah. The ones who can get away with it are lucky because like you said it's so easy to manipulate low cap stuff like if the market cap is low enough if those coins are a liquid enough. Anyone can move those markets in whatever direction they feel like so I think that's a really really good point and.

ZachXBT 
Yeah, so I think like the one way you could do it like if I was or someone else was to start like a firm like that where you like short a bunch of these shitcoins.  That are listed on Binance or somewhere like that, is to have a giant list of shitcoins and their vesting schedules and unlocks and you could use that on exchanges like Binance.  Have you seen GCR? He's a FTX whale.  He doesn't tweet anything out FUD wise but has made a killing shorting these shitcoins with awful tokenomics.  Hugely inflated FDVs and stuff like that.  That's the first thing that comes to mind when I think of shorting projects that's not like dropping FUD.

Cas
That good point. Yeah, not and not something I neither of us are neither Bennett and I are gonna be doing that. But for for anyone who is interested in I think I think shorting is one of the few ways people still have to try to self-regulate I think it's often like you're talking about you can. You can end up being on the wrong side of that where you're FUDding and you you become the opposite of a bag holder which is not what you want to be so um, ah, it's good, but it is good for people to know that there is methods to attempt to short I think a lot of no coiners would suggest that. Yeah, having your tether or your usdc on ftx or on Binance ah would be it'd be hard to argue that any of us would feel that safe. But I know that that's different. It's a very different. Um, ideology for anyone who's trading regularly. So I understood what.

Bennett
Ah, Zach are there any? Um, so we talked about kind of the red flags that you think someone new to the space should be aware of um, are there any techniques or things that. Ah. More advanced user a crypto journeyman who's been around for a bit who wants to better understand the actors the connections in the space. Are there any techniques they should try to learn.

ZachXBT 
Hopefully using what you like' Etherscan religiously or whatever the block explorer is for their trading shit coins or to say there's so much information there and it's literally free and it's the most underrated tool, team, whatever, I'll show whatever about Etherscan because it's such a useful tool.  So many people who are successful in this space could not survive without it.  Let's you track what whales are doing, and everything in that nature.Yeah. Just very useful. Yeah I think it's very and maybe underutilized spot newcomer in what else like ah for so many times you something that something happens like or it comes out like a few months later it's like the people check the chain. It was like right there in front of them the whole time. Just.

Bennett
Ah, yeah I remember that actually with your Sifu reveal because Taylor of my crypto wallet was ah when she went to look at it after you revealed it. She realized that she had flagged the Quadriga address.
On ether scan years ago and you could see the funds being moved from that wallet eventually funding one of Sifu wallets and so like the information was there on the chain the entire time but because no one had really thought to look before then it had just gone. Unnoticed.

ZachXBT 
Yeah, for sure I definitely mean I I think she actually showed that with these, one thing to add I think at the time um he like 1 the major draw places actually trade etherereum and even though it was like thousands and thousand of Ethereum but the Ethereum price was so low. It was only like 15-100k.  In the grand scheme of things you could have looked and realized it was a ton of Ethereum in retrospect, but the price was so low back then, there were so many big transfer happening from quadriga, yes it was there, you couldn't depend on that, you couldn't make a well-educated conclusion on that.  

Bennett
Certainly yeah, definitely agree that it was not on its own damning. But I think that if more people had been doing what you do and looking on the chain there would have been more people interested in querying it or asking about it in it. Hopefully would have been brought up sooner at the very least.

ZachXBT 
Yeah I think another tools that's underutilized I this is very basic but just like um Twitter search I mean you sure what you can use with that which just like I guess this is more useful for newcomers like searching someone's handle User name whatever also type key phrases IDO, certain ticker, some of the stuff like that you can see when people all tweet about it at the same time, like right at the launch of the project.  You can start to piece together like how stuff is run that way.  That is something newcomers can use to understand how it all works.

Bennett
Even sometimes you can like search a wallet address or something and realize that a couple of things you thought were distinct were actually the same entity. Yeah.

ZachXBT 
I definitely do that, same with ENS

Cas
I do do you only do you only use etherscan and like I I mean I assume like you know, whatever it is like blockchar or something. Um, do you only use like basic search search methods like that or are are you using some of the more sophisticated tools that are available. If you have the right amount of money I guess like I I would love to have a chain analysis tool. But I think the license is 10 grand or something like that.

ZachXBT 
Yeah I think, I have heard they're actually really stingy about who gets access.  So only like big firms like that get access. I do use ?  it's free it you see like what people had deleted a tweet about a project. Um, also just like Nansen, a decent one, just to see how like wallets are labeled and stuff like that.  The main thing I've been using is somethign called bread crumbs. It's kind of like chain analysis for retail I wouldn't say retail, but just one who can't get a subsciription.  It's only limited to two, Bitcoin, Ethereum, and Polygon.  They do have ERC-20 tokens, and you can visualize where funds are and they have exchanges labeled.  It's way easier than just poking through Ethereum and trying to draw a diagram or something like that.  Then another useful tool I use sometimes is called Revert Finance in that one you can kind of see like um because on Uniswap, one of the most used DEXes are though a round in crypto and can analyze people's Uniswap v3 positions to see how they profited from them. On Etherscan you have to manually do that.  Here, you can see, I did it recently for a shitcoin called ? and then if you use Revert Finance and you would be able to look at the Uniswap v3 position and see they added a single sided position of the shitcoin and after that withdrew the Ethereum and the shitcoin.  So, they're inserting the shitcoin, after that they're swapping it for Ethereum as well.  This is how they were getting rid of the shitcoin for Eth.

Cas
Then my something I haven't heard for a long time. But I think it applies here very resolutely is Bennett and I used to be. In in kind of what people were trying to be nasty to us I think they would call us armchair detectives. Um I embrace that title actually I like the idea of an armchair detective I like the idea of someone who's at home. Maybe they just have nothing to do all weekend or they have the week off from work or. Whatever they're bored when they're not at work and they want to spend time sleuthing online I love that you're sharing some of these tools because I think actually armchair detectives can oftentimes expose more than journalists and other people who are worried about access who are worried about um. You know, getting the dotting every I and crossing every t and making sure that you know essentially no one threatened even threatens them with a lawsuit armchair detectives can go in with these tools report what they're seeing and say like hey this looks weird. Can someone else confirm this and I think. It's a super important thing that that is going on right now and I'm so glad you're doing it. I'm so glad you're doing it. I'm so glad you're sharing these tools with people. Um I think we've got all the wrecks you have for retail traders and and all of that stuff. Is. There is there a best way. You think people could use their time if they do want to start investigating if they do want to start? um, being armchair detectives at home and and maybe writing this stuff up in articles and stuff what? what What do you recommend for for getting your foot in the door on that level. So.

ZachXBT 
It's a good question.  So like let's say you don't want to be an armchair detective and just want to trade.  There's a good tool called Ether DROPs, a free telegram bot, they have moved to other chains as well and you can effectively mark unique addresses and get notifications when they do a transaction.  You can set some parameters.  You can track a wallet with a high win rate and try to copy trade it, and make some money that way.  It's also good for sketchy addresses so you can follow a hacked address, like the Wormhole exploit, it's been dormant for a few months or years, and when it moves you get a notification.  So people can start by adding addresses they find interesting, start classifying into certain areas, and make sense of all it.  Trial and error.  There's not one strategy that fits them all.  
Bennett
Do you have any closing thoughts you want to leave our audience with before we wrap this episode up?

ZachXBT 
I guess just do your own research.  

Cas
I well with that beautiful cliche I guess that wraps this episode up Zach. It has really been a pleasure to have you on here I hope we get to have you on again someday soon that that the next time you expose some crazy fraud tomorrow. Um. Ah, we get to have you on again. So I I really appreciate it and thank you for talking to us I know there's a lot of coiners out there who just fucking hate us. So it's it's nice It's nice that you're not 1 of them and and and thank you. 

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