When Sam Bankman-Fried’s crypto empire began to crumble this week and reach unbelievably stupid new lows, I knew I had to get on the phone with the writer behind the Substack newsletter Dirty Bubble Media. Since January, Mike Burgersburg (a pseudonym) has been diligently tracking the sketchy mechanics of the crypto economy. He plumbs the complicated blockchains and wallets and clarifies them for readers both interested in and weirded out by crypto. He’s often uncovered important developments before the rest of the tech and crypto press covers them, making Dirty Bubble an essential resource for anyone who wants to understand celebrity NFTs, market crashes, and the rich people who’ve poured all their money into these strange finances. For a while now, he’s also been keeping close watch on Bankman-Fried and his companies—Alameda Research and FTX—and warning of potential dangers to come.

I spoke with Burgersburg on Thursday evening, after FTX lost a chance at getting bailed out. Since our conversation, even more has happened: The Securities and Exchange Commission is looking into Bankman-Fried, his net worth has plummeted to zero, he’s seeking the counsel of a former Enron lawyer, and his companies have registered for Chapter 11 bankruptcy. (All the other firms that depended on them are also going for broke.) Oh, and Bitcoin is crashing again. Still, Burgersburg had plenty of valuable things to say about tracking crypto, how to be a properly skeptical follower of this strange world, and what could happen next as the disaster compounds. Our conversation has been edited and condensed for clarity.

Nitish Pahwa: As someone who’s been following FTX, Sam Bankman-Fried, and the ties between them and all these other crypto companies that have imploded this year, what was your initial feeling upon seeing the news about Alameda and its balance sheet?

Mike Burgersburg: I’d actually already gotten that information a couple of days before the article was published, so I wasn’t really surprised. I was already working on my own piece. Once I saw that, I knew that they were in very serious financial trouble as long as that information was accurate, which, of course, it turns out it was.

How did you start getting into crypto investigation?

I always have had this weird fascination with financial fraud going back to when I was a kid: Enron, the 2008 crisis. Once you learn enough about how fraud works, you know what it looks like. When I started learning about all of these companies in crypto, like Celsius and Tether, I recognized it pretty quickly. Celsius, in particular, is something that had all the signs of being some type of scam, likely a Ponzi scheme in particular. So I started digging into the backgrounds of the people involved in the company and published a couple of articles based on that.

I’m pretty skeptical of the value of crypto in general. However, one thing about it is that every single transaction is immediately and publicly recorded and available for you to look at. What I realized was that this might be the first chance in history where you have the chance to investigate fraud in real time and actually see what they were doing as they did it.

That’s why I started teaching myself how to use these tools. I also realized that as I talked to investors in these companies, most of them didn’t actually really understand how to even investigate this stuff. That kind of blew my mind. If you’re putting all your life’s savings into it, why haven’t you done even the most basic attempt to understand what you’re looking at? I decided to try and make a story out of it, and that’s what I’ve been trying to do over the last few months.

That’s interesting how crypto holders weren’t even bothering to follow the money.

They had no clue. Most of them don’t understand. I asked incredibly basic questions. I mean, I’m not an expert by any source of the imagination. I’m just a guy screwing around. The crazy thing is that one guy screwing around in his spare time with no special knowledge or abilities, as far as I’m concerned, could go so much further than almost anybody, just because I was looking at the details and nobody else was.

Were you writing or doing any other financial analysis before you started Dirty Bubble?

I don’t have any financial or programming background or anything like that. I’m a physician, resident position.

And you find a lot of time outside of work to do this?

Not a lot of time. It was toward the end of medical school that I started looking into this. In that period, you have a lot of time with electives. I was still working 40 or 50 hours a week, but when I went home I didn’t have to do anything. And when I was doing my Ph.D., I spent all my free time reading articles and doing data analysis and stuff. So later I filled that time with something I actually found interesting.

I assume the name Dirty Bubble came about because you’re a SpongeBob SquarePants fan?

I actually don’t remember. I think it was October when I first came up with that. It just popped into my head. People were calling these last couple of years “the golden age of fraud,” and I was like, “No, it’s just another dirty bubble.” Then I thought, “OK, well, it’s kind of a catchy name. It’s a little different.” Once I came up with a little avatar for it, I think it definitely burned into a few people’s brains now.

Once you started publishing the newsletter, how long did it take for other crypto insiders, critics, or journalists to start really noticing it?

There were a few journalists who noticed fairly early. The ones who were really on the ball. They saw what I was doing, and they realized that nobody else was doing it. The first article that really got a decent amount of attention had nothing to do with Celsius or FTX or any of it. It was actually [about] Justin Bieber’s NFT project—which I might need to revisit shortly, because I think it’s pretty crazy how badly the people that invested in that got screwed.

That piece was when I first started really doing that, because it was so simple: There are only a few walls involved, transfers are very direct, and NFTs are easy to track through the blockchain. That’s when I really started getting serious about it.

No one loves anything more than a celebrity scam story, right?

Exactly.

I’ve been covering crypto on and off since college, but I feel like a lot of people started noticing it once there were a bunch of ad spends, celebrity endorsements, and Instagram ads. I’m curious, what was running through your mind when you saw the pop culture presence of it?

I think some of these people didn’t really know what they’re doing. Their PR people or their agency told them, “Hey, you’re going to be showing NFTs now.” They go, “OK, whatever, you tell me what to do, and I do it.” Bieber’s was different because he was directly involved with the projects.

Regardless, it’s just the irresponsibility of it. When you look at Tom Brady on FTX, it’s like, these guys are already incredibly wealthy, they have all these people that look up to them and trust them for whatever reason. They feel like they know these people, because you see them everywhere, you like their music, you like their team, or whatever. Then they screwed their fans over to the extent that few endorsement deals have ever done, as far as I can tell.

Did it take you a while to figure out how to track these projects, companies, and tokens? Or did you find it was even more intuitive than you’d thought?

It was a mix. It’s kind of about finding the right tools. It’s also about thinking through it the right way. There’s certain tricks that you can use to try to identify the very first transaction someone’s wallet ever did, you can also use that as a tool to figure out, “OK, who funded it? Another wallet.” Then you could make a map of those wallets. For example, for [Celsius founder and former CEO] Alex Mashinsky, I was able to work out the whole network of his wallets before I actually had the information that ended up confirming that they were, in fact, his. It’s a lot of using Excel and downloading a bunch of data, combing through it, and clicking on a bunch of random stuff.

I’m not an expert. I really have brute-forced it to an extent that a lot of other people in the space would probably think was just hilarious because it’s so inefficient, but I guess it’s worked out.

Once you started tracking these companies, did you start hearing from any of their employees?

The people going after me were mostly customers or ambassadors, but I don’t think I’ve had any direct employees of a company come after me publicly. I had some message me privately, and I did have a few individuals who had some knowledge about how a company functioned. That was very helpful, and a couple of my stories were based off the hints and tips that they gave me. According to those people, I was able to figure out what’s actually going on, which is really helpful.

Since I’ve been regularly covering crypto, a lot of people who don’t know as much about the scene ask me to explain it to them. I do my best, though it’s sometimes hard to get these concepts through. My go-to is usually: “If something about this sounds super dumb and obvious, it probably is.” How did you figure out how to explain this stuff for a lay audience?

Honestly, I’ve learned as I’ve gone. Because of my academic background, I’ve written a lot of other papers, and part of that job is learning how to explain really complicated information as safely and directly as possible. That was very helpful for me, and I’ve evolved as I’ve written. I’ve learned what worked and what didn’t work just by experimenting. If you’ve read my articles, you’ll see they’ve changed over time. I’m not trying to make money off it, so I can write about whatever I want to write about, whenever I want to.

What have you made of the tech press’s approach to crypto over the past few years?

I’m relatively new to this whole thing. I didn’t start really looking into this until later 2021. But I’ve been incredibly disappointed for the most part. There are individual reporters who are doing excellent jobs: people at Bloomberg, the Financial Times. But I think journalists feel like they have to pretend to be unbiased, even when they aren’t. The fact is, you can prove a lot of these things are fraud by just looking into them a little bit. You literally have a beautiful record of everything that can’t be denied—the blockchain—yet you’re not willing to use it, and I think that was a big failing.

Why do you think so many people are just so willing to give crypto figures the benefit of the doubt?

I don’t know. I think it’s human nature, honestly. I wouldn’t say I’m a suspicious person by nature, but I definitely check people’s work, particularly when it comes to money. Something my grandfather would always say is that nothing is free, and if somebody’s trying to tell you they’re giving you something for free, you should ask, “Why me? Why are you doing this big favor?” That was the Celsius thing. They sold it as: “We’re doing what the banks don’t do. We’re giving you back all the stuff the banks are stealing from you.” It’s like, “Well, why are you doing that? Why are you being so generous with me?” That’s the question you have to ask.

There was news around October that Sam Bankman-Fried was pausing his big political donations and withdrawing from investing in Elon Musk’s takeover of Twitter. Did you start thinking then that maybe he’s crumpling a bit?

I’ve been of two minds on him for a long time. Part of me believed the idea that he was the one making all the money. Somebody has to be making money here, theoretically, right? At the same time, if you listened to him talk, he never came off as being that bright. Like, either he’s admitting that he’s committing fraud, or saying shit that just doesn’t make sense.

He straight-up said that on Odd Lots!

He did. What really got me interested in him, besides his ties to Tether and Celsius and everything else, was when he was going around being the good guy, supposedly bailing everybody out. We started looking at those deals and saying that maybe what he’s doing is trying to save himself by absorbing all these firms. I still don’t know how in God’s name he’s down billions. That is mind-blowing.

If you were a guessing man, what would you say might happen next? Not just the FTX and buy-in situation, but the broader crypto economy. I mean, this is a huge deal. As you’ve written, SBF has these ties with Tether, which is the one thing still propping up much of this economy.

If that unwinds, everything’s over. The bigger question from me is, it’s a psychological thing. Celsius actually didn’t get destroyed because of Terra/Luna. It was the loss of confidence that killed them, because everybody started pulling money out.

I mean, Celsius was nothing compared with FTX. They had their name on Miami Heat Stadium, they had their name on goddamn baseball uniforms. I still can’t get over that. The fact that this company that even people that aren’t involved in crypto would recognize the name of, with some of the most prominent celebrities: Tom Brady, probably the most well-known sports figure in the world; Larry David, which I was really disappointed about. Although, I honestly think that’s kind of within his character to do that, because that’s what Costanza would do, right? He would end up being the sponsor of a Ponzi scheme.

The bigger effect here is not so much the immediate financial consequences. It’s the loss of confidence this is going to instill in people, especially once they realize that nobody’s going to be able to save it.

Right, and crypto valuation completely depends on that confidence.

Right. The other part of that is the regulators and the politicians, especially the ones who were shaking hands with Mr. Bankman-Fried and taking his money just a few months ago, they are going to have a lot of pressure to do something to show they aren’t on the side of Ponzi scammers. If anything is going to serve as impetus for regulation and to bring the hammer down on these assholes, it’s going to be that.

Are there other worrisome spots with other major crypto players that you have an eye on right now?

I would not have my money in any of them. Legally speaking, if you read, for example, Coinbase’s own disclosures, even they admit that if they go bankrupt, any assets on that platform are their assets. Which is different from any other company. Even if they aren’t holding them forever, if they go bankrupt, there’s a very good chance your assets are locked up for years in a court battle. Why would you want to take that risk? You should not hold any of your assets on any of these centralized exchanges, and you shouldn’t be holding any of these default protocols, either, because basically, those are just piggy banks for these guys to raid. Then the market will collapse. If you believe in Bitcoin, Ethereum, or whatever, and you want to hold those assets, I don’t agree with your opinion, but you could do it. But put them on your own books so that way, at the very least, you don’t lose title to them, as you almost certainly will if you have them in any centralized entity.

That’s a blanket statement. I can’t say there’s a specific company that I think is worse than any other. They are all equally a risk. If anybody has any sense at this point, they’ll be pulling their money out of these things.

Future Tense is a partnership of Slate, New America, and Arizona State University that examines emerging technologies, public policy, and society.