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Kaien
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finance | ml | science | the difference between signal and noise.
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In 2022, a crypto project called HyperVerse collapsed and investors lost close to $2 billion.
Its CEO had been reassuring them the whole time. He turned out to be a hired actor.
The man behind it was Sam Lee, an Australian crypto entrepreneur. He hosted calls with almost 1,000 people every Saturday. He introduced Bitcoin as his "girlfriend." There was even a video of Apple co-founder Steve Wozniak saying "I'm here to support HyperVerse."
In the video below, a British investor named Robert explains what he did in January 2022.
"I spoke to my wife and said, why don't we find a way of getting rid of our mortgage completely?"
He put half the equity in his house into HyperVerse. Two weeks later, withdrawals stopped.
When members complained, the "CEO" posted a video telling them the problems were being resolved. "It was reassuring at the time, cuz people didn't know he was a fake."
Robert and his wife no longer live in the house they had for 28 years. Now there's just a painting of it on the wall of a shared-ownership home.
"I'm effectively the lodger."
"You have to laugh, otherwise you'd cry."
US authorities charged Sam Lee with fraud. He lives in Dubai, which has no extradition treaty with the US. Bloomberg asked him what he would say to the people who lost money.
"Everyone who understands how to make money in this space, by really listening to what I have to say, have made money."
"I love Dubai. There are many exciting projects on the horizon. You just have to stay tuned."
Should people like Robert have known better, or is it impossible to spot a fake when even the CEO is an actor?
Its CEO had been reassuring them the whole time. He turned out to be a hired actor.
The man behind it was Sam Lee, an Australian crypto entrepreneur. He hosted calls with almost 1,000 people every Saturday. He introduced Bitcoin as his "girlfriend." There was even a video of Apple co-founder Steve Wozniak saying "I'm here to support HyperVerse."
In the video below, a British investor named Robert explains what he did in January 2022.
"I spoke to my wife and said, why don't we find a way of getting rid of our mortgage completely?"
He put half the equity in his house into HyperVerse. Two weeks later, withdrawals stopped.
When members complained, the "CEO" posted a video telling them the problems were being resolved. "It was reassuring at the time, cuz people didn't know he was a fake."
Robert and his wife no longer live in the house they had for 28 years. Now there's just a painting of it on the wall of a shared-ownership home.
"I'm effectively the lodger."
"You have to laugh, otherwise you'd cry."
US authorities charged Sam Lee with fraud. He lives in Dubai, which has no extradition treaty with the US. Bloomberg asked him what he would say to the people who lost money.
"Everyone who understands how to make money in this space, by really listening to what I have to say, have made money."
"I love Dubai. There are many exciting projects on the horizon. You just have to stay tuned."
Should people like Robert have known better, or is it impossible to spot a fake when even the CEO is an actor?
2:27
In 2020, nine traders from a small village outside London made $660 million in a single afternoon.
One of them was 22 years old. He made over $100 million.
The day was April 20. Oil had never in history traded below zero. That afternoon, it fell to minus $37 a barrel.
The traders weren't from Goldman Sachs or a giant hedge fund. They worked out of a tiny firm in Essex called Vega Capital, whose website just said "under construction." They were led by a former trading pit veteran whose nickname was "Cuddles."
They were friends. They drove Rolls-Royces and Bentleys, went on holiday to Marbella, and supported West Ham together.
In the video below, the Bloomberg reporters who tracked them down explain what happened.
"I think they made as much money in one day as Apple makes from its international sales in one day."
At 2:08 pm, oil went negative. They had bet on it falling, and every contract paid them on both sides of the trade.
"I can't think of another example where you enter a trade and you get paid on both sides."
Thousands of ordinary investors in a Chinese oil fund lost everything that same day.
And in the final half hour before the price was set, nine guys from Essex were the biggest sellers in the entire market, bigger than the world's largest banks, BP and Shell.
They've been sued in the US for market manipulation and investigated by UK regulators. They say they did nothing wrong.
Was it the greatest trade in history, or did nine friends from Essex push the price of oil below zero?
One of them was 22 years old. He made over $100 million.
The day was April 20. Oil had never in history traded below zero. That afternoon, it fell to minus $37 a barrel.
The traders weren't from Goldman Sachs or a giant hedge fund. They worked out of a tiny firm in Essex called Vega Capital, whose website just said "under construction." They were led by a former trading pit veteran whose nickname was "Cuddles."
They were friends. They drove Rolls-Royces and Bentleys, went on holiday to Marbella, and supported West Ham together.
In the video below, the Bloomberg reporters who tracked them down explain what happened.
"I think they made as much money in one day as Apple makes from its international sales in one day."
At 2:08 pm, oil went negative. They had bet on it falling, and every contract paid them on both sides of the trade.
"I can't think of another example where you enter a trade and you get paid on both sides."
Thousands of ordinary investors in a Chinese oil fund lost everything that same day.
And in the final half hour before the price was set, nine guys from Essex were the biggest sellers in the entire market, bigger than the world's largest banks, BP and Shell.
They've been sued in the US for market manipulation and investigated by UK regulators. They say they did nothing wrong.
Was it the greatest trade in history, or did nine friends from Essex push the price of oil below zero?
2:23
In 2009, an unemployed London trader started a hedge fund with £500,000. Within four years, he was worth about $700 million.
The money came from Denmark's taxpayers.
His name is Sanjay Shah. He started in a bank's back office. Every morning he walked past a row of sports cars outside the building. He asked his boss who they belonged to.
"The traders do, on the fifth floor."
He decided he wanted to be one of them.
What he found was a trade called Cum-Ex. Shares were passed around so fast that several parties could claim a refund on the same dividend tax, even though it was only paid once. Denmark says his firm walked away with $2 billion. That's nearly 1% of the country's GDP.
He moved to Dubai. A 32-foot yacht, then a 62-foot one. Property in Hong Kong, London, New York and Dubai.
In the video below, he explains how he sees it.
"The barn doors were open. People were driving trucks into the barn, taking out truckloads of cash for decades. It's their bad."
"I'm not the only one who took that opportunity."
He even said that once he was cleared, he would go straight back to doing the same trades.
He never got the chance. Dubai extradited him to Denmark, and in 2024 a Danish court sentenced him to 12 years in prison.
Was Sanjay Shah a thief, or just the guy who noticed the barn doors were open?
The money came from Denmark's taxpayers.
His name is Sanjay Shah. He started in a bank's back office. Every morning he walked past a row of sports cars outside the building. He asked his boss who they belonged to.
"The traders do, on the fifth floor."
He decided he wanted to be one of them.
What he found was a trade called Cum-Ex. Shares were passed around so fast that several parties could claim a refund on the same dividend tax, even though it was only paid once. Denmark says his firm walked away with $2 billion. That's nearly 1% of the country's GDP.
He moved to Dubai. A 32-foot yacht, then a 62-foot one. Property in Hong Kong, London, New York and Dubai.
In the video below, he explains how he sees it.
"The barn doors were open. People were driving trucks into the barn, taking out truckloads of cash for decades. It's their bad."
"I'm not the only one who took that opportunity."
He even said that once he was cleared, he would go straight back to doing the same trades.
He never got the chance. Dubai extradited him to Denmark, and in 2024 a Danish court sentenced him to 12 years in prison.
Was Sanjay Shah a thief, or just the guy who noticed the barn doors were open?
2:17
In 2012, the US government sent a $104 million check to a man it had just let out of prison.
He was the only person jailed for a scheme he exposed himself.
His name is Bradley Birkenfeld. He was a private banker at UBS in Geneva, making $2 million a year. His job was helping wealthy Americans hide money from the IRS.
"We had 19,000 accounts and $20 billion in assets."
In 2007, he walked into the US Justice Department and told them everything. UBS paid a $780 million fine and handed over thousands of client names.
In the video below, he is asked how many of those bankers went to jail.
"No one."
"How about you?"
"I was the only one to go to jail in the whole financial crisis."
He served two and a half years. Two weeks after he got out, the IRS paid him under its whistleblower law. After taxes, the check was still $75 million, the biggest whistleblower award in US history.
The first thing he bought was a brand new Porsche Cayenne Turbo.
"A lot of people would say you have too much money. But what they don't understand is, I put an illegal business out of business."
Did Birkenfeld deserve the $104 million, or did the government pay a criminal for turning in his own clients?
He was the only person jailed for a scheme he exposed himself.
His name is Bradley Birkenfeld. He was a private banker at UBS in Geneva, making $2 million a year. His job was helping wealthy Americans hide money from the IRS.
"We had 19,000 accounts and $20 billion in assets."
In 2007, he walked into the US Justice Department and told them everything. UBS paid a $780 million fine and handed over thousands of client names.
In the video below, he is asked how many of those bankers went to jail.
"No one."
"How about you?"
"I was the only one to go to jail in the whole financial crisis."
He served two and a half years. Two weeks after he got out, the IRS paid him under its whistleblower law. After taxes, the check was still $75 million, the biggest whistleblower award in US history.
The first thing he bought was a brand new Porsche Cayenne Turbo.
"A lot of people would say you have too much money. But what they don't understand is, I put an illegal business out of business."
Did Birkenfeld deserve the $104 million, or did the government pay a criminal for turning in his own clients?
2:12