Crypto.com Spent Its Way to the Top. Then the Market Crashed. Now What? (2024)

Like most people, I first heard of Crypto.com when Matt Damon popped up on my TV screen and suggested I was a coward. I’ve followed cryptocurrencies for over a decade, but I’ve never invested in them—beyond money laundering, I’d never been able to understand what they were good for. Seeing Damon, though, I understood that the public perception of the technology had reached a new phase. And, yes, I felt in danger of being left behind.

Damon’s commercial is part of a larger, sports-focused marketing push by Crypto.com: The cryptocurrency exchange’s lion-head logo appears on the ice of the NHL, in the octagon of the UFC, and on the jerseys of the Philadelphia 76ers. Last November, the company announced it had purchased the naming rights to the downtown arena of the Los Angeles Lakers, at the cost of $700 million; during this year’s Super Bowl, Crypto.com aired an advertisem*nt featuring LeBron James. In March, it announced it will be sponsoring the World Cup.

While crypto was rising, the push looked brilliant, if possibly a bit obnoxious. But in the second week of May this year, the crash hit, and Damon’s name started trending on Twitter. Commentators observed that anyone who had purchased Bitcoin on the day Damon’s Crypto.com commercial first aired had lost half of their investment. “There’s a sucker Bourne every minute,” one offered.

In the wake of the controversy, it’s worth examining what, exactly, Crypto.com is—and what it wants to be. Crypto.com, as it currently exists, earns most of its money executing trades for clients via its smartphone app. (The company courts the small investor, and several people I talked to compared it to the investing app Robinhood.) Charging fees to trade cryptocurrencies is a lucrative business. Rival exchanges like FTX and Coinbase fight for the same customers, and this has led to a marketing arms race. FTX owns the stadium-naming rights for the Miami Heat, and Coinbase—which went public last year, reporting higher profit margins than Google—is the NBA’s exclusive cryptocurrency-platform partner. If the 76ers travel to Miami for a nationally televised game, you will see all three brands advertising on the same broadcast.

With each successive sighting, I assumed that Crypto.com was just throwing money around. And it was—but, to my surprise, when it comes to sponsorship deals, Crypto.com is often not the highest bidder. “The ability to write a check is a good starting point to many a conversation,” Crypto.com’s CEO Kris Marszalek said, “but for those really important things, the things that have real impact, it’s never enough.” Marszalek, 42, is a Polish-born serial entrepreneur who lives in Hong Kong. He speaks in a monotone, and he favors a neutral corporate wardrobe, alternating between suit jackets and branded zip-up hoodies. His distinguishing feature is his large forehead, framed above by a receding hairline and below by a pair of small rimless glasses. Given the breadth of Marszalek’s advertising campaign, and the sudden emergence of Crypto.com as a player among the exchanges, I was expecting a snake charmer. What I got instead was the guy they send to fix your printer.

But Marszalek’s lack of sizzle masks a keen understanding of human motivation. Using the advertising campaign he commissioned, Crypto.com has captured market share from competitors and now has more than 50 million users. Eighteen months ago, no one had heard of Crypto.com, which began its life under a different name, with a different business strategy. Today, even in a crashing economy, it’s possible the dark horse can win.

Over the course of reporting this story, I spoke with Marszalek several times in March and April. Last week, following the crash, I spoke with him again, via Zoom, seeking his outlook. He’s asking his customers to look beyond the dip. “I would remind everyone that after this week's sell-down, people who bought the absolute top in 2017 at the peak of the cycle, they're up more than 50%, okay? So this is the cyclical nature of the markets.”

Whatever you think of Crypto.com, you’ve got to give Marszalek credit for one thing: the guy has ice in his veins. His reaction to the crash was so devoid of emotion that I wanted to give him a Voight-Kampff test. He attributed this resiliency to his experiences in the previous 2018 crash, when Bitcoin lost 78% of its value. “If I compare the type of narratives and coverage that we're getting right now as an industry versus 2018, this is actually a big improvement,” he said. I observed that many of his customers were now frustrated and demoralized. “A big chunk of the users who came into the market are going to disengage for a while, and they're going to be less active,” he said. “But I've also seen people reactivate when the cycle picks up again, which inevitably it will.”

Whoever becomes the world’s g0-to crypto exchange will enjoy unprecedented control over our emerging currencies. Consequently, the exchanges are sticking their necks out to lure customers to their platforms. Many are offering high-yield accounts, with earnings paid out in crypto. For well-capitalized accounts, Crypto.com rewards customers with interest rates as high as 14.5 percent per year, and up to 10 percent per year in “stablecoin” currencies pegged to the U.S. dollar. This crushes a savings account, which pays basically nothing, but it also prompts questions about what kinds of risks those platforms might be assuming. I thought of a quote from the financial writer Raymond DeVoe Jr.: “More money has been lost reaching for yield than at the point of a gun.”

That overreach was one trigger for the current crisis. Late last year, a coin called Luna became one of the world’s most valuable cryptocurrencies, driven by a relationship with another coin its firm created called Terra, which investors could lend for interest payouts of nearly 20%. But when the Terra-Luna relationship unraveled in May, Luna cratered, and its price decreased by 99.99%. Following the wipeout, moderators pinned the number for the National Suicide Prevention Lifeline to the top of the TerraLuna subreddit.

When cryptocurrencies go down in value, as they mostly have lately, people lose interest in trading them. That compresses profits for the exchanges, and marketing budgets along with them. Even in good times, Marszalek was preparing for a bear market. “We went through the crypto winter of 2018 and 2019,” he said in April. “We kept our heads down, and we continued building a strong product. That’s one of the reasons why we grew so quickly in 2021.” Marszalek wants Crypto.com to be more than an exchange—he wants it to be an “ecosystem.” Crypto.com got its start marketing prepaid crypto-linked debit cards, which it still distributes, and it also runs its own cryptocurrency called Cronos, which it invites users to “stake” (i.e., lock money into) in exchange for various rewards. Marszalek likes to keep things flexible and, last March, introduced a marketplace for NFTs. “Right now, 90 percent of the revenue in this industry is coming from trading, right?” he said. “If three years down the road that’s still the case, then this is a complete industry failure.”

Here is where I should confess that I secretly want Marszalek to succeed. I like technology. Especially technology that comes from big, evil corporations. I lined up at the Apple Store to buy the original iPhone the day it came out. I’ve been an Amazon Prime member for 17 years. I like Instagram. I like Uber. At the end of my life, I would like Elon Musk to upload my brain to the cloud. In short, when an obnoxious entrepreneur makes a trillion dollars marketing a ridiculous technology, I think that that is good. I think this because I am lazy, and I think this because I believe, as an American, that it is my birthright to have large corporations catering to my every whim.

Historically, my problem with cryptocurrency was that it didn’t do this. Crypto was hard to understand, and even harder to use. When I started writing this article, I remembered that I had a little ether left over from an account at Decentraland, a janky attempt at a “distributed metaverse” that makes Second Life look like the Matrix. Accessing my wallet meant digging through a box in my closet for the notebook where I’d written down my 12-word passphrase—the only way to recover my account. After I found it, and successfully typed it in after three failed attempts, I transferred $40 worth of ether to Crypto.com. The transaction took an hour to complete, and cost me eight dollars.

I didn’t like this. I resented having to remember a passphrase, and I resented paying the Ethereum network a 20 percent transaction fee. But once the money made it to Marszalek’s app, the friction disappeared. Trading crypto on my phone was dumb and fun in a way I’d been conditioned to understand. I knew the fees were corroding my capital, and I figured any product offering double-digit interest rates might be taking on some kind of explosive risk. But I also knew, the instant I saw Matt Damon’s face on my TV, that whatever the market did, from now on it was going to be more work to be a crypto skeptic than a crypto enthusiast. So I surrendered. Kris Marszalek had made crypto stupid, and in exchange I was going to make him rich.

Once you transfer money into the Crypto.com app, you can begin trading instantly. In my first four minutes, taking advantage of discounted transaction fees for new users, I bought a small portfolio of blue chips: Bitcoin, Ether, Solana, Cardano, and Near. Only later did I bother to do the math. Matt Damon wasn’t selling me technology—he was selling the possibility that my portfolio might go up in value a thousand times. At the time of my purchase, the total market value of Bitcoin was nearly $800 billion, so for Bitcoin to go up a thousand times again, it would have to be worth $800 trillion. I dumped the blue chips and started buying altcoins, specifically selecting for ones I’d never heard of, picking them at random based on name alone: Venus, Chromia, Orchid, and SuperFarm; Ontology, Golem, Gnosis, and ThorChain; ApeCoin, SushiSwap, Chia, and Moonbeam.

But the coin I ended up owning the most of was Cronos—Crypto.com’s own. Marszalek’s app subtly but insistently guided me toward offers to stake Cronos. To access Crypto.com’s higher Visa card reward tiers, I had to buy at least $400 worth of Cronos, then hold it for a minimum of six months. This was a risky proposition: Cronos had traded between $0.09 and $0.90 in the 12 months before my purchase, and was down more than 50 percent from the peak it hit following the debut of Damon’s commercial. But in return I got a branded prepaid debit card.

For a $400 stake, Crypto.com will send you a “Ruby Steel”–tier card, pay for your Spotify subscription each month, and reward you with cash back on all purchases. (The cash back is denominated in Cronos, of course.) For a $4,000 stake, Crypto.com will send you a “Jade Green” card, cover your Netflix subscription, pay interest on your stake, and boost your cash back. For a $40,000 stake, Crypto.com will send you an “Icy White” card, and for a $400,000 stake the company will send you an “Obsidian” card, each with increasing benefits. Stake enough money and at some point you might even meet Kris.

In addition to the cards, the Crypto.com app has a gamification element, in which users complete “missions” to earn “diamonds,” which can be exchanged for “mystery boxes,” which contain Cronos. Crypto.com also offers to exchange small lots of other cryptocurrencies, like Bitcoin, into Cronos for free. It felt like the longer I used the app, the more likely I was to end up owning Cronos, perhaps even inadvertently.

Cronos is one of the 20 most valuable cryptocurrencies by market capitalization, with a present total value of around $5 billion. Granted, there is more money stored in Dogecoin than Cronos, but given that over 18,000 cryptocurrencies have been launched since 2009, ranking in the top 20 is a commendable achievement. And even if Cronos is not the most widely used blockchain, Crypto.com does appear to have the most widely used crypto-linked prepaid card. Visa recently announced it had processed over $2.5 billion in crypto-linked card transactions in the first quarter of 2022. “I would say about $1.7 billion of that was our card,” Crypto.com spokesman Matt David told me.

One of the nice things about cryptocurrencies is that most of them use public ledgers, permitting snoopy users like me to monitor the fattest wallets. Using the analytics platform Etherscan in April, I saw a couple of single-signature wallets, each with over a billion U.S. dollars of Cronos stashed inside. I wondered if, perhaps, one wasn’t Marszalek’s wallet, but when I asked him, he wouldn’t tell me. When I asked him again, he still wouldn’t tell me. When I asked him, directly, how much Cronos he personally owned, he told me, “Just a bit.”

Cronos has a controversial history, and has gone through two rebrandings. It started life as the Monaco token and attracted a small base of early users. After Marszalek acquired the Crypto.com domain name, the company introduced a new token, called the Crypto.org coin, which traded under the ticker symbol CRO. For a time, Crypto.com sponsored both currencies, but, after stating he would keep the two tokens separate, Marszalek ultimately decommissioned Monaco, effectively forcing outraged Monaco holders to swap their holdings for CRO. More recently, the Crypto.org coin was renamed Cronos, after Marszalek removed it from the Ethereum network and ported it to its own blockchain.

Normally, to earn interest one has to make a loan, but in our conversation Marszalek repeatedly told me that his company was “not doing aggressive lending.” David reiterated that the company had earmarked money to pay these high interest rates to users out of its customer-retention budget. This struck me as unsustainable, given that, as of this spring when we spoke, a single Obsidian cardholder would cost Crypto.com $48,000 a year to retain, and that even if the company wasn’t lending, it would have to stay competitive with other exchanges, which were. “We’ve been reducing those rates lately,” Marszalek said. “This is a business with very robust revenues.” (In May, the company announced it was slashing benefits to cardholders, causing an outcry from customers. It later partially restored some benefits.)

Still, the combined deposits of Joe and Jane Crypto, each uploading a few hundred bucks on their phones, together form a growing blob of capital, and that attracts financial entrepreneurs in the same manner that chum attracts sharks. In particular, those deposits can be used as pooled liquidity to fund speculative, leveraged trading in the murky realm of crypto termed “decentralized finance.” DeFi is a burgeoning marketplace for exotic new financial instruments, executed via computer code, that are largely unregulated and very difficult to understand. That hasn’t prevented some exchanges from offering to boost their customers’ interest payouts if the customers permit their deposits to be lent to a DeFi protocol. If this sounds familiar it’s because you have, in fact, seen this movie before: In the lead-up to the mortgage crisis of the late 2000s, average people’s bank accounts were similarly used to fund the leveraged trading of complex new financial instruments, and one exchange, BlockFi, recently reached a $100 million settlement with the SEC, after the agency charged it with offering an unregistered lending product. (BlockFi did not admit wrongdoing.) A representative from Crypto.com told me that the company had examined this line of business but rejected it as being too risky.

There is also the industry’s ongoing problem with hackers. In January, Crypto.com admitted that hackers had bypassed its two-factor authentication codes to gain access to the accounts of 483 customers, and proceeded to steal over $30 million. “In the majority of cases we prevented the unauthorized withdrawal, and in all other cases customers were fully reimbursed,” a company press release said. Sanders observed that, more recently, Crypto.com has added sending authentication codes via SMS text messaging, a practice he called “insane,” due to potential insecurities.

Finally, there is the industry’s issues with money laundering, particularly in light of the sanctions levied against Russia following the invasion of Ukraine. Marszalek dismissed this concern. “This is, in fact, the worst way to try to avoid sanctions, because everything is in a public ledger, and fully traceable, and monitored in real time,” he said. Marszalek added that his early partnership with Visa had put him ahead of the industry on compliance with anti-money-laundering (AML) statutes, and on this point, Sanders agreed: “From an AML perspective, I think they’re doing a good job. That’s a rare compliment from me.”

Marszalek is not blind to the flaws of cryptocurrencies. “​​I don’t think there’s any chain out there today that is technically capable of doing what is required for mass adoption to happen,” he said. First-generation blockchains, like the one that powers Bitcoin, are slow and remarkably inefficient. The Bitcoin network, as a whole, can process from three to seven transactions per second. The Visa network can process 76,000 transactions per second. Programmers can use second-generation blockchains like Ethereum to build “decentralized” applications that operate across multiple computer systems, but the platform’s slow transaction speed (about 15 per second) and resulting fees can prevent those apps from scaling. “Where we are today with the tech, comparing it to the old internet days, we are still not even broadband, we are at the modem days,” Marszalek told me. Investors have been waiting for a “killer app” for cryptocurrency, but Marszalek warned that this would resemble an extinction-level event for more-established tokens if it ever arrived.“Today, a killer app would probably take down each and every chain that is out there in production,” he said. Marszalek also told me he was using the Cronos blockchain to build something amazing but wouldn’t tell me what it was. I asked him if he was excited about it. “Like a five-year-old,” he said, without a trace of feeling in his voice.

Marszalek was born in Poland in 1979. He was raised in a small rural village with a population of about 100 people. His childhood was happy, and he spent a lot of time playing in the forest, only dimly aware that he lived under a communist regime. “I’d go to the store, and there would be nothing,” he said. “It would be unimaginable today. Just empty shelves.”

By the time Marszalek was a teenager, Poland had emerged from the shadow of the Soviet Union. At 15, Marszalek embarked on his career as an entrepreneur, selling wholesale computer hardware and software. He attended university but dropped out before completion. In 2003, one of his business associates offered him the chance to move to Hong Kong. In Hong Kong, “there were successes, and then some failures,” Marszalek said. The successes included Beecrazy, a discount-deal aggregator similar to Groupon. Beecrazy marketed coupons for partnering businesses like restaurants and travel agencies. It was acquired for about $20 million in 2013 by iBuy Group, and the rolled-up companies would later be rebranded as the Australia-based Ensogo.

In 2014, Marszalek became Ensogo’s CEO. Ensogo, like Groupon, soon ran into trouble. Marszalek described the situation there as a “turnaround”—except it did not turn around. In 2016, nearly two years after Marszalek took over, Ensogo’s board announced it would cease its operations in Southeast Asia. Marszalek says he opposed the decision and resigned as CEO in response. Some merchants who had participated in the coupon program said they were stiffed; the Hong Kong police reportedly received more than 300 complaints from merchant partners. One merchant, in an interview with the Hong Kong Standard, said that she had lost HK$20,000, and noted that Beecrazy had launched a marketing push just weeks before the closure: “It seems to us that they wanted to make huge business from us one last time before they closed down.” (Crypto.com says there was no finding of wrongdoing during Marszalek’s tenure, and that he has not been involved with Ensogo in any way since his resignation.)

While Ensogo was shuttering its Southeast Asia operations,​​ Marszalek was founding the company that became Crypto.com. Its original name was Monaco, and the original business plan was to market prepaid debit cards. These cards were linked to Monaco’s own cryptocurrency, known as the “Monaco token,” with payment processing handled by Visa. But in 2018, the value of Bitcoin dropped by 78 percent, taking the Monaco token’s value down with it. It was then that Marszalek executed an extraordinary series of marketing coups that would eventually turn his prepaid-debit-card start-up into a household name.

Marszalek first approached Matt Blaze, a law and computer science professor who had owned the crypto.com web domain for more than two decades. Blaze was an outspoken critic of cryptocurrencies: “Cryptocurrency somehow combines everything we love about religious fanatics with everything we love about Ponzi schemes,” he wrote in a tweet from 2017, and had stated that his domain was “not for sale.” Eventually, it was. The terms of the deal remain private, but in 2018 Blaze sold the domain, and Monaco was rebranded as Crypto.com. (Blaze did not respond to requests for comment, and Marszalek declined to discuss the details of the deal—but he did tell me he believed Blaze received hundreds of offers.)

Marszalek, along with Steven Kalifowitz, Crypto.com’s chief marketing officer, began looking for a way to leverage the brand. In March of last year, the company announced it was sponsoring Aston Martin’s F1 team. Later that month, Crypto.com announced its logo would appear near the center ice of the Montreal Canadiens. In June, it announced a second F1 deal, worth $100 million, to become Formula 1’s global partner for five years. In July, it announced a $175 million 10-year deal to sponsor the gear of UFC fighters. In September, the company became the “official cryptocurrency platform partner” of Paris Saint-Germain, then scored the jersey deal with the 76ers later in the month. (Marszalek and Kalifowitz maintained straight faces when they told me that young men were not their target demographic.)

Then came the Damon commercial. Marszalek and Kalifowitz modeled the advertisem*nt after Apple’s legendary Think Different campaign, looking for a script that didn’t refer to crypto trading directly but reached directly into the achievement-hungry part of the human brain. They hired Pereira O’Dell, an upstart advertising agency, which came back with the firm’s tagline: “Fortune favors the brave.” After kicking ideas around, the two decided the spot would end with the colonization of Mars. “Going to Mars is a very strong crypto concept, right?” Kalifowitz told me. “We’re gonna have programmable money, and that’s what we’re gonna use in outer space. It just makes so much sense if you’re a futurist.” When I talked to Kalifowitz, via Zoom, he was using a space station as a backdrop, but he told me he found early versions of the spot, which featured an anonymous narrator, lackluster. He soon realized what was missing—celebrity. “We knocked our heads together on this one,” Kalifowitz said, before it finally came to them. “Matt Damon! Matt Damon ticks so many boxes, right? He exhibits bravery as a person, right? He’s globally known, right? We can put him around the world and everybody will know his voice.… Oh, and he won the Oscar for The Martian.” (Damon was nominated for Best Actor but did not win.)

At this point, the story becomes astonishing. Damon had done a small amount of commercial work but had never appeared as the face of a brand. Kalifowitz and Marszalek were able to talk him into it. Part of the attraction was the creative team. The Crypto.com spot was directed by Wally Pfister, Christopher Nolan’s former cinematographer, and Damon is playing Leslie Groves, the director of the Manhattan Project, in Nolan’s forthcoming movie Oppenheimer. Damon also donated his appearance fee to Water.org, a clean water charity he cofounded, and Crypto.com made an accompanying donation. (“I appreciate the partnership with Crypto.com and am grateful for their support of Water.org,” Damon said in an email before the crash. When I wrote him again in May, he did not respond.) When I asked Marszalek how a former coupon merchant running a rebooted prepaid debit card company out of quarantine in Hong Kong had managed to secure Damon, one of the most respectable and popular faces on the planet, to be the public face of crypto, he said, “I think it was the material. If you read the copy of this piece of work, I’m very proud of it.”

Much of Goldstein’s professional life revolves around naming deals. (I met him at the Lexus Club, at Crypto.com Arena, adjacent to Xbox Plaza.) The deal he helped negotiate with Crypto.com paid AEG $700 million over 20 years, but Goldstein told me the company was far from the highest bidder. “We had other companies offer us more money,” he said. “Interestingly enough, I’ve had companies offer us more money since we announced the deal, including a buyout.”

Goldstein turned that buyout down. “You want a partner who’s going to be really thoughtful over the course of the next two decades, without just looking for the big splash in the first year,” he said. I pointed out that Crypto.com was not yet six years old, and that for two of those years the company had had a different name. “​​They were really smart and astute. It was the most natural and organic conversation that we had,” Goldstein said. “I can tell you right now, though, we wouldn’t have done the deal as Monaco. We wouldn’t be in the Monaco Arena right now.” (Following the crash, Goldstein remained committed. “This is a 20 year agreement, we take the long view of the category,” he said.)

How was Marszalek doing it? Not through stage presence, certainly. During our calls, he spoke in a quiet voice, and sometimes when I asked him a question, he would look at the floor for a long time before answering. At one point in our conversation, he looked at the floor for so long I thought his Zoom had crashed. (“I apologize for not warning you about the long pauses,” Matt David told me later. “I’m normally really good about warning people about that.”) But when Marszalek finally responded, the answer was always diplomatic, even bulletproof, as if he’d simply been polishing it in the rock tumbler of his mind.

“There’s been a lot of grit, tenacity, and creativity,” Marszalek said of his epic string of marketing deals, “but the ability to listen has also been very important.” Marszalek told me he likes to put himself in the other person’s shoes and understand their likely points of mental resistance, then work, point by point, to address them. “Listen intently: What is the concern on the other side of the table?”

“Empathy,” I said. “You’re talking about empathy.”

“Empathy is very important,” Marszalek said.

Wanting to see things from the cetacean perspective, I wrote to Mark Cuban, owner of the Dallas Mavericks and noted crypto whale. Cuban made his fortune selling the overvalued Broadcast.com to Yahoo in 1999, then famously traded options on his Yahoo stock as a hedge against his windfall. It was the trade of a lifetime, especially after the bubble burst, but he doesn’t see a parallel with crypto. “Most of the apps like Crypto.com are centralized exchanges that are actually very profitable,” Cuban said in an email. He contended that sports-stadium operators will accept below-market rates for sponsorship “because they see these companies can grow significantly, which means there are future opportunities.” The possibility of a crash was always present, as Cuban knew better than anyone, but for now, he remains bullish. Last October, the Mavericks signed a sponsorship deal with the crypto trading platform Voyager, and in January, Cuban told Jon Stewart that 80 percent of his new investments outside of Shark Tank are in the crypto space.

When I followed up with Cuban after the Luna debacle, his optimism was undiminished. “The crypto market highly correlates to the NASDAQ,” he said. “Three of the most heavily invested stocks—Apple, Amazon, and Facebook—have lost more in market cap than the entire value of the crypto market. No one is questioning whether Apple would be a good partner after it lost $400 billion or so in market cap. This is the way markets work.”

Maybe… But Apple has actual products. The crypto space, after over ten years of development, has little to offer beside database entries, ugly avatars, risky trades, and a portfolio of vaporware. Plus—and here I must again editorialize—the DeFi sector looks to me like a ticking bomb. Last Thursday, Tether, another widely-used stablecoin that attracts users looking for yield, briefly broke its peg to the U.S. Dollar. It recovered quickly, but many observers agree that a run on stablecoins could lead to a chain of cascading failure. “If things start to unravel, it could be potentially catastrophic for the industry,” one analyst told CNBC. This is the way markets don’t work.

I must admit that, before the crash, I enjoyed seeing my altcoin portfolio appreciate. I also accumulated a fair amount of interest, scored some Cronos kickbacks, and was comped a month of Spotify. I still didn’t really understand why cryptocurrency was so expensive, or complicated, but it felt good to be a joiner. In that way, Matt Damon was right.

Looking to commune with the tribe, I visited the long-running CryptoMondays meetup in Venice Beach about a month before the crash. We met under patio lights in the parking lot of an upscale Mexican restaurant, which had been converted, during the pandemic, into an outdoor bar. I’d been to a similar event, years earlier—a total sword fight, where feverish dweebs lectured one another about distributed ledgers. Since then, crypto had enjoyed a social upgrade: In Venice, the attendees were diverse, funny, smart, beautiful, and cool. I felt like I was in a vodka commercial.

No one I spoke to could remember who first organized the event—one attendee told me it was spontaneous, or “decentralized.” Some of the participants had been coasting for years on the proceeds of their swollen Bitcoin wallets; others, like me, were just getting started. I talked with a recent college grad and former javelin thrower. Jacked and bro-adjacent, he belonged to the demographic that Crypto.com refuses to admit it targets, but when I asked him about the company, he scoffed. “No one I know uses it.”

Similarly dismissive was Jackie Peters, a stylish entrepreneur who is building a blockchain--enabled dating app called “Trust!” (The app will use “Web3 technology” to restore authenticity to online dating.) Peters was still in the process of selecting which blockchain she would use, but Cronos was not a contender. “There’s nothing on there, technically, that would attract me,” she said. “I’m thinking of using a blockchain called Avalanche.”

Of the dozen or so attendees I spoke with, only Apu Gomes, a Brazilian photographer, had any direct experience investing with Crypto.com. Gomes, who was looking to market NFTs of his photographs, was also a small-time speculator. In the weeks after Damon’s commercial first aired, Cronos had quintupled in value. The company’s next commercial, which featured LeBron James, ran during the Super Bowl. “It went down,” Gomes said. “I sold it to buy Solana.”

Many of the attendees seemed to be nursing hangovers. That was thanks, in part, to Audrey Pichy, an organizer of NFT/LA, which had concluded earlier that week, and which billed itself as “an epic IRL conference fused with immersive metaverse integrations and L.A.’s robust nightlife scene.” Pichy, who was born on the Caribbean island of Guadeloupe, wore a leather jacket, and bounced from side to side in excitement as she spoke. “Up until a month ago, we weren’t even sure how many people were going to show. But 4,000 people came!”

NFT/LA had been held in the convention center adjacent to Crypto.com Arena. Hearing this, the javelin thrower reconsidered his dismissive stance. “You know, what he’s doing is smart,” he said of Marszalek. “You’ve got blockchain companies that have been around since 2013, and they don’t even have a marketing officer. This space is forbidding to outsiders. Other companies are building technology, but they’re investing in glamour.” I looked around the parking lot, with its warm glow and dazzling people. “That’s smart. It’s undervalued. They’re building an on-ramp,” he said.

I went inside, ordered a drink, handed the bartender my Crypto.com card, and awaited his reaction. Nothing. “That’s a crypto card,” I said.

He nodded.

“I’m paying with cryptocurrency,” I said. “With Bitcoin. Well, actually not Bitcoin, but Cronos, which is like Bitcoin.”

“We don’t take Bitcoin,” he said.

“Well, let’s just run it, and see if it works,” I said.

I’m unsure what I expected—fanfare, banners, a handshake from Satoshi Nakamoto—but the transaction was processed, and the bartender left to serve another customer. Crypto was here, and not only was it stupid, it was boring. Was crypto gonna make it? I couldn’t tell. But for a second, at least, it looked like Marszalek had won.

Stephen Witt is an investigative journalist and writer based in Los Angeles.

A version of this story originally appeared in the June/July 2022 issue.