The Kidnapping of Ape #8398

0:00Hello. This week's episode is an old fashioned internet mystery, except with a bit of an unusual twist. It's both a story about tracking down something extremely valuable that was stolen online, and it's also an attempt to understand why that thing, a digital image of a bored ape, would be so valuable in the first place. A story of a heist that is also asking, was the thing that was stolen itself a kind of scam? I really love this story. It ended up being a snapshot from atop the height of the NFT frenzy. It also happens to include one of the funniest interviews with an anonymous or pseudonymous source I've ever gotten to conduct.

0:38I hope you enjoy it. We'll play it after some brief ads.

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1:51Do we have audio? Because that would be awesome. It doesn't look that way. This is a video recorded back in May of 2014. We're at a technology conference in Manhattan where, in a few moments, something surprisingly consequential is about to be born. The idea that we wanted to share with you all, and I think it actually speaks for the idea in its entirety, so we'll play that. On stage, sitting behind matching MacBooks, we have a technologist and an artist. The artist's name is Kevin McCoy. He and his wife Jennifer make digitally native art, just art that's meant to live on the Internet itself. And tonight, he's taken this gif that she made.

2:32So here's a gif. This is a 17-year-old animated gif from a project from 1993 that Jennifer and I did. It's an animated gif of what looks to me like psychedelic chattering teeth. He's got a few of these gifs. And he explains that what's actually special about them is not the art itself. It's where they've been put on the internet. The blockchain.

3:00And so this is a document that exists right now on Namecoin, in the Namecoin blockchain. To help everyone understand what it means to put the record of who owns a piece of art onto the blockchain, they're going to, right here in this room, sell another GIF they've made. The technologist, his name is Anil Dash, and the artist Kevin asks him, Hey, are you interested in some animated GIF art? Am I ever? I got a good, I got a... The absurdity of all this, it's making the room a bit giggly. Yeah, name your price in any currency. They land on a price,$4, and moments later the deal is done. Boom. Sold.

3:41Sweet. So in just three or four hours... We have just transferred the digital title of this work to Mr. Anil Dash for four frickin' bucks. Five. Oh, you gave me an extra one. Ah, well, keep the tip.

4:01This thing they've invented, they don't call it this in the room, but it will soon be named an NFT, a non-fungible token. That clumsy phrase, non-fungible, it just refers to the idea that each piece of art has a unique value, unlike two Bitcoins, which will always be worth the same as one another. That moment we just watched, very recent history, 2014. But from there, the genie sprints out of the bottle. Three years later, Ethereum users are making giant NFT collections. You can buy a very valuable pixelated image of a face and then join a community with everyone else who owns slightly different versions of the same face.

4:41You all root for the price of the faces to go up together. There are CryptoPunks, there are CryptoKitties. These are essentially expensive baseball cards for crypto nerds to trade. Three years after that, late 2020, is when things become, from a financial perspective, completely unhinged. The high-end art world discovers the market. People are buying and selling NFTs at prices to make a lottery winner lose their lunch. One of those trippy NFTs that that artist Kevin made with his wife, one that he kept instead of selling for four bucks, It sold last winter for$1.5 million. At Sotheby's, of course.

5:24Today, that idea of an NFT has come to mean a lot. People buy and sell the ownership rights to all sorts of digital assets. There are NFTs of songs, NFTs of sports highlights. You can buy an NFT domain name. But at the same time that people are spending gobs of money collecting these things, there's still some very good unanswered questions about what they're really useful for, besides speculation. Here on Crypto Island, I've sort of been avoiding the topic of NFTs, but there's this big news story involving a celebrity who'd had some mishaps with a high-profile NFT purchase. I'm going to explain what happened later.

6:02For now, I just want to tell you that the investigation into the celebrity NFT theft got me on the phone with a person who was able to help me answer a question that's been bothering me all year. As NFTs have become more expensive and more ubiquitous, what was behind the strange, perhaps unholy alliance between celebrities and NFTs? That question answered after the break. This episode is brought to you in part by Odoo. Running a business is hard enough, so why make it harder with a dozen different apps that don't talk to each other? One for sales, another for inventory, a separate one for accounting.

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8:25Welcome back to the show. What do you want your pseudonym to be for the purposes of this? Can't you just say my friend? Yeah, I can just say my friend. You have to name me? I don't have to name you. Yeah. I think sometimes I get a little, like, perhaps too excited about the cloak and dagger of it all. But you go, like, we'll call him Dick Doyle, and it just sounds dumb. Like, it just, you know what I mean? I won't call you Dick Doyle. I'll just say my friend. So my friend, Dick Doyle, was talking to me from his living room on his daughter's iPad. He works pretty high up in Hollywood. He manages some legitimately famous people.

9:00He's not the kind of person I usually know. But we met last year. I was going through a period where I felt pretty lost. And he was a stranger who showed up to offer some advice and encouragement. And I really liked him. He's funny. He's reverent. He's very opinionated. But as a reporter, I harbored an ulterior thrill to our friendship. Because Dick Doyle would often talk very candidly about the backroom world of Hollywood. a place i find both intriguing and opaque okay what do you do for a living i'm a manager and what what's a manager a talent manager like what's a manager is like a i'm being recorded now you're being recorded now yeah um this is also just a question i've always i feel like no one that i know understands like people know that there are agents and managers but i don't think a lot of people understand the difference agents make deals managers kind of cultivate people's careers like agents have 125 clients managers have 15 to 20 25 got it managers are a little bit more inside partners with their clients that's kind of why i have like this perspective on the nft thing is because agents just see the deals and they send them in and they're like here's a big opportunity and i'm the one who has to go like yeah maybe it's not a great opportunity the people dick doyle manages they're actors comedians writers entertainers basically and his first exposure to nfts was hearing from those kinds of people who bought them as an investment what did you think when you were first seeing that at first i was confused i didn't totally understand it then it was kind of explained to me what an nft was in the abstract and it's it's you know my best friend in the world he was really big in the in the modern art scene and so it's really hard to say to a person okay that that individual squiggles like that thing that just sold for half a million dollars at Sotheby's, which I don't see the inherent value of, is actual art.

10:57But this NFT isn't. Like there was a little bit of like, the whole thing's a grift. It's gas prices, gas, you know what I mean? It's worth whatever someone's willing to pay for it. That's how Dick Doyle felt initially, that buying a squiggle on a screen made just as much sense as buying a squiggle on a canvas. However, he did start to notice that in this new art world, in the NFT market, the vibe was a little different. There was a fire sale quality to it. Unlike modern art, which went from the modern art era was like 1890 to... It took about 40 seconds for people to be like, oh, watch this. Everything's for sale.

11:35Every frame of a Quentin Tarantino movie is now going to be an NFT.

11:46So I fact-checked this. Every frame of a Quentin Tarantino movie is not going to be an NFT. But it's not far from the truth. Quentin Tarantino is trying to sell an entire collection of NFTs based off Pulp Fiction. This is him last November, very excitedly telling a crowd of people about the conversation he'd had that made him realize all this time he'd been sitting on NFT gold. I have the entire Pulp Fiction script written in my own hand from page one to the last page it's kind of just been sitting on a binder in my office on a filing cabinet and the only person who's ever seen it was the typist back in 1993 I think you go what you have that yes and it's never been seen no I mean the typist is the only person who has ever seen it well that sounds like a pretty good NFT.

12:47There were a few moments like this one last year. Moments where it felt like famous people suddenly opened their eyes and realized, okay, sure, you could sell a fan your only copy of the Pulp Fiction script. Or you could sell a lot of fans, NFTs, that include a scanned page from that very document. It'd be like owning the very genius that made the movie. And like, there's a doodle over here. There's a little note to myself about something else over there. Vincent's character was named Edgar for a long time. And so like Edgar is crossed out and Vincent is written on top of it. I was like, this is, I started getting caught up in it.

13:25I started almost getting emotional about it. And that's when, and I have to say that was when I really kind of realized what an NFT can be. It's very easy to poke fun at whatever's happening in this video. But, I will say, if someone told me that a copy of this script I'm reading to you right now was worth a million dollars to an internet stranger, well, I, for one, have certainly praised mattress companies for significantly less money. In any case, this Quentin Tarantino moment was a data point that suggested to my friend Dick Doyle that perhaps this Hollywood NFT alliance might not be an entirely virtuous one.

14:04the degree to which they were selling stuff and how fast they were trying to sell and how fast they were trying to move the inventory off the shelves with the nfts made me think maybe it wasn't quite like a basquiat you know what i mean yeah yeah the mental calculation you were doing was i mean who knows art is subjective but on the other hand there's like a gold rush here that i find a little bit weird and and it's very it's a very if you if you do this thing long enough in my job you see there's a pattern of like people show up they think they've cracked the case on how to make money in hollywood and they it's the same type of person i don't mean that like it's just a person who's like uh i make money doing foreign you know i raise foreign financing and i get an actor and it's all like kind of like a grid like like whatever the thing is there's always like a little bit of like it's not totally clean but i know i can make a bunch of money you just have to go with me on it and everyone i knew who was like a little bit of a shady reputation immediately was in the nft business like instantly and they're calling my clients directly telling them how much money they can make on nfts and they're calling my company and they're just like literally there's there's gold there's gold everywhere they're just they're selling every piece of the store before they've even like established the medium itself it's all for sale they stripped it down they're Like, it's like if you went in to buy some milk and like, you want the cash register too?

15:31Like, it's like, I don't trust Ed. That's not a store I'm staying in business with.

15:37Did you have clients that you had to have conversations with who wanted to do this and you had to talk about it with them? Well, yeah. In the sense of not none that were like, I really want to do it. But a lot of like, is there something happening here that's really cool that we're missing out on? Like, it was just everywhere all at once. Literally. That's the nature of an NFT is literally anything is an NFT, right? Yeah. It's a picture. It's an idea. It's like it's the feeling of being cold. Like anything can be an NFT. So like there were a lot of conversations like, OK, if this is where the media, this is where it's all heading.

16:13How do we how are we a part of it? There are actually a couple of motivations behind this celebrity NFT craze. But the thing that Dick Doyle is alluding to here is the motivation I found the most surprising. So a lot of people in Hollywood really did want to believe that NFTs were the future of media. They wanted NFTs to help them solve this problem that had been plaguing them for years, which had to do with intellectual property. So some backstory here. Hollywood has always had this constant hunger for news stories to tell. Sometimes they've solved it by buying the rights to existing stories.

16:50Articles, books, Disney amusement park rides. We know this. But with the rise of all these streaming companies, there's even more demand for news stories. And these frothy market forces have begun to have funny effects on other industries. Like, for instance, my industry, journalism. I very distinctly remember when I became aware that something had changed. I was working at a brand new podcast company. I've been there for about a year. There was something like 20 employees and maybe three times as many mice sharing a rented warehouse space. And Hollywood came calling. There was someone who wanted my boss to option the story of our company itself.

17:30Like they wanted to make a TV show about our very boring existence. And it happened. Zach Braff played my boss. Why should I invest in your podcast company? It's the Cadillac of podcast companies. Did people use Cadillac as a reference? Alex, listen. Who are you and what are you doing? Go. This TV show ended up being watched by easily tens of people. It was a flop. But Hollywood keeps making bets like that. And those bets change how people think about the work they do. Or even how they live their lives. Because the same way any image could, in theory, be an NFT, any work you do, or honestly, even if just a crazy story happens to you, That could be the next big TV show.

18:19Anna Delvey, the fake socialite scam artist who went to jail? Netflix paid her hundreds of thousands of dollars for her life rights. It's like there's a gold rush, and any IP you own is one more pan that could find a nugget. What I hadn't realized, though, is that this hunger to own IP has also spread to celebrities. And part of the way they're trying to pull this off is through NFTs. You had everyone from Brie Larson to Gwyneth Paltrow, Therese Witherspoon, talking up NFTs because they don't just want to star in movies. They want to own the material the movie is based on. So this motivation, owning IP they can make work from, that actually drove the rise of the most ubiquitous NFT collection last year.

19:02The Bored Ape Yacht Club, the much maligned pictures of cartoon monkeys. The company behind them, Yugo Labs, had this brilliant twist on how NFTs could work. If you bought a Bored Ape, you didn't just get digital ownership of the image, you also owned the underlying IP rights. Meaning, if you own a Bored Ape, you have the legal right to make a restaurant around your Bored Ape, a theme park, or you try to make a movie. Last year, Dick Doyle's email inbox was clogged with these Bored Ape movie pitches. I'm looking at all of these, like, hey, you know, hey guys, happy new year, not sure if you're familiar.

19:41or the nft space but i wanted to flag an interesting idea we work with a company that owns a mass amount of board apes the ip here has skyrocketed financially and in general popularity over the break and they've gotten over 400 ape owners which is to say that they can use their ip for an animated show so we're looking for producers and writers who can help i got so many of these i'm just searching through it's so funny and the thing is none of them owned rights to anything other than their own individual board eight well it's funny because it's like if I bought the rights to Star Wars, I could make a Star Wars movie about like Darth Vader and Luke Skywalker and like Leia.

20:17But with Bored Apes, even though you have the IP rights, it's like you just have like the IP rights for like one of the guys in the space bar or something like that. It's, I had a thing where a person called me up and they're like, we want to set a meeting with you and a very prominent client. And their plan was to take out a show that was going to be a space opera or a big big idea for a show and then once the show was on the air sell the individual nfts of the characters to the audience so they would get to own a piece of the show and they thought that they reinvented the wheel basically like you're going to be the first show ever where you get to watch your own character the character that you own maybe he lives maybe he dies maybe he saves the day and i was like you have a humongous you still have the barrier to entry which is like you still need netflix to agree to make your 250 million dollar show before you can rip off the general public on the nfts of your show like like i know that you think you like cracked the case here but like you're still complete they're like it's all like the old way's dead media's dead like we're reinventing everything all we need is disney to give us 250 million dollars and the right to sell off the characters individually without disney owning any of them And so, yeah, there's a lot of that.

21:36So that was one motivation for the celebrities who got into NFTs. They had these high-flying ideas about IP ownership. But there was another class of celebrity with a perhaps simpler motivation, which brings me to this video clip that I saw a lot of people losing their minds over in January. so for me and for a lot of people that i knew the moment that nft the idea that there was like an nft celebrity alliance was this paris hilton jimmy fallon interview in late january did you see that yes i did i was gonna send you the clip um do it actually maybe i can screen share maybe this Do you see this?

22:21No, but I've seen it, so I don't care. Welcome back to the show and congrats on getting married. This is a big deal. It happened. It happened. Okay, so it's Paris Hilton sitting next to Jimmy Fallon. She's in a green dress. It's really not an important detail, PJ. I know it really isn't. They're talking about how much they love their Bored Apes, and they're holding up pictures of their Bored Apes, and they're talking about how their Bored Apes are like, they look just like them, which they don't look just like them. We're part of the same community. We're both apes. I love it. This is my ape. Yours is so cool.

22:57I love the red heart sunglasses. I love the captain hat. It reminded me of me a little bit because I wear striped shirts. And it's just like you feel like you're watching an advertisement for something that doesn't make sense. Like it feels fundamentally strange. Yeah. That was when people I know started talking about this. Do you remember that moment? I do. And I remember feeling like it looked a little bit icky. And a lot of people have written about the common factor between all the people who went public with their NFTs. And there's a lot of writing on that. I'm not going to comment on it.

23:30So this mysterious common thread that Dick Doyle is alluding to that he doesn't even want to talk about anonymously. There is this internet theory that the thing that tied some of these NFT shilling celebrities together was that they shared the same talent agency. A reporter named Max Reed pointed this out, that it seemed a little weird that this one talent agency also happened to be an investor in a big NFT marketplace in OpenSea. From my reporting, it seems like it's actually more than just one agency. It seems like, broadly speaking, a lot of agents are responsible for the many celebrities who are directly pitching NFTs to their fans.

24:07The motivation there was money. The problem was a lot of fans were able to discern this, and it upset them. And why do you think those celebrities didn't understand that that pushback was going to be a thing? I don't believe that they viewed it as any different than other endorsement opportunities, like endorsing a clothing line or endorsing, like I think they really did, like these people get paid to endorse things. Right. And that's their job. Take Paris Hilton, for example. She has endorsed her own fragrance line, including Tease Fragrance, Dazzle Fragrance, Siren Fragrance, there's 29 of them, including my favorite, Ares Fragrance.

24:49But also Guest Jeans, Azur Urban Resort Residents, Emirates, the airline, not the country, a Brazilian beer called Devasa Bemlora. Don't look it up. It translates to something rude. Hardee's, Carl's Jr., a Grand Prix motorcycle team, her own canine apparel line, and for some reason, also Roblox. I could go on. And I will. Dreamcatcher's hair extension line, a mobile game called Diamond Quest, a canned sparkling wine called Rich Prosecco, Uber Eats, SodaStream, Fila, Viome, the at-home gut biome test, Bee Magazine, the Israeli lottery, a German website called GoYellow, Dubai, the city this time, a Brazilian fashion brand called Triton, and, according to Paris, the company who sold her ex-fiance a$2 million engagement ring.

25:40Paris Hilton endorses more products than most people do. She's an influencer. It's a significant part of her income. But a lot of celebrities depend on endorsements. And at least some of them just thought, how are NFTs really so different from anything else? and this was at least different and cool they're not endorsing like like baby food it's something that's different and interesting and maybe it does it is a new type of art that it isn't by the way but maybe it is like this new type of art that is a at a certain point you're having a conversation about late-stage capitalism is it fair for unbelievably rich people to get stuff for free and do should they feel guilty like i don't i'm not i don't want to take part in that conversation at all because I don't.