Inside the Crypto World’s Biggest Scandal (2024)

By then, however, most of her resentment was reserved for the Crypto Valley. A prominent Zurich businessman called as we headed south, with a patronizing offer to broker a deal that would put the foundation in wholly safe Swiss hands. Kathleen’s measured tone went out the window. “All these Swiss people calling me and telling me to shut the f*ck up and do things the discreet way. If I got raped at a party, would you tell me it was my fault for wearing a skirt? Swiss business culture is a load of sh*t.”

Gevers, the Breitmans’ erstwhile key man, seemed to be doing fine. Kathleen described how she and Gevers had both recently been in St. Moritz to speak at a blockchain conference; Kathleen was allotted a “fireside chat,” while Gevers had been invited to give his own talk—on ICO best practices. A friend of Kathleen’s who had run security for Metallica paid for a German bodyguard to accompany her. At a white-tablecloth dinner, a prominent table companion brought up rumors that Kathleen had placed a bounty on Gevers’ head. She had taken the comment to heart, and as she related the scene she looked at me with pleading humor. “Do I look like a violent person?”

Gevers had delivered his speech with a calm, commanding sense of impending victory. (On his PowerPoint slides, he quoted Warren Buffett, Elon Musk, and himself.) Immediately afterward he released a series of triumphalist tweets about the future of Tezos. “After months of incapacitating interference, obstruction, and attacks, the Tezos Foundation has regained the ability to act,” he announced. “For those seeking to understand what happened at Tezos—both its successes and its failures: ‘In a high-trust environment, the impossible becomes possible. In a low-trust environment, even the possible becomes impossible.’—Johann Gevers.” Further tweets, later deleted, seemed to link, if implicitly, the future of Tezos to Monetas, for which Gustinis had found a buyer.

The Breitmans, Kathleen said, took Gevers’ social media proclamations to indicate he was prepared to continue fighting a war of attrition. Though Tom Gustinis says he was personally paying Gevers’ rent at this point, the foundation had expensive lawyers on retainer; the Breitmans, meanwhile, were paying $250,000 a month in legal fees. As Kathleen put it, “It’s not a corporate-governance matter anymore, it’s a hostage negotiation.” When I asked how it had possibly come to this—Gevers, it seemed, could have just cut the checks, celebrated the network launch, and emerged a wealthy man—Kathleen could only throw up her hands. “He’s the world’s stupidest scorpion, and Arthur is the world’s most gullible frog.”

Kathleen now felt as though they had one option: brinkmanship. This was no longer about the utopia to come but ascendancy in the here and now. “I feel like I’m in a hole, so f*ck it, the game’s afoot. I’m going to blow this f*cking canton up. I’m going to play the hand I was dealt, and I’ve got a much better deck. I keep telling Arthur that the people on the other side are just going to play their game for a billion dollars. It’s not about the morality of crypto. It’s about shipping and winning the game. I’ve got 60,000 lines of code that will ship with or without those guys in Zug.”

She paused to stare out at the hills near Santa Barbara, blackened and denuded by fire. “They f*cked with the wrong nerds, is my take.”

Their will had been renewed by the fact that they no longer felt so alone. Once it had become clear that the original board’s efforts were at best nugatory, the Tezos community had formed its own parallel “T2” directorate. In partnership with this second foundation, she and Arthur would continue to fund the platform’s development out of their own pockets; it had cost them $1.5 million so far, but they’d made a lot of money on their early personal investments in Bitcoin. She couldn’t comment on anything that pertained to their legal entanglements, but an actual launch could conceivably change the juridical landscape: After all, it was the original billion-dollar foundation that had the contractual responsibility to roll out the platform and distribute the tokens. More than anything, though, they wanted to see Tezos live.