The Latest Spin on 'Signalgate.' Plus, a Crypto President is Born.
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Defense Secretary Pete Hegseth shared detailed plans for bombing Houthi militants. A spectacular security breach was uncovered this week, but according to the right-wing media, there's nothing to see here. More feigned phony outrage. This is now the scandal of the week that you will see nonstop, 24-7, that

that nobody will care about. From WNYC in New York, this is On the Media. I'm Brooke Gladstone. President Trump has declared he's sending education back to the states. But there's some tension in the ranks of MAGA. The voters who were the most emphatic about sending him back to the White House were also the most opposed to these voucher programs. Plus, Trump is all in on crypto.

So what could possibly go wrong? The next Bob Menendez is not going to be paid in gold bars and watches. He's going to be paid in crypto, probably already is. It's all coming up after this. On the Media is supported by Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy to see if you could save when you bundle your home and auto policies.

Try it at Progressive.com. Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states. From WNYC in New York, this is On The Media. I'm Brooke Gladstone. And I'm Micah Loewinger. Step away from the mic, Micah. I'll read your intros this week. Go back to the wellness room. Okay. All right.

The Atlantic reporter mistakenly added to a text chain with top security officials just released the messages that have started a massive national security controversy. Top intelligence officials were in a group on an app called Signal. The White House has been repeatedly saying that there were no classified information, there were no war plans discussed within those text messages. Take a look for yourself. I'll read a little bit of it here. These are texts from Pete Hegseth, the Secretary of Defense, talking about a 20...

1144 Eastern, that day, weather is favorable. Just confirmed with CENTCOM, we are a go for mission launch. 1215, text in this chat, F-18's launch declares this the first strike package. Just simply a stunning lack of operational security. The Atlantic story quickly became the biggest story of 2025 so far. According to social media engagement data collected by Axios,

And to think it just landed in Jeffrey Goldberg's pocket. I've been asked this question a few times today. It's why did you have such a hard time believing this? And the answer is because it's unbelievable.

In the chat, Secretary of Defense Pete Hegseth celebrated the group's clean OPSEC, or operational security, which is not the kind of thing you get to say in a war-planning text thread with a journalist watching on a commercial app installed to personal devices while one of your guys is traveling in Moscow.

Naturally, members of the press and probably half of the world's intelligence agencies went looking for other OPSEC failures. Wired tracked down several Venmo accounts belonging to officials in that signal chat. In some cases, those public profiles revealed contact lists and transactions.

Meanwhile, reporters at the German outlet Der Spiegel used search engines and combed hacked data floating around on the Internet to find emails and phone numbers belonging to National Security Advisor Mike Waltz, National Intelligence Director Tulsi Gabbard, and Defense Secretary Pete Hegseth. Most of these numbers are apparently still in use. I'm going to link to profiles on Instagram, LinkedIn, WhatsApp.

Hostile intelligence services could use this publicly available data to hack the communications of those affected by installing spyware on their devices. Suffice to say, Signalgate is a bombshell and a half. But according to America's most watched cable network, not so much.

So the very people that covered up their president's severe cognitive decline lied about wide open borders, both of which are clear and present dangers to our country, now want you to believe that they actually give a damn and care about national security. More feigned phony outrage. This is now the scandal of the week that you will see nonstop, 24-7, that nobody will care about.

Will Sommer, senior reporter at The Bulwark, has been covering the response from the administration and the conservative media. Initially, the Gateway Pundit, which is, you know, one of the main pro-Trump websites, said, yeah, it's real. And thank goodness. They called it a masterclass in leadership.

Also on Monday, Fox host Will Kane said... If you look at how they discuss potential strikes on Houthis in Yemen, what you will see is dialogue. If you read the content of these messages, I think you'll come away proud that these are the leaders making these decisions. And then it becomes, shoot the messenger, let's tar Jeffrey Goldberg. Yeah, Defense Secretary Pete Hegseth, who of course has an interest in this story minimizing or going away, just said...

You're talking about a deceitful and highly discredited story.

so-called journalist who's made a profession of peddling hoaxes time and time again to include the, I don't know, the hoaxes of Russia, Russia, Russia, or the fine people. They were effectively, you know, within the first 12 hours of the story coming out, the line from the White House was basically daring Jeffrey Goldberg to come out with this. When he didn't immediately within the same day publish the classified material, the

They were saying, you know, Jeffrey Goldberg doesn't really have this. He made it up or he drastically exaggerated the contents of what he didn't include in the initial story. And so it was a typically Trumpian total denial.

Of course, claiming it was a hoax was an uphill battle to say the least because in Jeffrey Goldberg's initial article for The Atlantic, he quoted a spokesperson for the National Security Council saying, yeah, this looks pretty real to us. Well, right. That's a great point. I mean, that confirmation from the National Security Council is apparently how he came to believe it was real in the first place.

Here's a fun piece of spin. On Monday, the day that the first article from The Atlantic was released, primetime host Jesse Waters mostly ignored the story but did deliver this defense. Did you ever try to start a group text? You're adding people and you accidentally add the wrong person. All of a sudden your Aunt Mary knows all your raunchy plans for the bachelor party.

Well, that kind of happened today with the Trump administration. And by the way, when he was saying this, the chyron under his face read, we've all texted the wrong person before. I believe there was also sort of a stock photo of kind of like an old lady going, oh, no, you know, holding a phone. It is these efforts to be like, well, look, you know, the group chat, it gets a little crazy. I mean, obviously, in the average person's case, the group chat doesn't include information that could be used to shoot down American planes.

The various efforts to either slime Jeffrey Goldberg or just to downplay this. I mean, you would think that Jeffrey Goldberg, he's like out of the weather underground, the way they treat him. I mean, this is a guy who is like the most sober, you know, milquetoast DC reporter type guy.

You know, I saw Benny Johnson, who's kind of like a MAGA podcaster, calling him like a gremlin, like a minion, you know, something like that. It's like, are we talking about the same guy? Jeffrey Goldberg was on the Bulwark podcast. My colleague Tim Miller said, they're saying you're lying. You know, are you going to release these texts? And he seemed so reluctant. I mean, it was almost like he had never even considered that possibility of releasing classified information. And yet that is sort of what the administration ultimately pushed him to do.

Mike Waltz would be the first head to roll, you would think. He's probably the only one who really knows how Jeffrey Goldberg made it into that chat in the first place, since he's the one who created the Signal Chat and invited him. Here he is speaking with Laura Ingraham on Fox News this week. How did a Trump-hating editor of The Atlantic end up on your Signal Chat?

You know, Laura, I'm not a conspiracy theorist, but of all the people out there, somehow this guy who has lied about the president, who has lied to Gold Star families, lied to their attorneys and gone to Russia hoax, gone to just all kinds of lengths.

to lie and smear the president of the United States, and he's the one that somehow gets on somebody's contact and then gets sucked into this group. What exactly is the implication here? That Goldberg, like, hacked Michael Waltz's phone or tricked him into getting an invite or, like, what's the logic?

Yeah, I mean, this is sort of one of the fascinating subplots here is that Michael Waltz has to explain why he has Jeffrey Goldberg in his phone. And I mean, Jeffrey Goldberg is a guy who writes pretty regularly about very high level national security stuff. And so the mind initially jumps to the idea that Michael Waltz has been leaking to Jeffrey Goldberg in the past, or at least knows him enough in a way that the very anti-press Trump administration that would sort of put a stigma on Mike Waltz. And I mean, look,

These are guys who have been in D.C. for a long time. It's not unreasonable that they would have each other's phone number even in a way that wouldn't be underhanded on Waltz's part. But if he's going to explain, oh, yeah, well, I call Jeffrey Goldberg up every so often and that's why he's in my phone. I mean that's not going to look great at the White House.

So he has to do things like, well, you all know how people can, you know, inject your phones in a way that puts a contact in there. And I mean, even in the most charitable way of seeing that, I was just like, I cannot, you know, look, we all have phones, right? And that's in part why this story is so damaging that people know how phones work.

And so you think, you know, number one, I don't understand that explanation. And number two, if the phone is that insecure that people can dupe you into adding people to the group chat about the airstrike, I mean, probably you shouldn't be discussing the airstrike on there in the first place. It's a great point. And Michael Waltz also said that he'd never met Jeffrey Goldberg sort of suggesting, oh, I don't even know who this guy is. And yet they've been like photographed together and stuff. Yeah.

Right. I mean, who? What? You know, this idea that, you know, this very kind of national security minded congressman in a previous life, this idea that he would know Jeffrey Goldberg is not that crazy. But now, of course, you have given the kind of the drain the swamp ethos. He has to act like I've never seen that guy before in my life.

Okay, but getting back to the contents of the Signal chat, one of the narratives that we heard emerge from right-wing media and from the Trump administration and its allies was, okay, well, maybe it is real, but what was leaked to The Atlantic just isn't that important. We heard this line repeated in one form or another from CIA Director John Ratcliffe, President Donald Trump,

and Tulsi Gabbard, Director of National Intelligence. During a Senate Intelligence Committee hearing on Tuesday, March 25th, Senator Mark Warner put this question to Tulsi Gabbard. So then if there's no classified material, share it with the committee.

You can't have it both ways. These are important jobs. This is our national security. A day after the initial Atlantic story comes out, after the White House has been saying, oh, you know, and Pete Hegseth, all this stuff, saying there was no classified information or this is entirely a hoax.

Jeffrey Goldberg sort of has to then come out and say, okay, well, here's the material. And so he publishes the strike information that Pete Hegseth put in the chat, which is very specific, and had an American enemy had access to it, they could conceivably have used it to shoot down American planes.

That comes out, and then it becomes such a semantic game. Well, they said, well, the Atlantic initially said these were war plans. And then in the second article, they called them attack plans. So they're kind of downplaying it. Yeah, it looks like Goldberg overpromised. This is how Fox & Friends co-host Lawrence Jones characterized it on Wednesday after the Atlantic released its follow-up story.

There's not war plans on it. At one point it talks about a target. It doesn't even say his name. It doesn't say locations according to it. This is probably sensitive information, but I'm not sure this is classified. After the second Atlantic article came out, this was Trump at the White House when asked if he still believed the information was not classified.

So it seems like the president had a kind of change of tune. I think that after The Atlantic finally releases the classified information, then, you know, it's going to be a lot more interesting.

They have to change it a little bit and say, well, you know, maybe it was real, but is it really that big a deal? Trump does a little bit of kind of throwing Mike Waltz under the bus, although apparently not enough to fire him and say, well, I think that was Mike's thing. You know, I mean, I think we're seeing like the hierarchy here is kind of protect Pete Hegseth at all costs. There is this kind of acknowledgement, but they say, well, it's not really that big a deal.

And then on Thursday, Attorney General Pam Bondi, who's mostly kind of avoided dipping her toes into this, was asked about the nature of the documents. And she said this.

our world is now safer because of that mission. We're not going to comment any further on that. If you want to talk about classified information, talk about what was at Hillary Clinton's home that she was trying to bleach. Talk about classified documents in Joe Biden's garage that Hunter Biden had access to. You know, I saw someone on Twitter quipping that, you know, that Bondi thing really...

really is symbolic of how so many members of the cabinet see themselves as doing Fox News talking head work for Trump. I mean, that quick pivot there to like, when are we going to talk about Hillary Clinton and the bleach bid on the server and so on, that I think is such a classic, like conservative media move, and not really what you would expect from an attorney general. Earlier, we heard a bit from Laura Ingram's interview with Michael Waltz, in which she seemed to at least express some basic incredulity and concern over the leak.

Are there other examples of right-wing commentators kind of breaking away from the pack? Or have they mostly banded together to kind of just offer damage control? We're seeing some people who are saying like, look, you know, people who perhaps would give the administration a lot of the benefit of the doubt who are saying like, this is getting a bit much even for me. We saw Dave Portnoy at Barstool Sports, kind of one of these bro podcaster types saying

who said, this is crazy. How has no one been fired for this? Trump, you may love Michael Waltz. You love Pete Heskin. Somebody has to go down. To me, it's Michael Waltz. You can't poo-poo it. You can't downplay it. You have to sit up there and be like, holy s***.

We saw Tommy Lahren of sort of the Fox News-iverse. She said, Oh boy, the debacle involving a group chat gone awry is such a gift to the rabid Democrats, and I hate that for us. I even saw, and this is a much more minor figure, but a guy who works for the podcaster, Stephen Crowder, just saying, you know, hey,

Like the administration clearly lied to us about what was in these text messages. And I thought that was interesting. I mean, this isn't a guy with a huge audience himself, but just to have someone kind of break the pose that they're so often in that anything Democrats in the media are complaining about is a hoax. I mean, just to say, you know, almost personally, like they lied to us about this. I thought that was interesting. What are you seeing from conservative audiences about their temperature on this story?

There is more disquiet on the right about this, and there is a sense that this definitely was a screw-up. At the same time, I think the Trump administration's policy of never admitting fault and trying to outrun the news cycle, I don't know, at this point it seems to be working.

Because absent an investigation, and obviously Democrats can't do an investigation because they don't control any parts of Congress, that it sort of seems like we've kind of hit the end of the new revelations in this story. And so it kind of seems to be quieting down. And I think a lot of Trump supporters and Trump media outlets are settling on, yes, mistakes were made, but it wasn't that big a deal.

That's pretty upsetting to hear because I had seen from one of the leaders at The Atlantic posting to the effect that so far this ranked as the number one news story of 2025. And I don't think just for The Atlantic, I think based on on traffic, it really seemed for a moment that some accountability might be on the horizon.

It is interesting because, I mean, the Trump administration already in just a few months has had so many screw-ups with the Doge things, laying off the people who handle nuclear security is just one example. I mean, all of these things that really have kind of failed to break through, I think, to the broader public as serious issues. And this one, whether it be because –

I guess like the group chat aspect of it is so relatable to people that this one seemed to break through. And yet, I mean, I think the Trump administration has done such a good job of having sort of a force field in Republican media and also sort of cowing members of Congress in the GOP that it seems like even this won't really shake it up. Oh, Will, thank you very much. I'm always happy to come on and help chronicle all this craziness. Will Sommer is a senior reporter at The Bulwark.

Coming up, as goes the DOE, so goes the long-standing American belief, if not the attainment, in true equality and a level playing field. This is On the Media. On the Media.

On the Media is supported by Progressive Insurance. You chose to hit play on this podcast today. Smart choice. Make another smart choice with AutoQuote Explorer to compare rates from multiple car insurance companies all at once. Try it at Progressive.com, Progressive Casualty Insurance Company and affiliates. Not available in all states or situations. Prices vary on how you buy.

What are the consequences of getting on Europe's bad side? The rationale is more like, f*** those guys. How is stealth wealth changing retail? You can have taste and still buy dupes. What does a $6.2 million banana have to do with any of it?

People don't like the attribution of serious financial value to comedy. Join me, Felix Salmon, and my co-hosts, Emily Peck and Elizabeth Spires, as we talk about the most important and obscure stories in business and finance. Follow Slate Money wherever you like to listen. This is On The Media. I'm Brooke Gladstone.

This week, the NAACP and several teachers' unions filed lawsuits against the Trump administration over its campaign to dismantle the Department of Education. A few days prior, the president declared in an executive order that he'd eliminate the department once and for all, even though Congress would need to approve such a measure. We want to return to the Department of Education.

our students to the states where just some of the governors here are so happy about this. They want education to come back to them, to come back to the states, and they're going to do a phenomenal job. But some of these MAGA-approved education policies have met with fierce opposition, even in red states like Nebraska, Kentucky, Tennessee, Texas, Colorado.

Particularly the school voucher programs, which allow parents to use public funds to pay for private schools and in some states, homeschooling. People are probably not aware of how much backlash those proposed programs are getting from the right. Jennifer Berkshire is the author of The Education Wars and co-host of the education podcast, Have You Heard?,

She says this impassioned pushback by conservative voters isn't getting much media coverage because it's so at odds with what we think we know about politics. We're so used to seeing teachers unions, public school advocates, etc. oppose school vouchers. But what we're seeing right now in Tennessee, where a voucher program was recently enacted, they've run into this buzzsaw of opposition from conservative groups.

who are saying basically, hey, wait a second. I thought we were against entitlements. And now you're saying that you want to just hand a pile of cash to parents and let them do whatever they want with it. In November in Kentucky, voters from every single county rejected an amendment to the state constitution that would have allowed public dollars to fund private religious education.

There were actually three voucher questions on different ballots in Kentucky, in Nebraska, and in Colorado. And Kentucky and Nebraska are the most interesting because those are states that went for Trump by considerable margins. And what you saw was that the voters who were the most interested

emphatic about sending him back to the White House were also the most opposed to these voucher programs. And so you had, you know, counties where you would see 80% of the Republican voters cast their vote for Trump and, you know, more than 65% vote against vouchers.

You've met a number of Trump supporters who've soured on the president due to the White House stance on vouchers. Kelly Jackson in Tennessee had participated in the insurrection on January 6th. She was so convinced that the election had been stolen. But now...

I would put her in the camp of Trump supporters who think that he's just getting bad information. She really sees what's happening with respect to vouchers as an all-out civil war within the Republican Party. On the one hand, you have the establishment, and those are basically the Republicans who run state government. And then you have the grassroots movement on the right,

these would be the folks who were absolutely furious about school closures, about vaccine mandates, etc. And if you were in a red state, well, those orders were coming from your elected Republican officials. And now those are the same officials who are backing vouchers in a big way. And so some of the folks, they're not convinced that Trump really supports vouchers and that if

He just had better information than he might change his tune. But I'm also talking to other folks who see vouchers as the big red flag that's causing them to have buyer's remorse. Even despite ads like this. We will give all parents the right to choose another school for their children if they want. It's called school choice. President Trump is right.

Kentucky parents deserve a voice in what their children learn. I think we have to think about this in terms of what

the MAGA movement claims to be. And it really does claim to be a populist movement. And we see tensions in all kinds of areas between this self-styled populist movement and the influence of billionaires. And school vouchers is really at the top of that list. In a state like Texas, you have a billionaire like Jeff Yass, hedge funder, richest man in Pennsylvania, big stake in TikTok,

And he basically works with the governor to engineer an effort to knock out all of the Republicans in the statehouse who were opposed to vouchers. A lot of these were rural Republicans. And so some Trump supporters are looking at that and saying, this is money talking. We don't like that. And now somebody like Brett Guillory, who's a welding teacher in Houston, says, you know, this is enough to make me question my support for Trump.

Trump says we're returning education back to the states. What's he mean? And how does that relate to what we think the DOE actually does?

Well, you know, it's right there in that initial act that established the Federal Department of Education all those decades ago. And I'm going to read it to you. It was to strengthen the federal commitment to ensuring access to equal education opportunity for every individual.

Now, when we back up and we think about what these guys are really talking about when they go after woke, when they complain about DEI, it's anything that the government does to help us realize that elusive goal of equality.

And that, I think, is why both the Department of Education is so vulnerable, but also public education as an institution. You weren't thrilled with some of the media coverage because of what you call its how-could-this-be-happening tone. You weren't surprised. You say that the 1776 commission that Trump set up in 2020 made clear that getting rid of the DOE was the plan all along.

Kevin Roberts from the Heritage Foundation has been saying for a long time he wants to scrap the DOE. And here's tape just from January. I think public schools are one of the noble promises of the United States, but they're rotten. We have to have the same verve and spirit of recapturing those local institutions or, figuratively, apply them.

applying a controlled burn and starting new institutions. I've done that myself and starting a K through 12 school and running an upstart college. If you read Kevin Roberts' new book, Dawn's Early Light, or Pete Hegseth's book, Battle for the American Mind,

They're making an argument about religion being booted out of the schools. And you have Christopher Rufo, who I'm sure your listeners will be familiar with. He was very much into a mischaracterizing critical race theory, that kind of thing. That kind of thing. He liked to see the number of students who attend college drop by half.

That's something that he told the Wall Street Journal, or he just did a big interview with Ross Douthat from the New York Times. By spinning off, privatizing, and then reforming the student loan programs, you could put the university sector as a whole into a significant recession. I think that putting the universities into declining budgets, into a greater competitive market pressure...

would discipline them in a way. Another person on this issue is a guy named Scott Yehner, who wants college admissions numbers reduced to less than 10%, and has argued repeatedly that too many women attend college. He called colleges and universities the citadels of our gynocracy, and that's a form of government run by women. Every effort must be made not to recruit women into engineering...

but rather to recruit and demand more of men who become engineers.

Ditto for med school and the law and every trade. Young men must be respectable and responsible to inspire young women to be secure with feminine goals of homemaking and having children. My advice is always pay attention to how does what they're saying relate to larger intellectual currents around the Trump movement. So we're hearing a lot of concern in all these different parts of the Trump administration about the falling birth rate.

Well, now you're starting to hear very influential folks from these think tanks, Claremont, Heritage, say, you know, it's a big mistake that we're encouraging so many young women to go to college during their most fertile period. Right.

And maybe we should make college harder to access and then they'll stay at home and do what God intended them to do. You say that the far right both wildly overstates the power of federal education and understates what it means to get rid of it. If you're getting a nonstop...

outrage diet fed to you through, say, Fox News or online, then in your mind, not only are kids being indoctrinated, but the blame lies at the feet of the Federal Department of Education. And actually, the Federal Department of Education has absolutely nothing to do with curriculum. In fact, they're banned from having anything to do with curriculum. So what

the federal Department of Education does is provide funding in order to equal out divides that exist between urban and rural, between rich and poor. And so the vast majority of the money goes to low-income kids in what are called Title I schools. Money goes to rural kids. And then, you know, a lot of what the federal department does is enforce student civil rights because those civil rights are federal, right?

right? They come from the 14th Amendment. And so whether that has to do with race or with special education, which is another program, that's the Individuals with Disabilities Education Act,

It is the federal Department of Education through which those rights are enforced. So when you hear Trump say, we're going to return education to the states, it's important to look at what education looked like prior to the 1970s, when there wasn't a mechanism for enforcing civil rights. And in fact, kids with disabilities were not entitled to an education at all.

Another thing that the Department of Education has done for a long time is to collect data to help understand the disparities in learning across demographics like race and location. And I guess that's over.

We actually had a federal Department of Education that lasted for one year after the Civil War. And the idea was that, you know, we were going to look at how education was faring in all the different states and that the federal government would now be paying particular attention to the literacy levels of former slaves.

And you can imagine how that went down in the states of the Confederacy. And so you fast forward to today, the chainsaw that came for the Department of Education landed heavily on the folks who measure how are the different what they call subgroups in education faring. Just to give you one case.

what we call the nation's report card, you know, there are only three people left now who oversee it. If we don't have any data, you know, what's to stop President Trump from just declaring victory, right? And saying, we did it. We dismantled the department. We sent education back to the states. Now we're number one.

The aforementioned Scott Yehner, who's terrified of our gynocracy, he said he wants to see states criminalize the collection of data on the basis of race or sex as, quote, the country's corrupting civil rights regime. You've suggested that woven all through this is race science, the belief that

a hierarchy is good and natural, and that a cognitive elite with the highest of the high IQs deserve to rule over the rest of us all in our natural place. If you listen closely, you'll notice that a lot of the folks around Trump, including a Chris Ruffo or an Elon Musk, they're always talking about IQ. If your view of the world is that there are certain very high IQ individuals and

and certain very low IQ individuals, then why bother with something like public education at all, where the goal is to try to take kids who come from all kinds of backgrounds and deliver them to the same aspiring place, right? You're messing up the natural order of things.

In considering the consequences of the wrecking of the DOE, you looked to Horace Mann, who's often been called the father of American education. What wisdom did he provide?

Well, his famous quote about education being the great equalizer is, you know, it's really been reduced to like the stuff of coffee mugs and inspirational office art. But if you go back and you read the essay that that quote came from, what's so fascinating is what a warning it is. So we're back in the late 1840s and he's looking across to Europe, which is in the throes of populist revolt.

And there's a lot of concern on the other side of the pond that it's only a matter of time before the populists come for America. The populists, meaning the people? The people are going to rise up in the way their European counterparts are. Revolution is on its way. And Horace Mann is basically warning the wealthy. He's saying, you know, you,

may not have any interest in funding education, but I'm going to tell you here's why you should care about it. Because if the gaps between the haves and the have-nots continue to widen, these folks are coming for you, right? They're going to smash up your farm equipment. They're going to pour acid on your wife's dresses. You're going to set fire to your Tesla lots.

It is not a coincidence that somebody like a Bernie Sanders who's out on a tour trying to wake people up about the dangers of oligarchy right now is attracting overflow crowds. And you are seeing people across party lines stand up and say, I'm really worried about the future. I'm really worried that we're headed towards a world where the wealthy get theirs and more and I get scraps.

Jennifer, thank you so much. Thank you so much for having me. Jennifer Berkshire is the co-author of The Education Wars. Coming up, tracing the crypto grift to and from the White House. This is On The Media.

On the Media is supported by Progressive Insurance. You chose to hit play on this podcast today. Smart choice. Make another smart choice with AutoQuote Explorer to compare rates from multiple car insurance companies all at once. Try it at Progressive.com. Progressive Casualty Insurance Company and affiliates. Not available in all states or situations. Prices vary on how you buy.

What are the consequences of getting on Europe's bad side? The rationale is more like, f*** those guys. How is stealth wealth changing retail? You can have taste and still buy dupes. What does a $6.2 million banana have to do with any of us? People don't like the attribution of serious financial value to comedy.

Join me, Felix Salmon, and my co-hosts, Emily Peck and Elizabeth Spires, as we talk about the most important and obscure stories in business and finance. Follow Slate Money wherever you like to listen.

This is On The Media. I'm Brooke Gladstone. Back in 2021, President Trump took to Fox News to blast the crypto industry. Do you ever dabble in Bitcoin or cryptos? I don't. I like the currency of the United States. I think it's potentially a disaster waiting to happen. Bitcoin just seems like a scam.

But just one year later, Trump's Truth Social account posted a video with an animated image of the then-candidate in a superhero suit with lasers shooting out of his eyes. Hello, everyone. This is Donald Trump, hopefully your favorite president of all time, better than Lincoln.

I'm doing my first official Donald J. Trump NFT collection right here and right now. My official Trump digital trading cards are $99, which doesn't sound like very much for what you're getting. The president's card drop made about $4.5 million, but apparently he was just getting started. Last July, he took to the stage of a Bitcoin conference in Nashville, Tennessee. This afternoon, I'm laying out

my plan to ensure that the United States will be the crypto capital of the planet and the Bitcoin superpower of the world. And we'll get it done. Those who say that Bitcoin is a threat to the dollar have the story exactly backwards. I believe it is exactly. And ever since he re-entered the White House, the president has worked energetically to earn the mantle of crypto

Thank you.

So why the about face? The simple answer is money. This week, Micah, with what little was left of his voice, spoke to Jacob Silverman, who reports on tech, crypto, politics, and corruption, and co-authored the book Easy Money, Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud.

I mean, Trump changed his mind because his sons and the venture capitalists around him in the 2024 election cycle showed him the light that if you are on the inside of crypto, if you are someone issuing tokens or running an exchange, you can make money from nothing. But there's also, of course, the self-interest in terms of campaign finance donations.

The crypto industry was, by some measures, the top donor of any industry to the Trump campaign and the Republican Party, more than $200 million raised. They went really all in for Trump in a way that was really out of proportion to the role that crypto plays in the larger economy. I mean, this isn't pharma. This isn't the energy sector. This is actually a very niche industry. But they managed to flood politics with so much of their own cash.

President Trump's first official foray into the crypto business was in December when he launched World Liberty Financial, a crypto bank that we still don't really know that much about. And in January, just days before his inauguration, he announced he'd be launching the Trump meme coin. For those of us who don't know anything about meme coins, what are they?

A meme coin is worthless. This is less than a penny stock, but it's really just a digital token that someone creates online in response to a meme, an event in the news, or something like that. Some people may be familiar with the Hak Tua lady who had a meme coin, Pepe the Frog coins. Anyone can make one. Yes. Most of these have a lifespan of really seconds.

But the Trump coin, of course, benefited from being Trump. This is a meme coin at the highest levels of publicity. And that's all a meme coin operates on is publicity and hype. And so people pour into it. They see the price rising based on all this hype.

And they try to buy in early and then sell pretty much as soon as they can. And that's when you get the dump. This is a classic pump and dump. Yeah, and from what I understand with these meme coin pump and dumps, if you think that you're early to the dump, you're just another sucker. Because there's always somebody who's behind the scenes, knows when the coin is going to be on sale and when it's going to be dumped, right? Yes, frankly, this happens in every case like this.

There's always someone on the inside or a group who have the tokens, who know the launch schedule. Those are the people doing the dumping on the poor retail suckers who may genuinely think that they have a chance of making some money here. According to analysis from the New York Times, blockchain records show that the account behind the first large purchase of Trump coin, nearly $1.1 million worth, was created three hours before the president launched the coin.

Another trader who made $2.7 million in profit started buying the coin just two minutes after it launched. The Times has said that these well-timed trades immediately drew skepticism from crypto analysts who said, yeah, this reeks of insider trading. Who made money off of this exactly? What do we know?

Trump and his team who control the walls, who initially distributed the coins, something like 70%, I believe, of the tokens were set aside for insiders, for Trump and its team. Insiders have been able to cash out for probably tens or hundreds of millions of dollars. You were recently interviewed for a piece in Wired arguing that meme coins are, quote, channels for influence and leverage of a kind we haven't really seen before.

Break that down for me. Sure. There are a couple ways now in which Trump can essentially be paid off with bribes. There's the Trump token, which we've talked about, but there's also the World Liberty Financial Token, WLFI. It's what's called a governance token. You buy it and you don't trade it, but you supposedly get to vote on things that happen on the platform. Right now, there's not much to vote on.

And you can't sell this token either. So you're really just giving a donation to Trump. It is in any country's direct interest to buy Trump tokens or to buy the World Liberty Financial Governance tokens and inflate the value of his own holdings.

And what we've seen is that Justin Sun, a rather notorious Chinese crypto entrepreneur who operates in various jurisdictions overseas, he initially bought about $30 million worth of this World Liberty financial token, then later another $45 million. And then recently, the SEC dropped its fraud case against Sun. Let's talk about another example of this.

Changpeng Zhao. He was the former CEO of Binance. He was also in hot water with the SEC for money laundering, among other violations. He pled guilty and spent four months in federal prison. Binance agreed to pay $4.1 billion, which was the largest fine in U.S. corporate history. But then this ongoing case was also put on hold by Trump's SEC. What happened there?

Chang Peng Zhao, or CZ as he's widely known, is probably the most powerful person in the crypto industry. After Sam Bankman Freed went to prison, CZ saw the writing on the wall and took a deal that resulted in him only going to prison for four months.

This is a very unusual company. Binance is the biggest crypto exchange in the world. It doesn't have an official headquarters. They are now sort of unofficially based in the UAE, but for years they have obfuscated

where they are based, where they're registered, where their employees are, where the money goes. This is the shadiest crypto company there is. And it was still under investigation by the SEC. According to the Wall Street Journal and Bloomberg, I believe, Binance and CZ saw the Justin Sun deal as a potential model for CZ. Yes, as you mentioned, on March 13th, the Wall Street Journal reported that the Trump family had held talks with Binance.

in which the idea was floated that Trump would pardon CZ and invest in Binance's U.S. division. From what I understand, people from Binance have denied this, but that seems pretty sketchy. Binance, it's changed a little bit, but it was the Wild West of crypto platforms. I mean, its employees joked that

People were on the platform for crime. There's a notorious line about that. They knew how much an AK-47 went for in markets in the Middle East because terrorists and militias laundered money through Binance that they used to buy AK-47s. I mean, this is stuff that's in SEC filings. You can read all about how lawless and corrupt this company was. And the SEC under Trump has now dropped...

It's other major crypto cases like the one against Ripple and Coinbase. I mean, what are the consequences of our government just turning its back on this kind of enforcement? The Trump administration has basically said the crypto industry is right. All these enforcement obligations are over. We're not only going to not subject the crypto industry to existing financial laws, but we're going to start pulling away at what is there. And this system, that imperfect as it is,

has been trying to protect consumers against the kind of instability that crypto can introduce into markets because it's extraordinarily volatile and because it's so associated with fraud. So whether we like it or not, crypto is going to creep more into mainstream finance and everyday people will have exposure to crypto through their retirement accounts worldwide.

even if they don't directly buy into it. And that's really the fear that once crypto blows up again, because it has this rapid boom and bust cycle, that this time the contagion will infect the larger financial market and really hurt the larger economy.

One way that ordinary people, as you say, whether they like it or not, will be exposed to crypto's volatility is through a couple new crypto reserves created by Trump executive orders. And you say that these crypto reserves amount to a bailout for the crypto industry. How is it a bailout and not like some kind of subsidy?

Well, it's a bailout because some of these venture capitalists might be underwater and because these investments, so to speak, aren't necessarily like normal investments. They basically operate on hype and on the greater fool theory, which is that you have to find ways to drive the price up in order to offload your bag of tokens to someone who thinks that they're worth more than you do. That's the greater fool theory in economics.

That's what happens when the government gets involved in crypto markets, whether it's just by talking about those tokens, buying them, promising to hold them. This would raise the price, but also just show the government's commitment to maintaining crypto prices and the Bitcoin market.

We're not there yet. But there is this movement towards the government buying the tokens and providing a price floor for speculators and for these VC investors. So that's why I call it a bailout and a way of just paying back his donors.

This is so confusing to me because I thought the whole point of cryptocurrency was so that you could have these financial assets outside of the government's reach and view, right? Yeah.

This is a sign of how crypto has changed its story and sort of its search for use case and purpose. Of course, crypto started as a rather libertarian, fairly right-wing anti-state effort. It was supposed to be about decentralization, disentanglement from the state. One thing that crypto has found over the years as an industry is that you can't have a separate hived off crypto economy. You need infusions of real money, of regular cash, because the world still runs on fiat, on state-issued dollars.

Crypto is always looking for new sources of real dollars. Two to four years ago, they were getting it from retail investors and from venture capitalists.

Now the new source of real money is the state and Wall Street. And that's why they want the government to start stockpiling crypto, because they still need that fresh cash coming in to float the value of these digital assets. These two actions from the Trump administration that we've discussed, Trump's various meme coins and his proposed crypto reserves,

have incited kind of polarized reactions from the crypto community. What are the kind of conflicting narratives that you're hearing about Trump and crypto? They got a little bit more than they bargained for. They expected Trump to be their friend and ally on a policy and personnel level, but not to be, frankly, one of the country's leading crypto entrepreneurs. We saw this especially inauguration weekend when the Trump coin was released and

First of all, it was released during a crypto ball when a lot of crypto people weren't looking at their phones and later complained that they weren't able to get in early on it. They couldn't cash in. Exactly. They were at this event celebrating David Sachs and others. Right.

More than that, you have people who, again, are committed Trump supporters who said, look, we know what this is. This is a meme coin. There's a more derogatory term for it, too. That's probably not suitable for radio. S-coin. Yeah. And this is kind of unseemly. A major concern for the crypto industry is, hey, how do we onboard the next billion users?

And if people FOMO in because Trump releases a token and then a day later they lose their 500 bucks, they're not going to want to stick around. Some haven't liked the idea of the crypto reserve because they're

It does go against some of the original spirit of crypto. It's the government getting involved. It's also the government choosing winners and losers and kind of picking favorites. Someone like Joe Lonsdale, who's a very prominent venture capitalist, co-founder of Palantir, big Trump supporter, he posted publicly on X that he doesn't like his money being used for lefty grifts and he doesn't like it being used for crypto grifts.

We've talked about the Trump administration's SEC pausing some of its investigations into well-known sketchy characters in the crypto world.

This administration has also been dismantling the guardrails that safeguard against financial crime. In February, Trump paused the Foreign Corporate Practices Act, which makes it illegal for American individuals or companies to bribe foreign officials for the purpose of obtaining business. Earlier this month, Trump suspended enforcement of the Corporate Transparency Act, which requires companies to divulge ownership information.

What kind of financial world is this teeing up? It's one in which you don't know where money is coming from or where it's going. Shell companies rule the world because they don't have to report their beneficial owners to the U.S. government. I think it's very disturbing, and I think it's one in which financial crime is essentially legalized. It makes sense that some of this comes from the crypto world because crypto, it benefits a lot from what's called

regulatory arbitrage, which is where these crypto companies go between, say, from Hong Kong to the Caribbean, like FTX did, to take advantage of limited rule of law.

And what we're seeing is the U.S. is becoming one of those regulatory arbitrage opportunities because the rule of law is eroding here, and that's going to create opportunities for corrupt financial actors, whether it's crypto scammers or foreign governments trying to bribe American officials. The next Bob Menendez is not going to be paid in gold bars and watches. The senator from New Jersey who was bribed by Egyptian intelligence, he's going to be paid in crypto, probably already is.

We are moving away from a world in which we can control or even understand how that kind of crime is happening. Jacob Silverman is a journalist and co-author of Easy Money, Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud. Jacob, thank you very much. Thank you.

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