Every so often a figure arises who so perfectly encapsulates society’s great flaws, humankind’s natural greed and our cross-cultural tendency to scapegoat our problems. That person is divisive, obviously. But also strangely beloved.
Martin Shkreli, 39, the former hedge fund manager turned convicted felon and social media troll with a cult-like following, was recently released from prison. Shkreli is that almost-mythic person who signifies all that is wrong with society, and he relishes the role.
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He has also captured the attention of the crypto industry, a field as known as much for its problems as for the solutions it may offer. Crypto, apparently, has captured his attention – in what may appear to be an obvious marriage.
Last Wednesday, the Brooklyn, N.Y.-born former pharmaceutical executive was released from federal prison in New York after serving four years of a seven-year sentence for securities fraud and was transferred to a halfway house. Shkreli is known infamously for buying the rights to an antiparasitic drug called Daraprim and increasing the cost to $750 per tablet from $17.50.
Although drug price jumps are somewhat routine within the for-profit U.S. health care and research industry, Shkreli achieved instantaneous notoriety for what was obvious price gouging of a life-saving drug the World Health Organization lists as an essential medicine used by pregnant women, the elderly and HIV-positive patients.
In a nonjury trial on various financial schemes, federal and state health regulators argued Shkreli attempted to form a monopoly over this drug by keeping generic versions off the market. He said he had his reasons: that insurance companies, not people, would pay the increased price and the profits would go to developing other medical technologies.
He lavished in the abuse and confusion he created. On social media he was known for his inflammatory statements, like saying he wished he had raised the drug’s price even higher. He paid $2 million for a single recording of a Wu-Tang Clan album, and followed that rap group’s wishes by keeping it under lock and key. (Incidentally, Shkreli paid part of his $7.4 million fine through the government sale of that album, "Once Upon a Time in Shaolin," which is now owned by a decentralized autonomous organization.)
And, following his recent release from low-security imprisonment, Shkreli wants to return as troublemaker and hornet nest kicker. Mere hours after settling into his court-mandated halfway house, Shkreli began to post under an alias. The account, @Enrique5060782, which is currently suspended, made little attempt to hide Shkreli’s real identity. (Much to his lawyer’s chagrin, I imagine, who said upon Shkreli’s release that his client wouldn’t be available for comment.)
A knack for controversy
By Friday, crypto’s “terminally online” knew who Enrique was and what he was about: crypto. On Saturday evening, Shkreli participated in a Twitter Spaces audio event where he revealed that he used Uniswap behind bars, thinks ether (ETH) will flippen bitcoin (BTC) and views “utility tokens” as a good idea.
His statements during the Saturday night stream with upwards of 3,000 listeners, and otherwise, show that Shkreli is not only informed but still knows how to create controversy. He said he’s planning a non-fungible token (NFT) drop, that Enrique may not be his only alternative avatar and that he may be participating – perhaps as a developer or investor – in other big name decentralized finance (DeFi) projects.
“The idea that I can’t buy a Tesla share without going through this [Securities and Exchange Commission] apparatus and all these other steps is kinda nuts,” Shkreli said in the Twitter Spaces. “There are people breaking the silo and trying to destroy it forever, I hope.”
He was referencing synthetic, token-variants of publicly traded stocks like “Apple coin and a Tesla coin,” which is what fellow flawed entrepreneur Do Kwon, of the imploded Terra network, was targeting with the unregulated securities exchange called Mirror Protocol.
A16z founder Marc Andressen and other giants of the venture capital space, along with the recording artist and Web 3 enthusiast Sia, interacted with Shkreli during his Saturday night ramble as Enrique. A Substack representative reportedly asked to join the newsletter platform.
Many people in the business world consider Shkreli a “public intellectual” worth listening to, noting his intelligence. He graduated high school in two years and found his way working at a premier hedge fund before starting his own.
Some appreciate his self-awareness: He has lovingly referred to himself as “Pharma Bro,” the jibe used in many headlines. And when he speaks, on a variety of subjects, he is convincing. Prison wasn’t too bad, he said. He once said he has “an extremely weird form of sarcasm” and that it’s “fun to see people get so animated.”
“Authenticity is really important to me,” he told Vanity Fair in 2015. That’s a term also used in crypto.
An industry that celebrates controversy
Although no one speaks for the entire crypto industry, it’s fair to say Shkreli has received a largely warm reception. Despite receiving numerous insults and reminders that he’s a convicted felon during his short Twitter stint, the overall mood was pure delight.
“Martin Shkreli literally knows more about Crypto than 99% of you from prison. He’s talking about [proof-of-stake] and [S]tepn. No excuses. Autism unleashed!” venture fund Autism Capital’s Twitter account posted.
Shkreli getting involved in crypto makes sense. The industry tolerates, even celebrates, controversial figures. It forgives scammers easily and allows people to build second lives – as pseudonyms or not. Onlookers might see Shkreli’s open embrace of crypto and crypto's reciprocity as speaking to crypto’s nefarious or facile attributes. Scams absolutely run rampant. In a sense, these people are right. If “Pharma Bro” completes his transformation to Crypto Bro, that is saying something about crypto’s ends and purpose.
See also: Why CoinDesk Respects Pseudonymity | Opinion
At its best, however, crypto is about financial inclusion. Decentralized finance, bitcoin and the myriad ways blockchain is being deployed all share a common aim: removing gatekeepers and expanding access.
This means that crypto, by default but not always in practice, tolerates the good and the bad. It’s a machine that anyone can run, no matter their objectives. This is a radical view of tolerance, one that is at the center of the American experiment with free and open speech and association protected by the First Amendment.
But that doesn’t mean the industry needs to accept Shkreli. He’s obnoxious – makes a show of drinking Chateau Lafite Rothschild wines – and a criminal. Although he said DeFi is a tool for “freedom,” it’s clear enough he’s interested primarily in building back his fortune.
Shkreli is barred for life from the pharmaceuticals industry and will not be allowed to run a publicly traded company. In her decision, the judge overseeing his trial called Shkreli a "chaotic, dishonest and untrustworthy corporate leader" who would likely violate the law again. He tanked at least two hedge funds, hid profits and was deceptive in his communications and deals.
Although he has called himself a Robin Hood – a capitalist willing to steal from the rich to benefit the needy – in his pharmaceutical business there’s no real reason to believe him. He’s an orator, maybe a sophist – and perhaps it’s good he’s banned from Twitter, despite the joy he may bring.
I wouldn’t want, nor is it possible, to keep Shkreli from profiting in crypto, nor should he be scapegoated for the industry’s failings. To be sure, he may also have changed. But people should consider what he builds and how he markets it when that eventually arrives.
“I bought an Enigma machine,” Shkreli once said. “I’m conflicted because it’s a Nazi relic. It’s like owning a gas chamber … but it’s a constant reminder that we should use knowledge for good, even if the process is ugly … [B]ut if you hold your nose during the process of proving it, you get to the right place.” Let the enigma act, and hopefully do no wrong.