From time to time, a character emerges who so perfectly sums up society's great failings, people's natural greed, and our cross-cultural tendency to seek scapegoats for our problems. Divisive, for sure. But also oddly 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 this almost mythical person who embodies everything that is wrong with society, and he relishes the role.
He has also attracted the attention of the crypto industry, a field that is as well known for its problems as it is for the solutions it can provide. And the crypto industry has apparently caught his attention as well - in a seemingly obvious connection.
Last Wednesday, the Brooklyn-born former pharmaceutical executive was released from prison after serving four years of a seven-year sentence for securities fraud. Shkreli is known for buying the rights to an antiparasitic drug called Daraprim and raising the price from $17.50 per tablet to $750.
Although a routine transaction in the for-profit U.S. health care and research industry, Shkreli gained instant notoriety for his apparent price gouging on a life-saving drug that is classified by the World Health Organization as an essential medicine for pregnant women, the elderly and HIV-positive patients.
In a non-jury trial on those financial schemes, which Shkreli committed and for which he served a prison sentence, federal and state health officials argued that he tried to establish a monopoly on that drug by keeping generics off the market. He said he had his reasons for doing so: the insurance companies, not the people, would pay the higher price, and the profits would go to developing other medical technologies.
He profited from the abuse and confusion he caused. He was known on social media for his inflammatory statements, such as wishing he had priced the drug even higher. He paid $2 million for a Wu-Tang Clan album that he recorded only once, keeping it under wraps at the group's request. (Incidentally, Shkreli settled part of his $7.4 million fine through government sales of "Once Upon a Time in Shaolin," which is now owned by a DAO.)
And after his recent release from maximum security prison, Shkreli plans to return as a troublemaker and troublemaker. Just hours after settling into his court-ordered halfway house, Shkreli began posting under a pseudonym. The account @Enrique5060782, which is currently suspended, made little effort to hide Shkreli's true identity. (Much to the chagrin of his lawyer, who said after Shkreli's release that he would not be available for comment.)
A knack for controversy
By Friday, crypto supporters knew who Enrique was and what he was all about: crypto. On Saturday night, Shkreli participated in a Twitter Spaces audio event where he revealed that he uses Uniswap behind bars, believes ETH will flip BTC, and thinks "utility tokens" are a good idea.
His statements during Saturday night's stream with more than 3,000 listeners and otherwise show that Shkreli is not only informed, but still knows how to create controversy. He said he is planning an NFT drop, that Enrique may not be his only alternative avatar, and that he may be involved - perhaps as a developer or investor - in other notable decentralized finance (DeFi) projects.
"The idea that I can't buy Tesla stock without going through this SEC apparatus and all these other steps is kind of crazy," Shkreli said in the Twitter space. "There are people breaking the silo and trying to break it forever, I hope."
He was referring to synthetic token variants of listed stocks such as "Apple Coin and Tesla Coin," which were also targeted by another failed entrepreneur, Do Kwon of the imploded Terra network with the unregulated securities exchange called Mirror Protocol.
A16Z founder Marc Andressen and other venture capital industry bigwigs, as well as artist and Web 3 enthusiast Sia, interacted with Shkreli during his Saturday night foray as Enrique. A representative from Substack reportedly asked to join the newsletter platform.
Many people in the business world consider Shkreli a "public intellectual" worth listening to and appreciate his intelligence. He graduated from high school in two years and found his way at a leading hedge fund before starting his own.
Some appreciate his self-awareness: he has affectionately referred to himself as "Pharma-Bro," a taunt used in many headlines. And when he speaks on a variety of topics, he is persuasive. Prison wasn't so bad, he says. He once said he has "an extremely wry form of sarcasm" and it's "fun to see people get upset."
"Authenticity is very important to me," he told Vanity Fair in 2015. It's a term also used in the crypto industry.
An industry that celebrates controversy
While no one speaks for the entire crypto industry, it's fair to say that Shkreli has received a largely warm reception. Despite numerous insults and reminders that he is a convicted felon, the general mood during his brief Twitter stint was pure joy.
"Martin Shkreli literally knows more about crypto than 99% of you from prison. He talks about proof of stake and stepn. No excuses. Autism unleashed!" posted the Twitter account of venture fund Autism Capital.
Shkreli's involvement in the crypto industry makes sense. The industry tolerates controversial personalities, even celebrates them. It easily forgives scammers and allows people to build second lives - under pseudonyms or not. Observers might see Shkreli's open embrace of cryptocurrency and its reciprocity as indicative of cryptocurrency's nefarious or superficial qualities. In a sense, these people are right. When the "pharma bro" makes its transformation into a crypto bro, it says something about the purpose of cryptocurrency.
However, at its best, cryptocurrency is about financial integration. Decentralized finance, Bitcoin, and the myriad uses of blockchain all share a common goal: to remove gatekeepers and expand access.
This means that cryptocurrency tolerates the good and the bad by default, but not always in practice. It is a machine that anyone can run, regardless of their goals. This is a radical view of tolerance that is at the heart of America's experiment with free and open expression and association, which is protected by the First Amendment.
But that doesn't mean the industry has to accept Shkreli. He's obnoxious - makes a show of drinking Lafite-Rothschild wines - and a criminal. Although he said DeFi was a tool for "freedom," it's clear enough that he's primarily concerned with rebuilding his fortune.
Shkreli will be banned from the pharmaceutical industry for life and will not be allowed to run a publicly traded company. In her ruling, the judge overseeing his trial called Shkreli a "chaotic, dishonest and untrustworthy corporate leader" who would likely break the law again. He ran at least two hedge funds into the ground, hiding profits and being deceptive in his communications and dealings.
Although he has called himself a Robin Hood - a capitalist willing to steal from the rich to help the needy - there is no real reason to believe him in his pharmaceutical business. He's a talker, perhaps a sophist - and perhaps it's a good thing he's banned from Twitter, despite the joy he may bring.
I don't want to discourage Shkreli from profiting from cryptocurrencies, nor is it possible to make him a scapegoat for the industry's failings. Certainly, he may have changed as well. But people should consider what he's building and how he's marketing it when the time comes.
"I bought an Enigma machine," Shkreli once said. "I'm torn 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.... But if you hold your nose during the process of evidence, you get to the right place." Let the puzzle work its magic and hopefully don't do anything wrong.