From the Fiji Island Mermaid to Lance Armstrong’s Tour De France wins, it always feels good to expose a fraud.

And in crypto, where consumer confidence is the name of the game, it’s very possible for liars and fakes to rise to the top.

But today, we’re exposing a crypto creator and his two “promising” projects for what they are: big fat phonies.

Get ready to pull back the curtain on a wizard of lies in today’s deep dive.

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Espresso Shots

☕ Robo-Satoshi 🤖🪙

On Wednesday, AI developers Pierre Corbin and Hugo Ferrer released their new chatbot, “Talk2Satoshi.”

Built on OpenAI, Talk2Satoshi’s personality and knowledge were developed from the accumulated posts and interviews with the pseudonymous creator of Bitcoin.

Talk2Satoshi is intended to serve as a tool for those looking to further their Bitcoin education. Though admittedly, because its database only contains Satoshi’s works, it is somewhat limited compared to other chat bots.

Of course, the first question anyone would ask Talk2Satoshi would be Satoshi’s real identity, to which it responds:

“I remain anonymous as I believe decentralization is key to the success of Bitcoin.”

Wow, just like the Order of Elks or the Freemasons, Talk2Satoshi manages to be both mysterious and kind of stupid.

☕ GameStop Enters Web3 🕹️🎮
GameStop has joined forces with the Telos Foundation, the group behind the Telos blockchain, to begin the video game retailer’s initial steps into Web3.

"We believe this collaboration will be a meaningful driver of new users into the Web3 space,” said A.J. Dinger, head of business development at Talos. “By combining GameStop Playr with Web3 games utilizing Telos' high-performance blockchain infrastructure, we can break down many of the barriers currently deterring Web2 players from embracing Web3."

This has been part of an ongoing initiative at GameStop to shift focus from its brick-and-mortar stores and shift focus to digital offerings and now, Web3 gaming.

The inevitable GameStop Web3 marketplace will also feature Kyle, from your hometown, a pimply cashier who can’t resist ringing you up without telling you he’s got some, “big things in the works.”

☕ Crypto Tik-toker Pleads Guilty to Financial Crimes ⚖️📱

Denish Sahadevan, aka social media personality Danny Devan, pled guilty to a bevy of financial crimes in federal court on Wednesday.

Danny Devan is based in Rockville, Maryland and known on Tik-Tok for his financial advice on stocks and crypto. His crypto predictions were even featured in a 2022 article for Business Insider.

But it turns out that Devan’s fortune wasn’t amassed through crypto plays, but rather by faxing tax forms, bank statements, and applying for a series of fraudulent COVID-19 relief loans.

“Sahadevan faces a maximum sentence of 20 years in federal prison for wire fraud; a maximum of 10 years in federal prison for money laundering; and a mandatory sentence of two years in federal prison, consecutive to any other sentence imposed for aggravated identity theft,” reads a press release from the District of Maryland DOJ.

These are just the crimes that Danny Devan has pled guilty to, as a Tik-Toker, Devan’s real crimes are against culture and society.

Spilling the Beans

Crypto Fraud EXPOSED 😳 🚨

Richard Heart has been the face of two ongoing crypto projects, Hex and PulseChain.

But what if the face of these two developing blockchains was actually… two-faced.

Richard Heart, aka Richard James Scheuler (okay, as a general rule of thumb, when someone goes by two names and one of those names isn’t Madonna or Sting or something, they’re probably a scammer) pumped up the crypto public with talk of his alternative to Ethereum.

And it worked, for a while.

While those less savvy were entranced by the concept of Ethereum with lower gas fees, Heart’s promises spawned plenty of skeptics.

And chief among those skeptics was blockchain researcher, Eric Hall. Hall coined the term “Bizarro Crypto.”

If you’re not familiar with DC Comics’ Bizarro, he’s essentially the inverse superman. He’s ugly instead of handsome, with pale skin and bad teeth. He lives in Bizarro World and talks like a caveman. Whereas Superman has laser vision and ice breath, Bizarro has ice vision and can burp fire.

In crypto, Bizarro is the term applied to crypto that seems promising on the surface, but isn’t quite right.

And when you start to DYOR on PulseChain and its native PulseX token, it seems that things are very off.

The most glaring issue? PulseChain and PulseX are essentially identical copies of Ethereum and Uniswap, but with way higher gas fees.

The one thing that Richard Heart promised? The lower gas fees? Even the most surface level research is going to find out that’s patently false.

But while the uneducated masses were buying into Heart’s promises, Heart’s other project, Hex, was engaging in massive sell-offs and sending its own liquidity plummeting.

If that sounds sketchy it’s because it extremely is.

But like the Ponzis and Barnums of yore, Heart made this all work for him by developing a cult of personality online.

Tophats. Weird magic shows. Lamborghinis. Frequently wearing gold and lavish jewelry purchased with funds from naive investors. Somehow this was enough for many users to put aside common sense, ignore several SEC subpoenas, and the warnings of their colleagues in crypto that this was all a big scam.

And in a situation like this, it would be in Heart’s best interest if PulseChain never launched. He could keep making false promises and raking in investor dollars in perpetuity.

So, it will come as no surprise to you, that when PulseChain did launch it was a massive flop, simultaneously crashing Hex.

Now, we provide you with this horror story so that this can be an educational tale for all of us.

Don’t be drawn in by carnival barkers like Richard Heart, when you hear about a new crypto, you need to consider its function, its utility, and ultimately, whether or not it’s a bunch of nonsense.

This isn’t a new lesson, but if something sounds too good to be true, it probably is.

Now, go forth into crypto a little more cautious, cagier, and a little wiser.

And this last bit of sage advice we’re going to impart isn’t just good for crypto, it’s good for life.

Never, never, trust a man in a tophat.

Meme of the Day

Crypto 101

Smart Contracts: These are self-executing agreements written into codes that are activated when certain conditions are met.

Smart Contracts are one of the foundational features of crypto and Web3. You hear a lot about users validating and authenticating other users and transactions in decentralized finance.

But Smart Contracts are the easy part. This is the area of the tech that occurs automatically in DeFi.

It’s one of the most important, but generally invisible features of the space. But like the wind or love, just because you can’t see it doesn’t mean it’s not there!

The Last Sip

Here are the three funniest things that were found when police raided Danny Devan, Tik-Toker and crypto fraud’s $1.3 million McMansion in Potomac, Maryland.

And yes, that six-bedroom house was, of course, purchased with an illegal loan.

Also here’s a pro-tip. If the interior of your McMansion looks just like Saul Goodman’s, your crimes may not be as subtle as you think they are.

1. $17,000 in cash in a closet.

2. 18 other peoples’ drivers licenses.

3. An actual “Bitcoin” made out of solid, 18-carat gold.

Stay Caffeinated,

Coffee & Crypto Team

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

MASTERWORKS DISCLAIMER: “Net Return" refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the date the sale is consummated. IRR may not be indicative of Masterworks paintings not yet sold and past performance is not indicative of future results. See important Regulation A disclosures at masterworks.com/cd.