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- [00:00]
A
The piece opens with me saying, oh, my God. Oh, my God. I'm a pretty reserved person, but that was like a genuine reaction. Like, it was very unsettling to see my own face on somebody else's body. Hello, and welcome to the 404 Media podcast, where we bring you unparalleled access to hidden worlds, both online and IRL. 404 Media is a journalist found the company and needs your support. To subscribe, go to 404 Media Co, as well as bonus content every single week. Subscribers also get access to additional episodes where we respond to their best comments. Gain access to that content at 404 Media co. I'm your host, Joseph, and with me are two of the other 404 Media co founders, Sam Cole.
- [00:47]
B
Hey.
- [00:48]
A
And Jason Kebler.
- [00:50]
C
Good morning.
- [00:51]
A
So Emmanuel might join us for the second half, but this first one, Sam, do you want to take the lead on this story?
- [01:01]
B
Yeah. So this headline is. Hello, boss. Inside the Chinese Real Time deepfake Software Powering Scams around the World. Joe, this is a story that you've been working on quite a bit. It's pretty involved and involves experimentation, testing of software. It involves working in different languages. Always a real exciting moment when we get to publish a story like this because there are a lot of moving parts to it. So do you want to just start off with telling us about the software in question? What is it and what does it say that it'll do?
- [01:40]
A
Yeah. So this piece of software is called Halchin AI. And whereas video deepfakes used to be about superimposing somebody's face onto a static video, I mean, obviously when Sam first covered deepfakes all those years ago, it was, as we all know, putting a woman's face onto another piece of pornographic content. But that was a static video, right? And everybody has seen those a million, million times. Now this is something else, and that is promising to do a video deepfake in real time. So when you are in a video call on WhatsApp or Zoom or Microsoft Teams, something like that, and those are specific communication platforms that this piece of software can target, it will swap the user's face to somebody else entirely. And I mean, you. You edited this piece as well, Sam. And originally I put it as usually deepfakes used to be about celebrities, but now it's much more, I think, about anyone else, really, because you don't have to have thousands and thousands of photos or, you know, hours and hours of footage anymore. This is just based off a few photos. And I don't know that seems like a shift. We've covered the Nigerian stuff before where Nigerian scammers are also doing real time video deepfakes. But this is, I mean, I don't want to exaggerate it because maybe it's already slightly out of date, but compared to the other scammers, this is like a generational leap when it comes to real time deepfakes.
- [03:19]
B
I think that's right. I mean, I think something that struck me when I was reading this story and reading about the setup and we'll get into how you actually made it work, made the software work, but talking about how you needed all the specific hardware, you need pretty powerful hardware. You needed a gaming PC, which we mentioned you borrowed the use of Emmanuel as a manual, used his PC to test some stuff and he has a beefy gaming PC famously. And that's, I mean, it threw me back to like before deep fakes became so easy to make with apps and before the software got really, the technology got really good to the point where you could just use one person's photo and you could take a picture off of somebody's Instagram and make a deep fake with it. This is like, it's almost back to the way that it was before, or maybe it never, never left. But needing all that powerful software and powerful hardware specifically to make something real time, I think is interesting. And I wonder if we'll get, if it'll take the same trajectory where you need all this right now, but eventually we'll be able to do deep fakes on an app in real time live. I'm sure that's probably already something that exists in a worse, less realistic way, but this was pretty realistic, which we'll get into. But yeah, I mean, I'd love to hear first just how you heard about this because it's not something that's, you know, like in the App Store, for example.
- [04:44]
A
Yeah, so a couple of different ways. I have been increasingly looking at the Chinese language markets on Telegram. I remember, you know, back in the day of covering the Dark Web, which would be Tor hidden services on the Tor anonymity network. People always talking about, oh, oh, there's human trafficking there and you can buy all of this sort of stuff. And obviously a lot of stuff was sold in the Dark Web. You have Silk Road for drugs, weapons occasionally, although a lot of those turned out to be, you know, informants and that sort of thing. You go into these Chinese language networks on Telegram and you can just get everything what they describe as quote unquote, high end escorts or Sex workers, malware stuff for chaining people up and that sort of thing. And that's because these are very much linked to the Southeast Asian scam compounds where Chinese organized crime are kidnapping or luring people over to then work in these places. So I've been poking around that ecosystem anyway and how Qian came up through that way. But there's also been reporting from Wired where they did something, I think in December where they highlighted this, this specific app. And then there's a blog called I think Frank on Fraud. And like they've mentioned it as well. But that coverage to me still left a lot of questions which was that more they were saying this exists and it looks pretty powerful. And I totally agree with that. But we didn't know how it worked, how purchasing happens, what's the actual attractiveness of the software? So, so that's why I think I decided to go a step further and be like, well, let's actually get hold of this software and we can actually test it out and maybe we can learn more about it. And I mean, we definitely did by doing that.
- [06:36]
B
Yeah, it's always good to get your hands on something and actually confirm some of the claims that are going around. So what was that process like of actually buying it, setting it up, all that stuff?
- [06:50]
A
I mean, it was really long. So I'm using Telegram. I find Haochien AI's telegram contact, one of the actual ones earlier, has become inaccessible after Wired did some coverage. And I don't know whether that's because Telegram shut it down or Houchienai got spooked or something like that. But I reach out to them and I say, look, I'm interested in getting hold of this software. Please may I do it? And they ask, well, do you have a beefy gaming PC? And I say yes, because as you mentioned, the manual does have that. And then the conversations don't really go anywhere. Like, I don't know if it's that they could tell I wasn't a Chinese speaker. I'm using Google Translate and Telegram's translation feature here to do these conversations. So maybe they were just like, well, this is obviously not somebody part of our ecosystem, so I don't want to talk to them. I don't know. But like the communication kind of fell off the cliff. Then something changed in March where they finally started getting a quite bit more responsive. And they were saying, okay, you say you have a beefy gaming PC, show us a screenshot of the memory available in the task manager or the processor or approve to us that you have the graphics cards necessary to do this. So I'm getting a manual to take screenshots of his system as requested. He sends them to me. I then send them to hq. At some point we're all in a group chat together. Emmanuel is just being quiet and sort of there for archiving purposes. I'm the one leading the conversation. But it's a lot of talking until eventually it seems they are convinced and they're like, okay, let's go to the next step. They create another dedicated group chat and they say, come in and ask me to join. I think Emmanuel drops out at this point maybe, or maybe he's still part of it. But we go into here and then that's when the Hyenai people actually send the files over to us.
- [08:59]
B
Yeah, and then this is the point where it gets real and it's, you know, it's game on at this point. And they, at some point they wanted to actually remote into someone's computer, so into one what they thought was your computer. But really we're talking about Emmanuel's computer. And obviously remoting into someone's computer is pretty, you should trust that person. It's pretty invasive. You know, it's like that should be either your company's IT department or like someone you highly trust and not like a scammer that you have a language barrier with. So at that point, what do we do, you guys? You called backup at this point? Basically, yeah.
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A
As journalists who handle sensitive of stuff every single day, we don't want a criminal adjacent group remoting into our computers. I mean, we're trying to actively avoid that every day normally. And then we're not going to just like lay the doormat or the red carpet out for these people to come in. Like, who knows what they're going to do? Are they going to steal information? Are they going to deploy an info stealer? Like, who knows? So I contacted Get Real Security. They obviously do a ton of stuff around deepfakes and they research this sort of stuff. And Tom Cross there was kind enough to let us try it on one of his laptops. So I download the software, I think I send it to Tom. He then gets it all ready on his side. But as you said, Houthian AI, they don't want you to install it. I actually said like, hey, just give me instructions and we'll figure it out. And they insisted. No, no, no, we, we remote into the computer and we do it. And that is part of the attraction here, right, is that you don't need to be a technical or a technically minded fraudster to be able to do this. Now the entire point is that how chain AI is going to remote in and they're going to install it and they're going to get you up and running and have a real time video deepfake on WhatsApp or whatever in a few minutes. So they do that and Tom watches in real time as they do a bunch of stuff and I think it was pretty interesting. They download WinRar, the very important piece of software.
- [11:14]
B
Tom not having WinRar is really funny.
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A
Yeah, nobody.
- [11:17]
B
It's probably a clean, clean build, I
- [11:19]
A
assume, but yeah, yes, I presume a clean os, but downloads that. They type in the passwords of the files. Like we couldn't just do decrypt the files, they were password locked. So they do that. They make a different partition on the hard drive, they install the software there. They make a bunch of tweaks to a version of Windows Defender which was bundled with the software, like turning off the firewall. Some other stuff as well. They download some specific drivers from Nvidia. Now I don't know whether they were downloading specific drivers that work better with HI and AI or whether they were downloading them specific for the graphics card on Tom's computer. I don't know exactly why they downloaded those, but there were some very specific drivers. Apparently they do all that and at the same time they're messaging me on Telegram saying hey, please give us a privilege escalation. There's a little green button that comes up where it's like, oh, you can give the person remoting in more, more access and more privileged access to your machine. So they do that. Finally they install Telegram and they say, hey, okay, we're done log in and we're going to show you how the software works. I didn't log in at that point. Instead they called me and then they demoed the software a bit.
- [12:44]
B
The folks at Getreal called you?
- [12:46]
A
No, the technician at How Chien called me and there's a video in the piece and it's an Asian guy sat on Telegram in front of a camera, but I never see his face. He deep fakes into Andy Lau, an actor from Hong Kong. Then a bunch of other people, like three or four different faces I think. And at no point do I see the real face of the Hao Qian AI's technician is what they call it. And I don't know, there was something weird in that, in that I'm sat here and on the other side of the world. This person is demonstrating it to me in real time. And the other demos we've seen are pretty damn good. Again, they're in the articles as one where a woman turns into Gal Gadot and I think it's very, very convincing. But that is a pre recorded demo. Obviously this was live. And I'm more convinced it was live because the guy was typing to me on Telegram at the time saying, hey, I'm going to change the size of my lips now. I'm going to change the contours of my jaw now. And that was a particularly impressive demo as well. But then we, we finally had the software ourselves and you get a day to try it for free and then you have to pay and you also have to pay money to make your own model. And I think the price was $2,000 for a yearly subscription and about 500 for a model. So this is an expensive piece of technology. And like often we do buy software or tools, if that is part of the story, you know, years and years ago where I paid a bounty hunter $300 to geolocate a phone because the entire point of the story was to see if we could buy it. Right. It's the same thing here. I think personally, this is like the borderline of cost though. Like, this is the most expensive sort of experiment I've ever done. I don't think I would go over this. This is like, okay, that's enough now. You know what I mean? But the point was, are they going to sell this to somebody who is not part of the Chinese crime ecosystem? And clearly they did because we got it.
- [15:03]
B
Yeah, yeah. And you had the free trial so you could cancel it anyway.
- [15:06]
A
Yeah, yeah, yeah. Well, the free trial was just like, oh, you can turn into Elon Musk or something. He's like, sure, whatever. I wanted to turn into. Well, I wanted to get someone to get real security to turn into me.
- [15:16]
B
Yeah, yeah, yeah, so you did that. You, you went through that process and actually did a bunch of these tests with the Get Real folks. And you also, I mean, just to go back to what you just said, it's like the Elon Musk Musk ones. He. You very disturbingly said that the Elon Musk models, their faces looked dewy.
- [15:38]
A
Yeah, there's this one. Yeah, there's this one Halcyon AI demo where it's a video, like a short clip of someone deep faking to Elon Musk and then into Jackie Chan and their skin just looks like moist and dewy. It's like very Reflective. And I look at it, I'm like, I mean, that almost looks too realistic. It's almost too good. I can tell it's AI in a weird sort of way.
- [16:05]
B
It's like Uncanny Valley.
- [16:06]
A
Right. But that wasn't the case in our test. So this first test that we did with Get Real, frankly, the results were not that good. So me and Tom have very different shaped heads. And the way the technology works is that it melds the two faces together, Right. So if the person sort of receiving the deepfake has a very different facial structure or shaped head to the deepfake that they're trying to impersonate, it's not going to look good. It looked like my face was like stretched across his, like almost like fucking Hannibal or some shit, I don't know. But like, it didn't really work. The lighting wasn't great either. He was in a hotel room. I think the laptop maybe wasn't plugged in for a bit, so it was running off battery and there was also WI fi. Right. But that was very, very interesting in that. Oh, it's not like magic out of the box. Like you actually have to work for this a bit and you have to configure it and you actually have to figure out, okay, I have this software, how am I going to make it more effective? Yeah, yeah.
- [17:18]
B
I mean, it's kind of like with the, the. You remember the Tom Cruise deepfake years ago, it's like 20, 21. And they, they literally just used a Tom Cruise lookalike like an impersonator because it was easier with the software. I don't think that Tom is a Joseph Cox look alike, but it makes it easier when the actual, like the, the person looks or is, has the same like head shape as the, the person you're trying to replicate. I mean, people do this. That's what they were doing with the original deepfakes too, is like those existed in a community where people were finding doppelgangers of porn stars. So they were like, oh, this woman looks like this porn star. And then they use those types of comparisons to actually make the deepfakes that they ended up making. So that makes a lot of sense. So yeah. Did they, did they say at all, like, what, what sort of scams we're talking about here? Do you know what the scams are that people might be at risk with this stuff? I mean, we know that like financial scams and romance scams have been around for a long time, but obviously the deepfakes element adds something of A higher level of, I don't know, like, tricking people to this. So, yeah, what are. What are we talking about when we're talking about scams?
- [18:33]
A
Yeah, I'll get to that in a second. I'll just add that the second test we did was much better. I did that then with somebody else, Ian McGrew, who was also from Get Real. And exactly as you were saying, the shape of his face is closer to mine, so it looked way, way better. And the piece opens with me saying, oh, my God. Oh, my God. And I'm a pretty reserved person. But that was a genuine reaction. Like, it was very unsettling to see my own face on somebody else's body. Like, there is something visceral about that. And that was a way, way better test that was still on public WI fi. It was still on this laptop, but it was on a different subject. But Ian's face actually looks nothing like mine. Like, our noses are not the same, our eyes are completely different, our mouth as well, but my face was on him. And he pinched his cheek and he stroked his chin and he covered his eye. And for the most part during those tests, it didn't break the illusion. There were some limitations where. So you can swipe across your face like this with one solid hand across, and it doesn't break the illusion if you start to open your fingers. The software doesn't like that. And it's pretty probably because it's obviously in its eye. It's like multiple objects rather than one solid one. And that can make the deepfake's eyes bulge and distort and warp. So it's very interesting to see those limitations as well. But overall, I feel it was a pretty convincing result, even if it wasn't as sort of pristine as the Gal Gadot ones, which were probably done in a perfect environment. They're trying to sell the software. But to answer your question, this is sort of the hard bit, because when Wired has covered it before and researchers have looked into it, they've looked at sort of the earlier comments of hi and AI and, you know, they market it to scammers, right? And then you go to hi AI and they're like, no, no, it's not for that. Or they just deny it, or they just don't reply or whatever. Right. The really interesting one in our piece is that when I was talking to them and they were asking, what software do you want to inject this into? Or what communications platform? And, you know, I said, zoom. I said WhatsApp. And I think a Couple of others as well. When I said WhatsApp, they sent over the instructions on how to do that. And it's basically by acting as a virtual camera. Like you trick WhatsApp, you just select the camera from the dropdown menu and it's kind of just like injecting obs, essentially. They send a screenshot of a WhatsApp video chat showing how to do this. And very, very clearly there is the logo of the Washington D.C. metropolitan Police Department. Now why on earth would you want to pretend to be the Metropolitan Police Department unless you're a scammer, right? So they kind of played their hand there by he admit it basically by showing that, oh yeah, you can use this do pretend to be a police department. And for those who don't know, like some of these scam compounds in Burma, Myanmar and Cambodia and I think Thailand as well, they will sometimes build these incredibly elaborate sets to make it look like they're from the police. So they'll have a logo in the background, they'll be in correct uniforms, they'll have like a whole office that they're filming as part of the scam. So very, very interesting that the people selling the real time video deepfake software are like, oh yeah, you can use it to impersonate police as well.
- [22:22]
B
So, so crazy. So I mean I like, I guess just for a second I want to go back to what you said about like seeing your own face on somebody else's face. It is such a weird feeling. It's a really weird feeling. Have you ever tried to put yourself in a deep fake, Jason?
- [22:37]
C
Yeah, I mean I've just used like very like off the shelf tools. They have not been very good. I think the thing I was going to say, and Joseph alluded to this a little bit, is that the type of result that Joseph has gotten is the type of thing that I see all the time with Instagram influencers with pre recorded videos, as Joseph said, where it's just like a random dude who has turned themselves into like their AI avatar and things like that. And I think while this was very expensive and quite difficult to do, they are working on making this technology more widely available using open source AI, using off the shelf tools. I think that the live aspect of this is very important, but I think that what we've seen with this technology over and over and over again is that it becomes cheaper, faster, easier. And I think that we are moving toward a space where this is going to be like a lot more accessible, especially in this like influencer space, because I know that there's a lot of like, bros who are trying to do this for like OnlyFans and live streaming and things like that. So, like video chats and things like that. So I think this is like a preview of what to come very soon.
- [23:59]
B
Yeah, for sure. Yeah. I mean, it's definitely, it's. This is all going to be, I would say, very soon. You know, something you can get off the App store, which, as we've found over and over, the app stores and the companies hosting this stuff are not prepared for how to deal with it at all. So, Joe, what do you think this means just like in a bigger picture for how scams are working in the future, in the near future, how they're happening today? We went over a little bit about, I mean, the OnlyFans stuff is absolutely a scam. The AI Babes market is definitely just guys using this sort of technology. So. Yeah, I mean, how do you see this actually defrauding people? I guess.
- [24:43]
A
Yeah. I mean, I think it's exactly what Jason said in that this technology right now is mostly with the Chinese language ecosystem and they're already doing billions upon billions of dollars worth of scams and crime. Right. And that's the horrible term pig butchering that I think some people are trying to get rid of. But it's probably still useful at the moment because when you say it, I think the public kind of understands it because they've learned that term. So whatever about that one. But that's where, you know, you'll target someone with a fake investment scam and tell them, hey, if you give your money here, you'll 10x whatever you put in. And they do that. But it's actually a fake app run by the scam compounds and they steal all of your money. Romance scams, obviously, like the Nigerian scammers do that, but then also the Chinese language ones do as well. So that's obviously going to apply here. Virtual kidnapping, which is this phenomenon where someone pretends that they've kidnapped your daughter or something and they'll send a voice memo that sounds kind of like her or a phone call or whatever and they're absolutely fine. They haven't actually been kidnapped. But there's a sense of urgency where you have to send some money now. And I think AI is actually already being used for that sort of of thing already. But the main thing is that it's going to get basically more accessible. Yes, it will get cheaper eventually. But the real thing here that I was, the main takeaway I had was just how sophisticated the technical support is where you can be an absolute dumbass now, and you can just buy this software and you can use it. And now you still have to go scam people. You still have to figure out how to defraud them. But you don't have to know the first thing about deepfakes to do this now. Exactly as you were saying earlier, Sam, it sort of normalized and streamlined for static video. It's starting to get that for real time. And that opens up the possibility and the avenue for way more people to use this sort of technology in their scams and their fraud. You used to have to be pretty sophisticated. You don't now. And if you can talk to a guy through Google Translate and send the cryptocurrency, you can apparently get this as well. Yeah, awesome. Yeah. Well, yeah, great, Great times. Well, let's leave that there. And when we come back after the break, we're going to talk about the wild world of Yu Gi oh, trading cards and the particular story around that. All right, we'll be right back after.
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C
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- [32:50]
A
All right, and we are back, and we've been joined by Matthew Galt. The headline for this one that Matthew wrote is, man finds $1 million worth of yu Gi oh cards in a dumpster. I'm going to read the lead out so people know where we're going because, like, there's a. There's a lot going on.
- [33:09]
D
There's a lot going on.
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A
There's a lot going on. So. And I just want to show people the final destination so they know where we're going in a way. But the lead reads, for the past month, the story of a man who discovered almost a million dollars worth of rare trading cards in the Texas dumpster has in fraud a niche subset of the Yu Gi oh trading card community. And I'll just say, like, it talks about the economics of that trading car community, the legal risks of it, the drama around it, sort of the prestige of finding cars like this, and then just some insane stuff that happens along the way. But I think let's do it chronologically. So this starts with some ebay listings in March, or maybe just one listing. What were they for exactly.
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D
So there were a couple. March 23rd, there's a couple of ebay listings for a rare uncut sheet of Blue Eyes, Silver Dragon Yu Gi oh cards. So it's important to know what an uncut sheet is first of all. So when like Magic the Gathering cards or Pokemon cards or Yu Gi oh cards are made, they come in like a giant uncut sheet. You know, this big huge piece of paper or cardboard that has all of the cards on them. This go through the printer and the printer cuts them. Sometimes those uncut sheets, they get out of the factory for whatever reason. Either they're thrown away, or someone that works in the factory gets them out, or the company that's having them printed sets a few aside for whatever reason. And those uncut sheets are enormous collector's items they auction off for thousands of dollars. And that is every trading card community looks for uncut sheets. It's a very rare commodity. So seeing these, you know, get listed on ebay and they were listed very cheaply. I think the this Blue Eyes Silver Dragon sheet was only like a thousand dollars and it could sell for 10 times that. Probably.
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A
Right. Gotcha.
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D
So a man named Nick, or a man that we're calling Nick, who requested that we call him Nick, buys this uncut sheet, he's like, for $1,000. Maybe this is a scam ebay listing, but I'll find out. It's fine. He gets the cards, they show up. It's not exactly what was listed. They were misattributed. But it's still a worthy sheet that he gets in the mail. But it's damaged. It's not as it was shown on the ebay listing. His interactions with the seller are very strange.
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A
Strange how so?
- [35:54]
D
They're erratic. You'll message him and you may not get a reply back for like 24 hours. The his communication goes from being very patchy and strange and like the grammar is very off and odd. And then the grammar is very clean for like two or three hours in the day and everything's completely normal and fine. And then like, there'll be a mood swing and a shift and just can be non responsive. And then there'll be like a period where he's very responsive very quickly. But Nick is talking to the seller and says like, hey, do you have. What else do you have?
- [36:37]
A
Well, before we get to that, let me just ask. So he's bought this sheet, this person called Nick. It has arrived. A little bit odd. It's not quite what was advertised. Do you know what Nick is thinking at this point, as in, well, where did this come from? What does he suspect at that time?
- [36:57]
D
At that time, Nick is thinking, normally when you see legit is maybe the wrong word. When you see sanctioned uncut sheets on the market, they're usually three by three. Konami, who is the people that run Yu Gi. Oh, in the way, like Nintendo runs Pokemon, actually give them out as awards at tournaments and usually see them in these small sizes. To see these large uncut sheets, it's not normally. Not very, not very common. And if they're on the market, it is typically because someone who works at a factory maybe has stolen them or something like that. They're usually what you might call like gray market or like illegal sheets. So Nick is now like the quality, the quality that it's in and has gotten the sheet and like, his interactions with the guys, like, are these stolen? These might be stolen sheets. And if I'm like taking stolen merchandise, am I liable for that? And so, like a whole bunch of legal considerations are kind of going through his mind. He's like, is this worth pursuing? Am I going to get in trouble? And that's kind of where Nick's at when he gets this first shipment.
- [38:04]
A
Yes. And then as you say, Nick messages the seller to be like, well, do you have any others? Like, I mean, maybe it's just to ask, maybe it's actually to buy. And we'll get that in a second. But what does the seller say when Nick asks, hey, do you have any more?
- [38:20]
D
He says, I have hundreds of uncut sheets. To which Nick says, no, there's no way you have hundreds of uncut sheets. Show me a video of the uncut sheets. And the seller obliges and takes a video which has been posted in the Facebook group. And I have seen and you can see, and it's this gentleman's hand just running through a big stack of uncut sheets, which like tens of thousands of dollars just there.
- [38:53]
A
Right?
- [38:54]
C
I like that. That's a cool video.
- [38:57]
D
It is a good video.
- [38:58]
A
But if sometimes a single sheet can be like 10k or something, right? Depending, obviously. And it has tons and tons of them. Is this the point where the calculation comes in? This is like a million at this point.
- [39:14]
D
Yeah. So I spoke to Nick and obviously this is like back of the napkin math and like markets change and shift. But he was looking at the sheets and, like doing the math in his head and he's like, you know, if I spent three years sitting on this and slowly dripping this out, I could get like, $800,000. A million dollars.
- [39:36]
A
By. By selling them over time.
- [39:38]
D
By selling them over time. That's like how much this is worth. And that's just. There's more videos that come later. It looks like he's even got more cards. And for the seller has more cards and things that are not just Yu Gi oh, there's Minecraft cards, there's basketball cards. There's a lot. It's not just these Yu Gi oh cards.
- [39:59]
A
Gotcha.
- [40:01]
D
It's a lot of money. A lot of money.
- [40:03]
A
So does that change the vibe at all for Nick and I should. You sort of hinted at it by saying the Facebook group. But this is no longer sort of a private conversation now, like with this video posted to Facebook, the sort of wider collector community is talking about this. Right? Like, what's their reaction to all of this?
- [40:23]
D
So Nick makes a couple of videos and puts them in a group that he runs called Uncut Sheet Collectors on Facebook. So it's like a niche community of people that just chase uncut sheets primarily for Yu Gi oh. But also a lot of other things. And he's just like, hey, I know a lot of people have been talking to this gentleman. Just, you know, I received my cards. This is the condition they were in. But here are his ebay listings. He's a little erratic. Just be careful. And then he posts another update. When they see the. When he's shown the video of the hundreds of sheets and the community speculation is kind of all over the place. A lot of people are assuming that these are stolen sheets. People are also. But people are also messaging the seller, being like, you know, I can I get these sheets? What do you want? What do you want for all of them? And you know, and they're also communicating what their experiences with this gentleman have been like. Did they receive what they ordered? What kind of, what quality did it come in? What were their interactions like? They're posting their private conversations with him. And every. He's just kind of coming a character. Character within this Facebook group. They're like, they're. They're. Another gentleman in the group is like clipping all of these interactions and making videos and putting an AI generated song on top of it. That's like explaining the lore of what's going on. Yeah, it's like kind of consumes them for a month.
- [41:52]
A
Big time drama.
- [41:53]
D
Big time drama. Big time.
- [41:55]
C
This is like one of my favorite types of drama. And this happens every now and then in different types of communities. But I feel like, especially in trading card communities, like every now and then someone will be like, in a Pokemon. I mean, Pokemon is such a big phenomenon, but it'll be like, oh my God, a new first edition Charizard has been discovered in the shoe box in someone's like, storage unit. Like, that happens from time to time. There is like every now and then, like, if, if you're into like rare, it'll be like, oh, this like camera. Like 50 cameras have been discovered in a storage. It's usually in a storage unit or in a dumpster or like a store going out of business. And there's always like skepticism about where it has come from. And I like that in this case it was like literally from a dumpster.
- [42:46]
A
Well, let's get to that. So everybody's speculating where they came from, that sort of thing. Obviously we've mentioned the dumpster in the headline and the lead. What is the seller actually saying about where these came from and why do we say it's a dumpster? Is that like, just based on what he said? Like, what's the deal there? And so where did he get these cards?
- [43:06]
D
So I, the, the provenance of the cards is a little bit unknown, but there's a lot. I will say there's a lot of evidence pointing in one direction. The seller claimed, you know, people are accusing him of stealing these cards and he says, I got them in a dumpster. And that's kind of his repeated claim over and over again in multiple videos and multiple posts that he found these cards in a dumpster. So what is the evidence that supports this? He lives near a. He lives in a suburb of Dallas that is near a printing factory that handles the Yu Gi oh account. So there, there is a print. The printing factory called Cardamundi that prints the Yu Gi oh cards. That is in Dallas. His mother, which we'll get into later, owns a scrapping business which is like literally, you know, they, they do like recycling, processing and like dumpster diving. The seller has a, a tick tock account where he is shown dumpster diving before this. And there's, there's decent evidence pointing to. And I had a conversation with someone who knows him who also confirmed that they were found in a, like a dumpster of a shopping center near but away from the Cardamundi plant, which is also like in itself very strange. But like all of that stuff points to probably actually found this stuff in a dumpster. Like, stranger things have happened. It's such a massive amount of cards to like smuggle out or steal from a factory. There's no indication that he works there or like has any like connections with the factory. Right.
- [45:04]
C
So can I ask a question about that? Sorry, I mean, aren't a lot of these cards like quite old as well?
- [45:10]
D
Yes.
- [45:13]
C
Even if it was from a factory, like they wouldn't be printing them recently. I guess they could be like in a closet somewhere or something. But.
- [45:20]
D
Yeah, no, that's a good point. A lot of this stuff are from older sets. I think the quarter century rare stuff, which is like a 25 year reprint, is like not super new. Some of these are old foils. So like it's not what it looks like is a bunch of misprints and old stuff that maybe had sitting around and they just had to dump. And I don't know if their dumpster was full or how they ended up in a, in a dumpster that is not controlled by them, but it looks like they did and now they're out in the world.
- [45:52]
A
Gotcha. So as you mentioned, Konami like runs Yu Gi. Oh, in the same way Nintendo sort of, well, obviously owns Pokemon, et cetera, et cetera, and controls it. Konami can't be like super happy about this. What has that company said about what's going on? And sort of how do they get involved?
- [46:13]
D
So I've tried to. That's another thing that people have been speculating about in the community is like, Konami is going to send their guys after you, you're in trouble, et cetera, et cetera. I attempted to contact Konami in several different ways. The only thing I got back from them is that the sale of uncut sheets is not allowed. It was like they're one sentence statement not allowed.
- [46:36]
A
They just say that, yes,
- [46:40]
D
the sale of uncut sheets is not allowed. That is literally quote, that was the only sentence they sentenced.
- [46:46]
A
That's not the same as illegal. That's not the same as authorized or unauthorized. They're just crossing their arms being like, this is not allowed.
- [46:54]
D
Right. So it's kind of funny because this is another thing where they exert pressure in other ways to make sure that the uncut sheet market is regulated. I kind of use two examples to explain this in the story. One is Magic the Gathering, which is not Konami, but it's indicative of how these companies operate. A YouTuber got boxes of an unreleased Magic the Gathering expansion and like talked about it in a video. And Wizards of the coast, who, who runs Magic the Gathering, sent the Pinkertons after him. Literally. The Pinkerton Detective Agency knocked on the guy's door and they were Private investigators and the YouTuber, like, said, I'm sorry and turned over the boxes and that was the end of it. There was an instance earlier this year of a gentleman in Ohio that runs a brick and mortar order card store and received, like, a shipment of Yu Gi oh cards. And as, like, packaging, there were uncut, like, print test sheets of Yu Gi oh cards, like, stuffed between the boxes. And he takes them out and he's like, oh, this is amazing. Assumes that they are abandoned property. Starts posting on the Internet, like, I would like to say, sell these. Konami contacts him through the, like, rep that, that deals with the store and says, hey, we would like those back. Now. The threat is like, if you're a brick and border store and you do a brisk trade in Yu Gi oh, there's official tournaments that run that bring in money and bring people to the store. They'll cut you off from that. They'll make it harder for you to buy boxes. Like, they have, like, levers that they can use against people that are in business with them. But if you are, if you just found something in a dumpster, like, it doesn't matter if you say the, the. The sale of uncut sheets is not allowed. Like, the seller's not running a store.
- [48:55]
A
Right.
- [48:55]
D
The seller doesn't need to do more business with Konami. Like, there's not. I don't see that there's a lot that they can do.
- [49:02]
A
Yeah, you know, yeah, that makes sense. I mean, we'll get to how this ends or how it's continuing. But just before that, the seller's mum gets involved.
- [49:14]
D
So they're talking about the seller a lot in this Facebook group and they're making fun of him. They're making the AI generated videos, but people are also buying the cards and talking about their experience. And then his mom shows up in the Facebook group and starts doing that. I don't know if it's kind of like a boomer Facebook style of post where they do the big, like, title card that almost looks like a PowerPoint slide, and it's big, bold letters. And she's doing that, defending him first. It's, you need to stop talking about him. You need to take down all of his private information and stop talking about his past. And to be clear, everything that they've talked about in the Facebook group is stuff that the seller himself had posted online. It's. I mean, there was a couple of, like, DMs, but there's nothing kind of about his past or nothing outside of stuff dealing with these Yu Gi. Oh, sheets. And then she makes another post. She's like, if y' all had found a bunch of stuff in a dumpster, wouldn't you try to sell it too? You know? Fair enough, fair enough. Mama seller.
- [50:42]
B
Yeah.
- [50:42]
A
And I mean. I mean, I know they're mocking him a little bit, but as you say, people are buying the cards. I haven't seen those messages, but it doesn't sound like people are like, mad at the guy or anything. They're all just super curious. At least that's what it sounds like to me.
- [50:56]
D
They are super curious. But I do think there is like a. There's like a small element of people assuming that Konami is going to get him in trouble or send the police after him or something like that. So it's this interesting mix of, like, people wanting the cards and buying the cards. Some people just think the whole thing is bizarre and, like, have kind of turned him into a character. And then there's other people that are like, you're going to get in trouble. Like, Konami's gonna get you, you know?
- [51:20]
A
Yeah. So how does this end? Or is it still ongoing?
- [51:26]
D
It's amusing you say that because I checked in right before we got on the call. So he'd been kind of dormant for a month. He'd been selling them through, like, doing raffles and like, TikTok lives and trying to sell them and had been kind of quiet for a while. And then when we're. We're preparing this story, there's a new post from him on his personal Facebook page and they're just like, I'm back in business. I got a bunch more cards. This gets screen capped. Shared in the Uncut Collectors Facebook group. He's back. He's got more to sell. And then I noticed there was another gentleman selling Uncut Magic the Gathering Sheets earlier today. And there's the seller in the comments. Fake, not real.
- [52:18]
A
But he doesn't know that. Is he just like jumping on the drama or something?
- [52:21]
D
I don't know. He had said a couple times in some of the other previous interactions because he would go in and fight people in the comments of these of their videos on the Uncut Sheets Collectors group that he was doing this for publicity. He's just trying to drive attention to himself. So I imagine that he's just trying to stir up drama to get more attention on the cards. But it's also wild because in his newest post on his personal Facebook page where he's trying to move cards, there's replies that are like, hey, check your DMs. I sent you a DM. What is this? You know, like, people are trying to buy them and it's still erratic and weird.
- [53:05]
A
Yeah, it's great.
- [53:07]
C
I am curious, like the, the. I mean, this is somewhat uninformed because I don't know very much about Yu Gi. Oh. But I. I do know a fair bit about Pokemon. I wrote many articles about Pokemon. I had lots of rare Pokemon cards. I sold them all on ebay. Like, very exciting. I don't understand how Konami can do anything to him. Really.
- [53:31]
D
I don't think. I don't think so either.
- [53:32]
C
And I don't. I don't really understand why this is like the big concern of the community. And. And like, I think Konami can send him like an angry letter or something, and if they can prove that he actually stole them from the factory, then sure, I guess. But like, these sorts of. As you mentioned, it's like these sorts of cards are sold all the time. Uncut sheets are sold all the time. I've been to card shops and seen uncut sheets in there. And it's like, yes, maybe they were acquired in a more straightforward way where they were given out as contest prizes and things like that. But like, there's no indication that they're counterfeit. There's no indication that they are like, I don't know if they were like mishandled and they just showed up somewhere. Like, it's. I feel like it's a probably a pretty big hurdle to jump here for this person to like, face consequences for this. And I think that maybe it adds some intrigue to. To what's going on. But like, I don't really understand kind of like why this would be such a concern for Konami. It's like more publicity for Yu Gi. Oh, it's. It's like exciting for the hobby. It's like, I. I don't know.
- [54:48]
D
I mean, well, it gets into. And this is like a. And I don't know what it's like for Pokemon, but I know that this is like a very touchy topic for Magic the Gathering. And Wizards of the coast is when you have a secondary market for your cards, how hard do you interact with, regulate, cater to that secondary market if you are the company printing the cards?
- [55:17]
B
Well.
- [55:17]
C
And how. How much can you. Because like, you're allowed to resell them and all this. And it's like, I. There's like in. In the Pokemon world, there are like lots and lots of promo cards that Wizards of the coast made. I know that Wizards of the coast doesn't make Pokemon anymore, but they used to make Pokemon. And there were tons and tons of promo cards that were given out at different events that were, like, prizes for winners of different tournaments at card shops, things like that. And it's like, nominally, the only way that people were supposed to get a hold of them was through winning a tournament at a card shop. And so there was, like, this whole series of. Of promo cards that. That had the, like, gold word winner stamped on them. And so, ideally, like, these were supposed to be quite rare, but they made thousands and thousands of them, actually, and they sent them to the card shops who were running these tournaments. And what was happening was the card shops would run tournaments or they would run fake tournaments where they pretended to give them out, and then the card shops would keep them, and then they would sell them on ebay. And it's like, how do you regulate this? I mean, it's. It's against the. Probably the terms of service for, like, the wholesale agreement, contract, and things like this. But if you're gonna send thousands of these cards out and then tell these cards and. And know that they're wildly valuable because you've created the scarcity for them, it's like. I mean, that I. It's not, like, a legal thing here, but it's like the statute of limitations on this. It's like, a lot of. For the Pokemon thing, like, a lot of these tournaments were held in the 90s or the early 2000s, and then we're two decades later, and suddenly hundreds and hundreds and hundreds of these cards have shown up, and it's like, oh, did you play in this tournament? Like, over and over and over again and win this, like, mewtwo card? That's rare? Like, how do you have 500 of them? Like, how does any one person have 500 of them? And it's like the way they have it is because they had, like, a wholesale contract, and the card shops were getting them. And then, like, that's what was happening. Like, and then they were being laundered, essentially, like, either through fake tournaments or these card shops were keeping them. And rather than giving these cards away, they're able to sell. They're able to get them graded, then they're able to sell them for hundreds or thousands of dollars each, depending on the grade. And it's like, I don't know. Is that bad? Like, it's not what's supposed to happen, but, like, when you talk about rare trading cards and all that, like, for sports, there's you know, like 1 of 1 cards and 10 of 10 cards and where the only like 10 copies of each card are made and it's printed on each individual card. And if you are going to make things like this and not literally limit the number that are being made, they are going to get out onto that market at some point.
- [58:32]
D
Yeah, this also hits it like kind of something we didn't talk about in the piece. But I talked to Nick and a couple of other people about that I thought was interesting. This is kind of not broken containment of the, of this group. There are like major Yu Gi oh like youtubers as far as I can tell. Like no one's talking about it, even though it's pretty juicy and strange. And one of the reasons why may be that if all of this stuff does end up on the open market, what happens to the value of all the sheets that you're sitting on? You know, if suddenly there's 500 more more uncut sheets out there? Like, do the uncut sheets that you have go down in value?
- [59:19]
C
I mean, yes, they do. Like if you flood the market with this stuff, then yes, they go down in value, but they often go down in value for a limited period of time for these sorts of things. And it's like these hobbies are a little bit cyclical, but both Yu Gi oh Pokemon and Magic the Gathering have proven to be like wildly enduring. And there was a period during COVID where the Pokemon market went nuts and like all the cards went like, became very valuable. And so then the market got like flooded. I use quote marks here because a lot of people who used to play Pokemon went to their parents closets and said, oh, like I have Pokemon cards. And so then there was like a lot more of them out there because it's not that these were like scarce or limited. It's that a lot of people had them lost interest, didn't know they were valuable, took them out of their childhood closets, myself included, and sold them on ebay. And so then eventually the market like crashed a little bit, I think with all, all these kind of like flooding the market. And now here we are like four years later, five years later. The prices are, are more than ever now because like Pokemon continues to get more popular. It's like the, that sort of like supply of cards did kind of make its way through the market. And then it's like, I don't know, it's just like that's kind of how collectibles work. It's like, okay, there's a, there's a bunch more on the market, the price goes down, but then over time, they become scarce again. And so, yeah, your uncut sheets, if you are sitting on a bunch of them, like, of Yu Gi oh might go down in price for the moment, but five years from now, like, are. Are there going to be a bunch circulating? Like, probably not. And that's not to say that these things can't just, like, fully crash out. Like, your Princess Dye Beanie Baby is worth, like, you know, less than a pair of socks. Like, you might as well wipe your ass with the Princess Dye Beanie Baby. Sorry, that's very rude to her memory. But, like, I remember people were like, buying these things and hoarding them like gold and being like, I'm gonna retire on this. And it's just like, they're worthless now. They're. They're really not worth very much money. My parents included. Like, we have, like, four Princess Dye Beanie Babies. We collected, like, everything growing up. Yeah. And it's just like, when my parents moved, we, like, gave all of our Beanie Babies to Goodwill because they're just not worth anything. And it's just like, that could easily happen to Yu Gi oh, that could hap. Probably won't happen to Pokemon. Probably won't happen to Magic the Gathering. Probably won't happen to Yu Gi oh either. But there's like, all sorts of hobbies where there is a cycle where it's like, okay, these things are super valuable. And then like, actually, wait, no one actually cares anymore. They're not popular anymore.
- [62:17]
A
Yeah, totally. Well, I hope we keep an eye on not just the Yu Gi oh drama, but trading cards drama in general. We'll leave that there for the moment. If you're listening to the free version of the podcast, I'll now play us out. But if you are a paying 404 media subscriber, we're going to talk about how the AI industry is causing a massive hard drive shortage, which in turn is now impacting the people who archive the Internet. Unfortunately, you can subscribe and gain access to that content at 404 Media co. As a reminder, 404 Media is Jonbus founded and supported by subscribers. If you do wish to subscribe to 404 Media and directly support our work, please go to 404 Media co. You'll get unlimited access to our articles and an ad free version of this podcast. You also get to listen to the subscribers only section where we talk about a bonus story each week. This podcast is produced by Alyssa Midcalf, another way to support us is by leaving a five star rating and review for the podcast. That stuff really does help us out. This has been 404 Media. We'll see you again next week.