Open-source development is an unconventional contract where firms can attract non-employees as inexpensive labor. Using task-level data from firms, I examine how the collapse of a crypto exchange in 2022 propagates through venture capital relationships to impose financial constraints on other non-crypto startups. Treated firms attract open-source developers as a substitute for hiring by growing employee headcount 6% more slowly, posting 15% more public projects, and relying on 10% more contributions from non-employees. Marginal contributors are of lower quality, generating spillovers: non-employees participate in open-source to signal their ability, but signaling-related outcomes for workers deteriorate as firms host more public projects.

We study a token-based platform where users choose between adopting the platform’s service and speculating on its native token. While both adopters and speculators earn the token’s capital gain, adopters also incur a participation cost to obtain a noisy service benefit enhanced by network effects. This tension between adoption and speculation can suppress participation, halt learning, and trigger collapse even when expected fundamentals are strong. We characterize the participation threshold, show how token-price volatility expands the collapse region, and identify the resulting learning traps. The model implies that inflation and adopter-targeted incentives support participation, whereas subsidies to speculators increase fragility.

Through blockchain addresses, we trace crypto flows and uncover methods commonly used by scammers to obfuscate their activities. The perpetrators interact freely with major crypto exchanges, sending over 98,000 small trust-building inducement payments annually to exchanges commonly used by U.S. and European investors. Funds exit the Ethereum network in large quantities, mostly in Tether, through less transparent but large exchanges. Criminal enterprises pay approximately 33 basis points in transaction fees and moved $27.8 billion annually into suspicious exchange deposit accounts between 2021-2023, including $5.6 billion annually sent from Western exchanges. Our findings highlight how many actors in the ‘‘reputable’’ crypto industry facilitate criminal capital flows.

We evaluate two major types of crypto enforcement actions: policies targeting services and policies targeting users. First, sanctions against the Tornado Cash mixer resulted in an 80.4% decline in hacker illicit inflows and shifted their usage toward more traceable swaps and bridges. Second, overseas exchange acceptance of illicit funds declines only after the U.S. DOJ settlements. Third, OFAC sanctions against individuals are relatively rare and often after the funds have left the wallets. Fourth, after Tether freezes, criminals continue to use related wallets. Overall, anti-money laundering policies targeting services like mixers and exchanges appear more effective than policies targeting users.