Two new documentaries have renewed the public’s fascination with the Fyre Festival, a planned 2017 music event that unwound disastrously and, in the end, turned out to be a giant fraud. I wrote about the event at the time, but the new movies—one from Hulu, and one from Netflix—have revealed dozens of incredible behind-the-scenes details about exactly how things went so wrong. (For what it’s worth, consensus among BREAKER staff is that the Netflix version of the story, Fyre: The Greatest Party That Never Happened, is a much better watch.)

Those details, in ways large and small, show that the Fyre Festival bore an incredible, even uncanny resemblance to the crypto scams that cost would-be investors billions of dollars in 2017. In fact, as the hosts of the excellent Coin Talk podcast recently pointed out, mastermind Billy McFarland would have been an amazing ICO schemer if he’d gone into crypto instead of entertainment.

It also makes him and his story an invaluable object lesson for would-be investors interested in detecting future frauds. Here are the key lessons to be learned from the tropical disaster.

Buy the Steak, Not the Sizzle

The first most people heard of Fyre Festival was through a brilliantly-orchestrated social media campaign. Dozens of top influencers like Kendall Jenner were recruited to tease the event on Instagram and other platforms, framing it as a weekend of luxurious extravagance. Some were paid tens of thousands of dollars, but didn’t specify that they were running ads, and what seemed like personal endorsements were based on effectively zero knowledge of what they were promoting.

The event’s reality turned out to be much different from the hype–less caviar dream, more sandwich on styrofoam. When the ugly truth came out, the influencers themselves faced legal action. If that all sounds familiar, it’s because ICO scams used nearly identical tactics: Figures like DJ Khaled and Floyd Mayweather were paid handsomely to flog crypto frauds like Centra. They, too, knew effectively nothing about the product they were paid to promote, and wound up paying huge fines to the SEC.

The lesson here is pretty clear: social media claims and hype are nothing to base an investment on, whether you’re putting money into concert tickets or technology.

Buy Equity, Not Carnival Tickets

Easily the most hilariously crypto-like incident in the Fyre saga was McFarland’s evil-genius decision to build an RFID wristband system for payments during the event. A few weeks before the supposed start date, his team sent notices to attendees, encouraging them to ‘load’ their wristbands with thousands of dollars. This gave the organizers a badly-needed infusion of millions of (real) dollars, at least in theory to help them build the event they had already sold.

Collecting money to fund something you haven’t built yet is a completely legitimate tactic for building a business—it’s called investing. When you buy a stock or otherwise help fund a company, you effectively get a share of a company’s future success. But goading people into trading dollars for an in-house currency only spendable on products that don’t exist yet is considerably sketchier, because it’s not an investment, just a future option to buy. It’s also the fundamental proposition of most ICOs, which claim their token will rise in value because of demand to spend it. This “utility token” thesis is increasingly in question, and should be regarded with serious skepticism by long-term investors.

Don’t Back Leaders Who Believe Their Own Hype

Fyre organizer Billy McFarland was undoubtedly a liar, and wound up facing prosecution for comically inflating his and his company’s finances. But he appears to have been a very special kind of liar—the kind who actually believes his own lies. Fyre repeatedly shows McFarland simply ignoring inconvenient realities, like the fact there weren’t enough tents for festival attendees, or that RFID (see the bracelets above) wouldn’t actually have worked at the event site.

It’s hard to spot this particular sort of pathology, particularly with long-horizon projects like blockchain. Even an honest CEO’s job includes spinning glittering visions of a distant future, helping keep investors committed long enough to actually bring those visions to fruition. As Rolling Stone’s Nicole James expertly diagnoses, the kind of reality-denying optimism that drove McFarland right into a ditch is straight of the tech-leadership playbook. A boundless belief in your own, unique approach to changing the world increases your willingness to pummel both opponents and critical voices into the ground, what James calls “tyrannous positivity.”

Of course, from Uber to Facebook, tyrannous positivity can fuel huge successes—but delusion is a different beast. One way to distinguish even toxic optimism from pure fantasizing is how leaders deal with criticism and obstacles. Good leaders acknowledge mistakes and respond to criticism in detail. That’s a good early signal that they’ll be willing to correct course when they make mistakes. Facebook is only weathering its own failure to face reality because it already has immense weight to throw around. McFarland, like most blockchain startups, is no Facebook, and when he simply ignored the oncoming roadblocks, he crashed into them at full speed.

Get Into Projects That Let Everyone Win

The entire Fyre narrative is so magnetic because it’s drenched in schadenfreude – these are mostly people whose suffering you don’t feel bad about enjoying. The organizers themselves, of course, are charlatans, hacks, and criminals, and their failure and shaming is righteous. The most obvious victims, the festival attendees, seem mostly to be both immensely privileged and hilariously gullible—the fact that they’re suddenly slapped with a dose of unfiltered reality feels not only just, but maybe even healthy for them.

But the Netflix Fyre documentary is excellent in part because it pushes past those obvious players, and shines a light on the real victims—the workers and business owners who got ripped off by Billy McFarland in the course of running his scam. One Bahamian restaurateur gives a particularly wrenching monologue about having to use $50,000 of her own hard-earned savings to pay workers after the Fyre team walked off without paying its bills.

Any project willing to treat the people working for it that poorly isn’t likely to treat investors any better.

Don’t Expect Anyone To Compensate You For Being Gullible—or Punish the Guilty

One remarkable thing about the Fyre Festival postmortems is the willing involvement of many of Billy McFarland’s staffers and officers, who talk about what happened in such grimly enjoyable detail. Some of these people recount how they tried to convince McFarland to face reality, while others were effectively accomplices in his doomed effort. But so far, it seems McFarland himself is the only one likely to face any real punishment.

That’s very likely to be the story that plays out as various ICOs wind down—leaders may be punished, but plenty of enablers will be untouched. That also means recourse for nominal victims could be very limited: Fyre’s investors, contractors, and would-be attendees have all been left holding big, fat bags of nothing. That’s partly because there doesn’t seem to be any money left, but also because (aside from McFarland’s financial deceptions), the law seems to have regarded Fyre as a failed venture rather than an outright fraud.

ICOs will continue to face punishment for violating securities law. In a few cases, settlements have compensated investors to at least some degree. But in many more cases, aside from their means of fundraising, these efforts will be treated not as frauds at all, but simply as failed businesses. And when you invest in a failed business, you’re on your own.

So tread carefully, and keep an eye out for the Billy McFarlands of the world.