In the lobby of a mid-tier Palo Alto hotel in June 2000, PayPal cofounder and chief technology officer Max Levchin sat on an indoor fountain, getting ready to speak at a payments industry event. “This may be the last conference I’m going to speak at about PayPal, because I think we’re going to die,” he told his then-girlfriend (and now-wife) Nellie and PayPal advisor Scott Banister.

Fraud was decimating his fast-growing, 18-month-old startup. Criminals were creating fake seller accounts at PayPal, making bogus purchases with stolen credit cards and quickly funneling the money into bank accounts they controlled. At the peak of the crisis…

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