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The good, the bad and the shoddy – Cointelegraph Magazine



Cointelegraph By Andrew Fenton

Like most crypto journalists, Will Foxley has a horror story about a bad encounter he had with a dodgy PR person. The former tech reporter at CoinDesk recalls being embarrassed in his first few days on the job after he relied on bad information fed to him in an announcement.

“I got burned by a bad PR agent within, like, two or three weeks on the job, where they gave me false press release information,” he says. “I didn’t quite verify it enough and then got called out by one of the higher industry people. That’s like the quickest way to ruin your relationship with a journalist.”

He’s quick to add a disclaimer that “there are some great PR people out there,” but he estimates the good guys only account for about 20% of the industry. The “lower 80%” either don’t care about, or don’t understand the technology, or the fact journalists put their reputations on the line whenever they run a story.

“They only have an interest in pumping whatever the coin they’re tasked with pumping and getting whatever company they need into whatever headline, which is really unfortunate. And it leads to a lot of burnout among journalists, and a lot of frustration.”

Fortunately, the best crypto PR practitioners understand how to play the game and act accordingly. “The most important currency we have is trust,” says David Wachsman, founder and CEO of the eponymous PR firm. “We have to earn that because the one thing I know for certain is reporters are a cynical bunch, and they know when something feels off.”

It’s a dangerous game to get wrong because PR agents and sometimes entire agencies can get blacklisted by publications or develop a bad reputation industry-wide, explains Foxley.

“If you don’t like a PR person, you tell at least everyone that you’re working with at your organization,” says Foxley, who is now the editorial director at Compass Mining. “I saw that quite often. You’re like, ‘They’re from that firm? Don’t talk to them.’”

Emerging industry

The world of crypto PR is an emerging industry of specialist PR firms that are responsible for a large proportion of the crypto news out there. Co-founding president of the Association of Cryptocurrency Journalists and Researchers Joon Ian Wong says that good PR agents play a much-needed role. 

“I think PR people in any sector, including crypto, are an important part of the information landscape,” he says. “Their job is to ensure that information flows easily and freely to the media.” He adds: “But clearly they work for clients, so, you know, you can have issues with conflicts of interest.”

Samantha Yap says PR agencies do a lot of work behind the scenes as the interface between crypto projects and journalists. “Half our time is literally educating our client on how the media works,” she explains.

“We spend a lot of time telling them: ‘Oh, you can’t put this promotional angle out because journalists are not going to write about it,’ ‘we’ve got to take a more newsworthy angle,’ or ‘try to fit the story in the context of the wider industry.’

She continues: “What the journalists see in their inbox is like two weeks of brainstorming work — at times it works, at times it doesn’t.”

Laundry list

Although Foxley is a big fan of Yap and calls her a “legend,” he has a laundry list of complaints about the vast majority of pitches he receives. But the biggest issue is that in a full-to-the-brim inbox, there are usually only a couple of useful leads among a sea of boring or irrelevant non-news.

“So 80% is just dog trash,” Foxley says. “I’ve just seen some horrendous pitches over my years at CoinDesk, and frankly, I don’t quite understand why those pitches are made the way they are.” 

“They’re not helping themselves out.”

Some pitches massively oversell the potential benefits of whatever unproven technology they’re pumping, while others appear to have been bulk emailed to every journalist in the world. Many are unfamiliar with the fundamental requirements of journalism (which is that stories need to be newsworthy by being either important, unique or very interesting), but one common issue is a lack of technical understanding.

“More often than not, especially as a tech reporter, I saw PR pieces that didn’t understand the tech that they were describing,” he explains. “You get a PR guy or gal who doesn’t exactly understand it, and they’re trying to explain what a ZK-Rollup is. No, firstly, you don’t know how to describe it, and this is the wrong context.”

PR news

This isn’t to say crypto journalists always cover themselves in glory either when they receive a newsworthy pitch. Yap sums up up the mission of PR agents simply and eloquently:

“The sign and the skill of a good PR person is to pitch journalists the best possible angle in the way we want them to write it.”

In an ideal world, of course, journalists would use a story pitch as the starting point, research the background, and speak with outside experts before producing a well-thought-out and balanced article that contributes to better understanding in the cryptosphere.

What actually happens far too often is that press releases are given the barest rewrite before being uploaded.

There are many reasons for this: low rates of pay on some crypto sites and a constant need to “feed the beast” — i.e., the website — updated and new content. It leads to what is known as “churnalism.”



Foxley concedes that writing four or more news stories a day can be “mind-melting,” and it’s “very easy just to lean on the press release and the story that’s given to you. It’s just fodder for the story. But it’s not good for the industry; it’s not good for readers.”

“That’s why I’m a fan of less stories per day from a news publication per day because I don’t see another way of getting rid of that.”

Leslie Ankney has been on both sides of the fence, as a contributor to The Merkle and Forbes, a PR specialist at Ditto PR and communications lead at Anchorage Digital Bank. “I’m sure there are times when you’re under deadline — it’s probably tempting,” she says, adding:

“Hopefully, as a reporter, you have insights and questions to follow up with, something that the press release didn’t cover. But I understand that maybe if you have to turn out five pieces a day you may not have time.”

Wong says this is not a problem unique to crypto media. “I think you see the same thing with a lot of finance reporting,” he says. “You see the same thing with listed stocks, penny stocks, and so on. There’s lots of blogs and publications out there that do the same thing.”

The ACJR aims to improve standards in crypto journalism, and Wong points out that the more well-resourced a crypto publication is, the more likely the staff has been conditioned to be wary of running any messages a PR person wants to convey:

“Based on what I know of the reporters who work at some of these places […] they tend to be more skeptical and more critical about announcements and other notices put out by crypto PR folks, and because they work in crypto media, they are better equipped to actually cut through a lot of the marketing speak or the PR speak and get to the heart of the matter.”

Foxley agrees that some journalists always view PR people with suspicion. “I had some colleagues at CoinDesk that refused to interact with any PR people because they saw it necessarily tainting their work.”

How did we get here?

Wachsman is one of the biggest players in crypto PR, with 80 staff across offices in New York, Dublin and Singapore and clients including Cosmos, Hedera Hashgraph and NEM. The Financial Times recently named it one of the 500 fastest-growing companies in the Americas.

It traces its history back to when David Wachsman bumped into the CEO of Coinsetter in a bar in 2014. This led to Wachsman learning about Bitcoin and taking the exchange (later sold to Kraken) on as a client. He struck out on his own as a crypto specialist in 2015 and quickly signed up clients including Trezor, Slush Pool, Airbitz and the Coinsource Bitcoin ATM network.

Wachsman wasn’t the first crypto PR specialist. He credits Michael Terpin’s Transform PR with that honor, but he says those two firms were pretty much the extent of the crypto PR industry at that time.

“It wasn’t the wild west; it was non-existent,” he recalls. “Most of the time it was founders directly emailing reporters. They didn’t know the right protocol. Sometimes, they weren’t very informative; they didn’t answer questions appropriately or in a timely fashion.”



“I remember reporters being thrilled when you could do something like send them a high-resolution headshot,” he says.

When crypto firms needed publicity, they sometimes used mainstream PR agencies. Wong recalls how non-specialist often had zero understanding of what it was they were promoting. “I often knew a lot more than the PR person about what their client was doing,” he says.

“Whether it was a PR who was telling me about Bitcoin mining or some esoteric financial thing, a lot of folks at big agencies … have no clue what’s going on in cryptocurrency.”

Wachsman says a critical mass of specialist crypto PR firms didn’t appear until after the initial coin offering boom in 2017–2018. “Very few reporters, and consequently PR professionals, were paying attention,” he says.

Scams, spam and pay for play

Into the void stepped crypto’s infamous guerilla marketing and PR campaigns. Michael Whitlatch is now the creative director at North Equities, which conducts respectable digital marketing and PR campaigns for regulated listed companies.

But during the ICO boom, he fell into a very different job after convincing 300 people in six weeks to use his referral code to buy a coin. “I realized I kind of had a knack for this kind of thing,” he says.

Whitlatch and his team were responsible for spreading the word on social media about projects. If you’ve ever interacted with someone on Reddit, Facebook or 4Chan who has a high degree of knowledge about a coin and a very positive attitude toward it, you may have met them. If social sentiment in a project’s Telegram group was turning sour, it was the job of Whitlatch and his team to jump in the chat to spread positive vibes and information to help turn it around.

It was a much more sophisticated effort than the infamous bounty campaigns of the era that saw armies of people liking pages and writing spammy tweets about a project, often in broken English, for a handful of coins per task.

“Often, I would say bounty campaigns eventually wound up hurting companies,” Whitlatch says. “Because they did come across with the full shilly force of mistyped posts,” he says.

Whitlatch’s team stopped working in the area due to increasing regulations. “It was looking like it was going to go the way of securities, and we didn’t want to get involved with anything illegal,” he says.


Whitlatch’s team was at the more respectable end of such endeavors and genuinely believed in the projects it promoted — seeing it as a way to invest in them as they were invariably paid in tokens.

But others were much more mercenary. One ICO promotion outfit email doing the rounds in 2018 asked for a $22,000 monthly retainer for astroturfing an entire social media campaign, in which fake posts would be retweeted by fake accounts with fake followers, and entire Reddit threads fabricated by one guy with 10 sock puppet accounts:

“I can put you on the front page of any subreddit I want. I can get you a positive reaction from the basement dwellers at /biz (who spend a lot on crypto by the way). I can put you on the front page of Hacker News … I can kindle positive organic discussions about your company in places where other ICOs get torn to shreds.”



Other shady crypto and marketing PR firms openly offered guaranteed placement in publications like Forbes and Huffington Post for a flat fee. TechCrunch reporter John Biggs wrote in 2018 that he was offered payment for posts “almost every day and almost all the journalists I talked to reported the same.” Most declined, but some did not. “I heard about these things,” says Ankney, who adds:

“I found that really appalling. I was really angry and frustrated because even though I don’t have a journalism degree, I still held myself to a high journalistic standard. And I was shocked that others did not.”

There are still some echoes of these services today, such as Bitcoin PR Buzz, which bills itself as the “World’s First Crypto PR Agency” and claims to have helped 850 clients raise half a billion dollars. It offers the “Breakthrough Article Pack” for $13,997, which includes the services of a writer to put together a bespoke article that’s distributed on a variety of crypto sites including BeInCrypto, Bitcoinist and NewsBTC, among others.

Of course, there’s nothing unethical about running a sponsored article as long as it’s clearly identified as such, and it can only be presumed this is Bitcoin PR Buzz’s practice. However, these examples linked on this site are not tagged as sponsored posts.

The professionals

Fortunately, as the industry became more and more professional, the PR and marketing cowboys began to disappear.

“I think it’s professionalized,” says Foxley. “I was not there in 2017 and 2016, so I won’t say anything about that. But I think PR people are more available; they understand the space more; they have an interest in maintaining relationships for the long term.”

There were a few false starts along the way. Wachsman explains that the first wave of professional PR specialists emerged in 2018 — only to be hit hard by crypto winter toward the end of the year.



“We saw the exit of a number of firms, including global agencies at the time. And not many of them were there for the real ascent of the industry in 2020.” Wachsman himself was forced to lay off 16 out of the 110 staff.

“It was rough because our team is so tight-knit that it felt like it was ripping out your left arm,” he says. But Wachsman survived and has since been joined by a raft of new firms.

One of those firms is Yap Global. Samantha Yap began her career as a broadcast journalist in Asia before jumping the fence to PR and later becoming enamored with crypto. She founded Yap Global in 2018, which has now grown to a team of 10 with clients including FTX, Enjin and Nexo.

One of the most misunderstood things about PR, explains Yap, is that it’s not just about creating and sending out messages. It’s also about carefully cultivating relationships with journalists and editors. “People forget that PR is not like advertising and marketing. It’s about relationships,” she says. “It’s a two-way street.”

At its best, PR and journalism are a mutually beneficial relationship, in which journalists are connected to relevant information and interviewees, while PR agencies are able to get coverage for their clients.

The relationship is important to tend to, as when it goes wrong, it can be very bad indeed. Foxley recalls a long-running feud between a well-known crypto PR agency and CoinDesk after the editors had become unhappy with how some stories had played out and blacklisted them.

“Some higher-profile people kept pitching us during it, and I think we stopped taking their stuff,” he says. Foxley recalls getting an ear-bashing from the PR firm’s founder one day.

“He just went off on me about how we weren’t correctly running (the agency’s) stories. And I was like, ‘Bro, I’ve never talked to you before,’ and then it ended up just him and (executive editor) Marc Hochstein talking for two hours on the phone and him complaining about CoinDesk and then I think things normalized.”

PR on news stories

While PR agents are often tasked with chasing journalists, what is equally important is how they deal with journalists when they start being chased themselves.

Journalists — who always need a response by five minutes ago — may not appreciate how much work goes on behind the scenes, says Ankney. She works in-house for Anchorage, which in January was given the approval to launch the first federally chartered crypto bank in the United States.

“Pretty much everything that we say has to be legally approved, which I think is probably a part of why it’s hard for reporters if you need a source in two hours,” she says. “It’s definitely difficult sometimes to get things approved in time.”

One of the trickiest situations for any PR professional is how to respond publicly during a crisis. One of the biggest “bad news” stories any crypto PR firm is likely to deal with is an exchange hack, where millions of dollars and millions of unhappy users are involved. 

Wachsman has worked with Kraken, Binance, Bitfinex and Bitso over the years and says the first order of business is to prepare a detailed plan on how to respond to a potential hack accounting for all the different stakeholders while keeping one eye on the legal ramifications across multiple jurisdictions.

“When you work with an exchange, one of the first things you do is you prepare that playbook, and it’s quite extensive,” he says. Timely and accurate updates are the only way to play it, according to him. “You need to go and give them as much information as you can, that you know for certain is accurate,” he explains.

“Or else, what you’re going to do is create — I’m going to call it — the shitstorm.”

In the past, plenty of exchanges have attempted to spin a cover story about “system maintenance” to cover up a hack, but that’s playing with fire in a world of crowdsourced fact-checking by highly motivated users on social media.

“Everything is found out at some point,” says Foxley. “That’s just how it goes. Like you can’t keep a secret in crypto. That’s, like, the tagline, right: ‘Don’t trust, verify.’ So, I would not do that. I would be honest.”

*Thank you to Elias Ahonen for interviewing Samantha Yap for this story. 



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A new milestone for Bitcoin, COVID hits conference, Buterin’s DOGE payday



Cointelegraph By Editorial Staff

Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week


Bill to make Bitcoin legal tender passes in El Salvador

El Salvador has officially become the first country in the world to adopt Bitcoin as legal tender.

A law outlining the proposals, introduced by President Nayib Bukele, passed with a “supermajority,” attracting 62 out of 84 votes.

Under the so-called Bitcoin Law, merchants must accept Bitcoin as well as U.S. dollars — and they’ll be expected to present prices for goods and services in both currencies. The government is going to be releasing an official crypto wallet for consumers to use, but they can rely on private providers if they prefer.

Permanent residency is going to be available for those who invest 3 BTC in the country, and now, a 90-day implementation period has begun.

As the 90-day implementation period begins, the president has asked a state-owned geothermal electric company to examine plans “to offer facilities for Bitcoin mining with very cheap, 100% clean, 100% renewable, zero-emissions energy” — from its own volcanoes.

Unsurprisingly, reaction from regulators hasn’t been overwhelmingly positive. One executive at the Bank for International Settlements has called El Salvador’s move an “interesting experiment” — but warned that BTC hasn’t passed the test of being a means of payment. The International Monetary Fund has also warned the decision could have significant legal and financial ramifications.


New report: El Salvador Bitcoin pump failed to attract smart money, for now

El Salvador’s plans were first announced during a keynote speech at Bitcoin 2021 in Miami, but the markets appeared to pay little notice.

Things changed on Wednesday — the day Congress passed the legislation. Bitcoin logged its best daily performance since Feb. 8, the day Tesla announced that it had added $1.5 billion worth of BTC to its balance sheet.

Although there are reasons to celebrate, Stack Funds’ head of research Lennard Neo has warned there was little in the way of bullish reactions from so-called “smart” investors.

Bringing the bulls back down to Earth, he warned: “We should not expect a significant impact on Bitcoin for a country with a GDP per capita less than 7% that of the U.S., with its economy suffering the worst crash in decades last year.”

Bitcoin’s seven-day high stands at $38,334.33. The strong move helped save the bulls during Friday’s options expiry, because any level below $34,000 would have wiped 98% of call options.


MicroStrategy gets $1.6 billion in orders in junk bond offering

MicroStrategy has attracted $1.6 billion worth of orders in a recent junk bond offering — four times more than what the business intelligence firm initially sought.

Junk bonds are debt offerings by companies without investment-grade credit ratings and typically offer investors higher returns while carrying higher risk.

It comes days after the publicly listed company, which owns 92,079 BTC with a current market value of $3.2 billion, announced plans to spin off its crypto holdings into a new subsidiary called MacroStrategy LLC.

Although this has been interpreted as bullish news, alarm bells started sounding after the junk bond offering was announced — the latest in a series of debt raises to buy more Bitcoin. MSTR stock fell after the news.

MicroStrategy closed the week at $516.44, some way off the year-to-date high of $1,315 that was seen in February.

In a recent article, analyst Juan de la Hoz said MicroStrategy would be at risk of bankruptcy if Bitcoin prices fell, adding: “MicroStrategy is a rare high-risk low-reward investment opportunity, and a strong sell.”


Bitcoin 2021 attendees’ positive COVID-19 tests are going viral

Some of those who attended Bitcoin 2021 in Miami have tested positive for COVID-19, leading to a wave of negative media coverage and speculation that it may have been a “superspreader event.”

Thousands of people went to the two-day event, which did not require proof of vaccination or enforce the wearing of face masks. There was little in the way of social distancing either as people packed into crowded auditoriums.

One influencer on Crypto Twitter, Mr. Whale, estimated that there were more than 50,000 visitors at the event. He noted that this was the first major in-person conference since the pandemic began, and said dozens of participants have tested positive.


Vitalik Buterin has made $4.3 million from his $25,000 investment in Dogecoin… so far

Ethereum co-founder Vitalik Buterin has revealed that he invested $25,000 into DOGE in 2016… and has made a pretty penny as a result.

His first concern was how he would tell his mother — not least because “the only interesting thing about this coin is a logo of a dog somewhere.”

Buterin told Lex Fridman’s podcast that he was caught off-guard by the speculative frenzy that resulted from Elon Musk’s fascination with the joke cryptocurrency.

He recalled being in lockdown in Singapore when the price of DOGE shot up 775% from $0.008 to $0.07 over the course of a single day, thinking: “Oh my god, my DOGE is worth, like, a lot!”

Buterin added: “I sold half of the DOGE, and I got $4.3 million, donated the profits to GiveDirectly, and a few hours after I did this, the price dropped back from around $0.07 to $0.04.”

Assuming he held on to the remaining 50% of his DOGE stash, he would now be sitting on tens of millions of dollars in paper profits.


Winners and Losers


At the end of the week, Bitcoin is at $35,211.65, Ether at $2,318.90 and XRP at $0.81. The total market cap is at $1,493,755,186,500.

Among the biggest 100 cryptocurrencies, the only two altcoin gainers of the week are Amp and Chiliz. The top three altcoin losers of the week are Internet Computer, THORChain and Synthetix.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.



Most Memorable Quotations


“Regulatory clarity enables companies like BlockFi to continue innovating. It enables consumers and investors to participate in this sector with the utmost confidence.”

Zac Prince, BlockFi CEO


“The ~$38,000 area for BTC is the one to watch right now.”

Rekt Capital


“Cryptocurrencies demonstrate all the hallmarks of ‘bad money’: unclear origin, uncertain valuation, shady trading practices.”

Pieter Hasekamp, Netherlands Bureau for Economic Analysis


“Investors should consider the volatility of Bitcoin and the Bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying Bitcoin market.”

U.S. Securities and Exchange Commission


“@davidguetta knows what’s up. His Miami pad is for sale. Can buy with #Bitcoin or #Ethereum. In general, not a good idea to part w/ disinflationary #crypto that consistently outperforms real estate… but smart folks like Guetta love to take it from you.”



“Adoption of Bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis. We are following developments closely, and we’ll continue our consultations with the authorities.”

Gerry Rice, IMF spokesman


“Moments ago in our #London saleroom, an extremely rare “Alien” CryptoPunk #7523 from the collection of @sillytuna sold for $11.8M as part of our #NativelyDigital NFT auction – setting a new world auction record for a single CryptoPunk.”



“Stablecoins are not launching us off into some brave new world […] The key here is to ensure that just because something is packaged in shiny technology we don’t somehow treat the risks it poses differently.”

Christina Segal-Knowles, Bank of England


“Digital currency from central banks has great promise. Legitimate digital public money could help drive out bogus digital private money.”

Elizabeth Warren, Democratic Senator


“I don’t think @michael_saylor is familiar with Murphy’s Law. What if #Bitcoin crashes below $20K? Will #MicroStrategy sell stock at depressed prices to shore up its balance sheet? Will it sell Bitcoin to raise cash? If MicroStrategy goes bankrupt will creditors HODL its Bitcoin?”

Peter Schiff, economist and crypto skeptic


“I should have bought a lot more — that was my mistake.”

Marc Lasry, Avenue Capital Group CEO



FUD of the Week 

U.S. officials recover $2.3 million in crypto from Colonial Pipeline ransom

Officials with a U.S. government taskforce have seized more than $2 million in crypto paid in ransom following an attack on the Colonial Pipeline system, which caused fuel shortages for many people in the U.S.

The Bitcoin in question was connected to Russia-based DarkSide hackers, and about 63.7 BTC has been clawed back.

Although there’s little doubt that this is a good thing, Bitcoin’s price actually ended up falling because of concerns over how the FBI actually managed to seize the cryptocurrency. Coinbase has refuted suggestions that it was involved.

Mati Greenspan, the founder of Quantum Economics, has said that the recovered ransom is actually bullish for Bitcoin, as many had expected U.S. politicians to use crypto as a scapegoat for the attack and enforce some heavy-handed regulations.


Proposed New York Bitcoin mining ban watered down to allow green projects

A proposed crypto mining ban calling for a forced three-year hiatus on all mining operations in New York has been watered down — and will now allow green projects.

The bill passed in the senate on June 8, and has now been referred to the state assembly. If the bill is passed there, it will be delivered to Governor Andrew Cuomo to either approve or veto the proposed legislation.

The initial New York Senate Bill 6486A sought to halt all crypto mining for three years in order to conduct environmental impact reviews on mining operations in the tri-state area.

However, the bill was amended in the senate to get it over the line, and the revised 6486B bill is now focused solely on any firm that uses carbon-based fuel sources to power proof-of-work crypto mining.


Alleged $3.6 billion crypto Ponzi’s victims still believe the exchange is legit

Victims of an alleged $3.6 billion crypto Ponzi scheme in South Korea are reportedly hampering the progress of a police investigation and a joint lawsuit — as they still believe in the project and hold out hopes of getting a return on their investments.

V Global is accused of defrauding about 69,000 people out of four trillion won ($3.6 billion), all while promising investors they would triple their investments.

A notice on the company’s website says that it strongly denies the “false” claims and has filed a complaint with police “for defamation and obstruction of business.”

If V Global is found guilty, it would potentially be one of the biggest crypto-related Ponzi schemes on record, in a similar fashion to the infamous multi-billion Ponzi scheme from OneCoin in 2015.


Best Cointelegraph Features

Pronouncements from the G-7 allow green fintech to flourish

Sustainability and the need to lessen climate change amid the COVID-19 pandemic have become the global economic agenda.

Miami stakes the claim to become the world’s Bitcoin and crypto capital

Miami has a dynamic mayor, lots of VC money and is coming off the largest-ever crypto extravaganza, but is that enough without legal clarity?

More IRS crypto reporting, more danger

The U.S. authorities are becoming seriously interested in crypto, making unreported crypto more dangerous.

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We’ve passed peak corporation already — Michael Anderson, Framework Ventures – Cointelegraph Magazine



Cointelegraph By Andrew Fenton

The pandemic has changed society forever — and in many cases, not for the better. But when historians look back in a few decades, will they see this period as a turning point in the transition from an economy dominated by corporations to a new crowdsourced model where participants are incentivized with tokens to grow a project and share in the profits?

It may sound far-fetched given that mega-corporations dominate the present reality, but imagine a world in which Uber drivers and their passengers own and operate a decentralized rideshare network. Or one where Airbnb property owners, guests and even the cleaning staff share in the success of the cooperative business.

“What has happened over the last 10 to 12 months would have probably taken 10 to 12 years had it not been for the pandemic,” explains Michael Anderson, co-founder of Framework Ventures. A VC fund, Framework Ventures has raised $115 million for two investment funds and is a major DeFi player, getting in early on Chainlink, Synthetix and

Anderson says the concept of a decentralized collective effort has become normalized by working from home.

“That kind of concept of working for a company where you show up every day, and there’s an office […] that’s kind of been broken down,” he says. “It forces people to have questions as to do we need that going forward?”

The “Uber as a Decentralized Autonomous Organizations (DAO)” concept has been around since at least 2016 when blockchain project Arcade City started talking it up in the wake of a successful fundraise for the ill-fated The DAO. However, it’s now finally beginning to capture the zeitgeist. This month alone, Bankless co-founder David Hoffman wrote a long discussion on the topic called “The Future of Work,” and Bloomberg’s Joe Weisenthal touched on it in his “There’s a New Vision for Crypto” piece. Meanwhile, tech billionaire Mark Cuban tweeted at the end of May that DAOs taking on corporations was the “ultimate combination of capitalism and progressivism.”



The DeFi sector has been at the bleeding edge of the rise of DAOs and Digital Organizations (DOs), which are similar but are less governed by code and aren’t autonomous. They enabled a cooperative model and collective ownership of protocols, becoming popular in DeFi as a form of governance and as a way to crowdsource development. 

Yield farming may have begun life with a poor reputation as guerilla marketing-meets-Ponzinomics, but it quickly became clear it was a great way to reward the most active participants in a community with tokens and often a share of the revenue. In turn, this incentivizes the best participants to help grow the protocol, bringing ever greater numbers into the project.

“That ownership element is what has the power,” explains Anderson. “And the best communities are the ones where you’ve got the earliest adopters, brought in from the get-go, and they become your biggest supporters, they become customer support, they become business development.”

Thinking bigger

If it works in DeFi, there’s no reason it can’t work in other industries and economies. Any marketplace could potentially benefit, and that doesn’t mean simply tokenized versions of eBay or Uber. Anderson uses the example of a clothing production line in which the sourcing of materials, the creation of clothing, distribution and sales could all be incentivized and organized through this new model.

“I think what we’ve seen over the last few years is a peak of corporations. And what I think we now have with the formation of DAOs is almost as a replacement for a limited liability corporation or a corporation in general,” he says. “It’s a replacement of incentivization layers, like equity and stock options, with tokens.”

“It’s mostly DeFi, but expanding beyond that, I think you can start to take this model into any marketplace. I think it ultimately becomes a really unique way of incentivizing participation.”



The model has plenty of advantages: being decentralized means that anyone, anywhere in the world who has an idea for building on top of the protocol — or who figures out a better way to do something — can jump in and reap the rewards. The process of iteration and evolution speeds up, too. No longer must you wait for the grinding gears of a corporation to grudgingly accept a new way of doing things. It simply happens via an efficient competition that produces the best outcome for a collective.

“Ultimately, that makes things more efficient and scalable, but also more fair and open,” Anderson explains, adding that it enables anyone, anywhere, to compete with tech entrepreneurs in San Francisco or Silicon Valley, who previously had the advantage of being in close proximity to capital. 

“Breaking down those walls is really exciting, for the future of the world, but also the future of work.”

“Community ownership, I think, is a fundamental difference and a fundamental innovation,” he says. “And that’s why I love tokens. It is a completely new design space; we’re just scratching the surface as to how we can use these in different and novel ways.”

More equitable than equity

In a way, DAOs and DOs are a modern spin on older concepts around partnerships, co-ops and collaborations, made a thousand times more efficient by technology. And while our mental models for this sort of ownership currently look a lot like handing out equity, Anderson expects that to change as the use of tokens grows and evolves.

According to Andersen, having a clear vision of the future — or a strong thesis about how things may evolve in the future — is one of the things that separates Framework Ventures from many other investors in the space. Unlike the short-term, price-oriented thinking that predominates in crypto, Anderson and co-founder Vance Spencer believe in looking at where digital finance is headed over a timeframe of five to ten years and place their bets accordingly. They are popular guests on DeFi-themed podcasts as a result of their inspiring and well-reasoned thoughts about the future.

Framework’s first big success came before they’d even formalized the fund, with Anderson and Spencer developing a thesis around the need for smart contracts to access secure, reliable real-world information, which informed their investment in decentralized oracle network Chainlink:

“Mass adoption of interesting smart contracts will require data feeds that are secure, external to the blockchain (i.e., interest rate data from a bank), and maintain privacy when incorporated into a smart contract. Data feeds that meet these conditions are not currently available.”

Their investment thesis — which my short summary can’t really do justice — paid off well. Anderson brings up the example of Don Valentine, the late venture capitalist who founded Sequoia Capital, who invested in Apple after having a similar epiphany that personal computers would one day be in every home and on every office desk. This is the secret to successful VC investing, Anderson says.

“Finding the pieces that fit into that vision and into that new world, I think, is actually the easy part,” he says. “The hard part is being able to discern, you know, what that future state looks like.”

A long time ago in the startup world

Anderson grew up in Palo Alto, California, the “epicenter of the startup world,” and attended Yale University in Connecticut. He was planning to study electrical engineering or computer science and play college football. But in September of his freshman year, the fourth-largest investment bank in the United States — Lehman Brothers — collapsed and filed for bankruptcy. That event led to his fascination with finance and his degree in economics and computer science.

In the aftermath, he’d hear firsthand accounts of the turmoil on Wall Street from the family members of his friends, and he’d pore over reports in the New York Times and WSJ. He learned about the intricate and arcane nature of mortgage-backed securities and collateralized debt obligations.

“Once you start to really dive into how in-depth and complicated it gets, I don’t think there’s anyone that actually understands the entire system,” he says. “You could spend a lifetime trying to figure it out.” He gravitated towards fintech as a potential solution.

“Software is the eighth wonder of the world in my mind. How can we build software that expedites or emphasizes the power of finance?”

He was initially torn between pursuing a career in technology or finance and dabbled in both. While interning at Apple in 2011, he was dismayed to discover a company that creates such elegant products was organized like a “stodgy kind of corporate opaque institution,” in which even many of the department heads didn’t know what product was launching next. He realized he was unlikely to make an impact there.

Anderson also spent three months as a summer analyst at Barclays Bank, where he researched companies considering going public like GoPro and Dropbox.

“I was tired of covering them, and I realized that I just wanted to go work for them,” he explains. “And so that’s ultimately what led me to Dropbox.”

He spent three years at Dropbox and another two at Snapchat, mostly in the role of product manager. There he learned how to take an idea from conception to production, keeping users’ needs in mind as the product scaled up to millions. This knowledge would later prove to be a key experience in how he approaches the growth of crypto networks, none of which yet operate at consumer tech levels.

Despite mining Bitcoin during college, Anderson didn’t truly fall down the crypto rabbit hole until he read the Ethereum white paper in 2015 and a light went off in his mind. Shortly afterward, when he was moving to Los Angeles to work for Snapchat, a friend sent him on a “blind roommate date” with Vance Spencer, then working for Netflix. The pair bonded over Ethereum pretty much from question one.

“Our kind of friendship grew very, very quickly. We started to have an informal investment partnership together, where we were looking at different angel opportunities, and it just kind of grew from there.”

Top Shot in all but name

It’s one thing to develop a clear vision of the future, and it’s another to profit from it. As with most things, timing is everything. Unfortunately, Anderson and Spencer were about three years ahead of the market in 2017 with their first venture, Hashletes, essentially an NFL version of the outrageously popular NBA Top Shot.

Collectible NFT player cards enabled users to enter fantasy football games and win prizes. One of Anderson and Spencer’s contentions about NFTs, which we’re only starting to see come to fruition in 2021, is that NFTs need to have utility as well as provide digital ownership.

Hashletes was the first app in the iOS store connected to Ethereum, but the project only lasted a season and a half, killed off by high licensing fees and a lack of interest or understanding about NFTs at that time. Anderson and Spencer sold the business to a sports holding group in New York.

“It’s definitely hard to push something, especially when you know that this idea should be working but the infrastructure, the technology just isn’t there,” he says. “[American entrepreneur] Marc Andreessen has said that there are no bad ideas, it’s just the wrong time. So, there’s a little bit of that. You know being too early is also the same as being wrong.”

“I’d say we definitely built our empathy toward entrepreneurs in the space. And that’s what gave us a lot of the insight into how we wanted to build Framework and why we wanted to build Framework.”

Given the newfound interest in NFTs this year, Framework Ventures is once again pursuing the space.

The pair’s template for success was created with their initial investment into Chainlink when it cost 11 cents during the ICO in 2017. Anderson’s investment thesis is still online, explaining why they had a price target of $10–$20 for the 11 cent token. It’s already blown past that: At around $25, the token represents a more than 22,000% return in about three years.

“We made probably 20 to 25 different investments as angels prior to starting Framework, but Chainlink was definitely the best performing out of those. But I think it’s the one that we have the most close relationship with, just because of the breadth with which they can expand into all the different industries.”



They formalized the partnership afterward, with the Link investment leading to many more, including Aave, dHedge, Synthetix,, Dodo, Edgeware, Fractal, Futureswap, Kava, Pods, Primitive, Teller, The Graph and Zapper. “It’s how we’ve got to know all these other teams. Chainlink oracles are usually the commonplace choice,” he says.  

The importance of community

Another premise is that in a decentralized, open-source world — in which any protocol can be cloned and see its liquidity siphoned off — it’s the quality of the community around a project that’s more important than almost anything else. 

“The community is something that has the real kind of defensible moat,” he says. “And so community development for us is paramount. We like to say, you can evaluate the team, you can evaluate the product, you can evaluate the market, but the most defensible elements of any investment are going to be the core team and then how that transitions into the community and community ownership.”

Rather than mere investors, they’re active participants in the community, too, if highly influential and cashed-up community members. A sister entity called Frameworks Labs has 17 software engineers building tools and systems to increase growth and engagement for projects they’ve invested in.

“We’re one of the larger Chainlink nodes in the network. We’re one of the larger Graph nodes. We’re active traders if we’re investing in an exchange, liquidity providing,” he says. “It just means that we’re rolling up our sleeves being one of the larger users, one of the largest suppliers for most of the investments that we make; it’s kind of how we define our edge.”



Anderson and Spencer see this as a perfect alignment of interests, and it’s why this new decentralized organization model can take some of the power back from the tech monopolies and corporations that dominate everyday lives.

Back when the internet began to spread, utopian visions of its potential to democratize the world and give the power back to individuals dominated. What actually happened, of course, was the development of addictive algorithms, filter bubbles and cancel culture, thanks to tech monopolies like Google and Facebook.

It might be another utopian vision, but perhaps the DeFi/Web 3.0 model can succeed where the internet failed. Anderson points out he used to live just down the street from Google. He says, “Google had this famous line of: ‘Don’t be evil.’ Well, blockchains enable something even better, which is: ‘Can’t be evil.’”  

“When you build cryptographic guarantees around transparency and decentralization, you know, there isn’t the ability for a corporation to extract value in the same way.”

Radical transparency means the best projects with the most well-thought-out incentives will attract the sharpest minds, and those that hold 50% of the tokens back to dump on retail in the future will get shunned.

“I think you don’t really get that far with those types of models because everything is transparent and the incentives are aligned with the users of the product, the users with the networks, more so than anything I’ve seen in the previous tech generations.”



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Rogue states dodge economic sanctions, but is crypto in the wrong? – Cointelegraph Magazine



Cointelegraph By Andrew Singer

When the United States first began going after crypto companies for violating its economic sanctions rules, it didn’t exactly start with a bang.

In December, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced a settlement with crypto wallet provider BitGo after the Palo Alto firm failed to prevent persons apparently located in the Crimea region, Iran, Sudan, Cuba and Syria “from using its non-custodial secure digital wallet management service.” The penalty for the “183 apparent violations” of U.S. sanctions? An underwhelming $98,830. 

This was “the first published OFAC enforcement action against a business in the blockchain industry,” according to law firm Steptoe, though six weeks later, the OFAC reached a similar settlement with BitPay, a payment processing firm, for 2,102 “apparent violations of multiple sanctions programs,” in which BitPay reportedly allowed persons in the same countries as in the BitGo case — but with the addition of North Korea — “to transact with merchants in the United States and elsewhere using digital currency on BitPay’s platform even though BitPay had location information, including Internet Protocol addresses and other location data, about those persons prior to effecting the transactions.” BitPay agreed to pay $507,375 to resolve its potential civil liability. 

But future violators may not be treated so leniently. 

It’s worth mentioning that economic sanctions are typically applied “against countries and groups of individuals, such as terrorists and narcotics traffickers,” according to the United States Treasury, typically “using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals.”

More enforcement actions are coming

“The crypto industry should absolutely expect more enforcement actions from OFAC, and it can expect that there will be much larger penalties as well,” David Carlisle, director of policy and regulatory affairs at Elliptic, tells Magazine. “OFAC’s first two enforcement actions in this space were fairly simple cases, where the underlying violations were not egregious, and the fines were small. But the next cases could be different,” he says, adding:

“There will undoubtedly be other cases out there that involve much more serious and egregious violations — and we can expect that OFAC will issue fines against crypto businesses that are much larger than those we’ve seen thus far.” 

Expect more enforcement actions like those targeting BitPay and BitGo, Doug McCalmont, founder of BlocAlt Consulting LLC, tells Magazine, as well as “the expansion of targeted individuals, such as coders linked to the technology.”

Sanctions regimes have been applied extensively in recent years by the United States, as well as the European Union and United Nations, often targeting “rogue” nation-states, such as North Korea and Iran. One of the best-known early crypto cases involved Virgil Griffith, a former hacker, who was arrested in April 2019 after he spoke at a blockchain and cryptocurrency conference in North Korea, in violation of sanctions against that outcast nation, the U.S. charged.

“Sanctions violations are a real problem,” says David Jevans, CEO of CipherTrace, whose crypto forensics firm recently found that more than 72,000 unique Iranian IP addresses are linked to more than 4.5 million unique Bitcoin addresses, “suggesting that sanction violations are likely rampant and mostly undetected by virtual asset service providers,” he tells Magazine.



It’s not only U.S. authorities who are concerned about “bad actors” using the nascent blockchain technology to dodge economic sanctions. Agata Ferreira, assistant professor at the Warsaw University of Technology, tells Magazine that authorities in Europe “are becoming more active and more focused. The crypto space is under increasing scrutiny, and I do think this trend will remain and accelerate.”

Nor is OFAC’s recent crypto focus surprising, according to Robert A. Schwinger, partner in the commercial litigation group at Norton Rose Fulbright. The United States government has no choice but to rein in this new, cryptocurrency asset class because “not to do so would expose it to the risk that its sanctions regime could be rendered toothless by new financial technology. Players in the cryptocurrency space who ignore the restrictions imposed by U.S. international sanctions are being put on notice that they do so at their peril,” he wrote on 

Is DeFi problematic?

As crypto adoption grows, it seems only inevitable that its decentralized finance (DeFi) networks will push up against more nation-state prerogatives, including economic sanctions. But isn’t there something inherently problematic about cracking down on a decentralized exchange (DEX)? Does the exchange even have a headquarters address? Is anyone even home at home? And should it even answer to someone if it’s truly decentralized?

Enforcing regulations in a decentralized world presents certain challenges, Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission and now a senior fellow at Harvard University Kennedy School, tells Magazine, but U.S. regulators are “trying to figure it out.” Might the government eventually put more pressure on developers at DeFi firms, including decentralized exchanges? “Yes, they can build into the code some proper procedures… but it’s a lot easier to go after centralized intermediaries,” says Massad.

“I think we’ll see DeFi developers come under real pressure to ensure their platforms can’t be abused for sanctions evasion — for example, by enforcing address blacklisting,” says Carlisle, adding, “There’s a lot of talk lately about [traditional] financial institutions taking interest in DeFi, but it’s hard to imagine major institutions participating in DeFi unless they’re confident it can be compatible with sanctions requirements.” 

DeFi projects are “decentralized, disintermediated and borderless — everything our legal and regulatory frameworks are not,” Ferreira informs Magazine. The latter are built around centralized, intermediated and jurisdiction-based architecture. “Therefore, this is a challenge and a learning curve for regulators, and not all proposed solutions will be optimal,” Ferreira adds.



The European Union is aware of the DeFi compliance challenge. Its recent Markets in Crypto-Assets (MiCA) regulatory proposal “will force DEXs to have legal entities in order to transact with EU citizens, effectively banning fully decentralized exchanges,” Jevans tells Magazine. He adds, “Many so-called DEXs have very centralized governance, venture capital investors and physical headquarters, causing the FATF to categorize them as VASPs.” 

Meeting compliance demands for digital service firms like BitPay and BitGo will require some effort. “Trying to identify where a counterparty is located in a crypto transaction is inherently difficult due to the nature of the technology,” observes Carlisle, but crypto firms need to realize that anytime they undertake a transaction “and don’t make an effort to identify the source or destination of funds, they’re taking on a major risk of sanctions violations.”

Crypto mining, too, carries sanctions-compliance risks. “If you process transactions on behalf of participants in a mining pool that’s connected to a country like Iran, or pay a fee to an Iranian miner,” you could run afoul of OFAC, says Carlisle. There are sanctions risks, too, in handling ransomware payments “because some ransomware campaigns have involved cybercriminals in places like North Korea and Iran.” 

Then, too, the growing use of privacy coins, like Monero and Dash, which hide users’ addresses and transaction amounts — unlike Bitcoin — makes the task more difficult, arguably. 

Forensic blockchain firms, however, are looking into how to “improve sanctions compliance on the part of virtual asset service providers,” McCalmont comments. CipherTrace, for example, has developed the ability to track the anonymity enhanced currency (AEC) Monero, once thought to be “the gold standard of AECs.” He adds:

“These [forensic] firms will rise to the occasion and roll out capabilities that will ‘circumvent’ any compliance ‘speed bumps’ utilized by decentralized exchanges. It really is somewhat of a regulatory arms race.”

And the stakes appear to be rising. 

“There’s overwhelming evidence at this stage that sanctioned countries are using crypto,” says Carlisle, concluding, “North Korea’s crypto-related cybercrime has raised at least hundreds of millions of dollars. Iran and Venezuela have looked to crypto mining as a method for sanctions evasion and to generate revenue.”


Related: North Korean crypto hacking: Separating fact from fiction, Cointelegraph Magazine


To stay ahead in the “regulatory arms race,” some crypto companies are now using tools such as blockchain analytics, recounts Carlisle, to identify whether a crypto wallet belongs to a sanctioned party, but even then, staying compliant can be tricky. “Not only do you need to screen addresses against the OFAC list, you should have systems that are calibrated to detect more subtle signs of sanctions risk, and your staff must be trained to handle situations that involve possible sanctions issues.”

OFAC, too, is operating on the principle of strict liability. “You can be held to account even if you were acting in good faith” with no wrong-doing intended, adds Carlisle. “The crypto industry will need to operate to very high standards of sanctions compliance to avoid run-ins with OFAC.”

Part of a larger, global regulatory trend

Recent sanctions activity is just part of a global crackdown that can be expected in the crypto sector, some say. In May, the U.S. Treasury Department announced stricter new rules for Bitcoin and other cryptocurrencies. Crypto transfers worth $10,000 or more will have to be reported to the Internal Revenue Service. 

This Treasury Department action is likely to be “the first major step towards a global regulation” for cryptocurrencies, according to Nigel Green, CEO and founder of deVere Group, in a public statement. “This is inevitable as the market grows and matures.”

Nor should the crypto community fight it — they should embrace it, suggests Green. “Proportionate regulation should be championed,” he says, further explaining: 

“It would help protect investors, shore-up the market, fight criminality, and reduce the potential possibility of disrupting global financial stability, not to mention offering a potential long-term economic boost to those countries that introduce it.” 

In the absence of new crypto legislation and regulatory guidance, the players themselves — i.e., the crypto and blockchain industry — need to get their house in order, James Cooper, associate dean of experiential learning at California Western School of Law in San Diego, tells Magazine, adding, “We have an obligation to create self regulatory organizations. […] The industry has got to push out all the bad actors.”

If 95% percent of media stories and the public’s conversation about crypto focuses on ransomware or Iranian miners or criminal entities, “then something is wrong,” continues Cooper, because all the good things, like blockchain for food security or blockchain for vaccine tracing, get pushed out. 

A Bretton Woods for crypto?

“We need our Bretton Woods moment,” opines Cooper, referring to the multi-governmental agreement that set the outlines of international finance after World War II. Something similar is needed for the crypto century.

Not all agree. “The Bretton Woods Agreement centralized monetary policy,” says Jevans, and it “is an approach that is unlikely to be accepted in the decentralized blockchain economy since different projects have wildly varying objectives and governance models.”



More promising in his view are the Financial Action Task Force’s recent updated compliance guidelines, which make clear “that decentralized exchanges as well as other DeFi platforms do bear responsibility for ensuring compliance with global sanctions as well as Anti-Money Laundering and Counter-Terrorism Financing laws. The solution is for these entities, now classified as VASPs by the FATF, to adopt solutions that enable them to achieve compliance without sacrificing decentralization and user privacy.” 

Many have called for international collaboration for addressing these new technological developments, like crypto and blockchain, notes Ferreira, but “I am not sure how feasible it is. Authorities sometimes act when there is a trigger. Libra was such a trigger — and a wake up call — for authorities.” She adds, “Maybe we will see other events in the future that could mobilize authorities to more internationally coordinated action.”

Decentralization at odds with the law?

But isn’t there an inherent conflict, though, between economic sanctions — imposed by sovereign nations, or quasi governments like the U.N. — and decentralized finance? 

One of the strengths of decentralized finance, according to proponents, after all, is that it’s a hedge against centralized government corruption, including authoritarianism. Might a blanket ban on Iranian users, for example, also shut out Iranian dissidents looking to transfer money outside the reach of the government? “Absolutely,” answers McCalmont:

“I, a ‘regular Joe guy,’ can create an account on a decentralized exchange within minutes and immediately transfer funds to North Korea, Syria, Iran — completely under the radar and with little effort — speaks volumes. If those dissidents have a will, there is without a doubt a way.”

All in all, what may be required here is a mean between two undesirable outcomes. A young, evolving sector like the crypto and blockchain industry will inevitably have “vacuums” that nefarious, non-state actors will seek to exploit “until the state comes in and kicks them out,” Cooper tells Magazine. 

That’s to be expected. But the U.S. has gone through four years of anti-regulation rhetoric, at least at the national level, and now, under a new administration, a danger exists that it may seek to monopolize all digital assets — and snuff out innovation.

Doing nothing is bad, continues Cooper, but the U.S. government — or any other state — monopolizing digital assets, whether through a central bank digital currency or other means, is also undesirable. The challenge is “finding the sweet spot.”



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