The collapse of crypto trading firm FTX has been extremely messy.
The company’s new CEO John J Ray III said he had never seen such a “such a complete failure” in his three decade career – and this man worked for Enron. Billions are missing. Several other large cryptocurrency firms have fallen, as they were too intricately entwined with the failing exchange.
You probably know all this. But the sheer amount of interest in the case, along with the extremely online and visible behavior of the principals involved, has led to an avalanche of truly wild anecdotes.
Do you know, for example, that senior FTX staff were supposedly in a “polycule” – which Cosmo describes as “all the interconnected partners in the same polyamorous network”? (They also shared a therapist.) What about the fact that FTX gave American employees $200 a day in Doordash credits to spend on takeout? Or that the firm used a private plane to shuttle Amazon packages from Florida over to its offshore headquarters in the Bahamas? What about the fact that the Tumbler of Ex-Alameda Research CEO had several mentions of the supposed ‘massive’ genetic differences between Indians of different castes? And that she was an avid reader of Gossip Girl fanfiction?
I recently was at a networking event in London, and we discussed how revelations from the FTX story had been pleasingly spread out. Vox landed a series of revelatory text conversations, while Bloomberg had details about how the firm owed unsecured credits of more than three billion and CoinDesk kicked it all off with a report on its balance sheet. This weekend the man himself went on a strange, unorthodox media tour which included letting a Bloomberg reporter spend 11 hours in the Bahamas and telling Alex Osipovich at the Wall Street Journal, “There are lots of ways that one could have done this in a responsible way. Clearly what we did was not one of them.”
I could go on spinning out anecdotes from hours spent soaking up the reporting, but I suppose that’s not really the point. This particular scandal got me thinking about just how much detective work can be by reporters to dredge up items about the past.
Thirty years ago we made due with anonymous quotes bashing someone at the center of the scandal. Now almost anyone can be an archaeologist, digging through the online detritus of one’s personal life.
When the line of privacy disappears
I’ve sometimes played the role of the communications person on the phone with a journalist, telling them why they shouldn’t publish a particularly embarrassing piece of information about a client. I’ve emphasized how the item in question wasn’t relevant to the conversation at hand, pleading with them to exercise discretion and enlightened omission.
Truth be told, this always made me queasy. As a former journalist and occasional writer, I wince at the idea that we should wall off large amounts of information from publication.
Too often censors hide behind bad faith rationale in pursuit of a more positive slant.
In America political donations are increasingly and in most cases public. Supporting a particular candidate can be seen as newsworthy for all sorts of reasons – to question someone’s objectivity to draw connections between powerful people.
It’s easy to be one step removed from a controversy. All manner of vendors and service providers have been swept up in the FTX affair. These people may not have realized how close they were to the spotlight’s glare.
And never underestimate the power of gossip. Actions of the rich and powerful can be newsworthy if there’s a feud or a fight. No one expects to go through divorce proceedings or a custody battle, but these are fodder for plenty of stories.
Get ready for your close up
You probably aren’t planning to be the target of a regulatory action or deep investigation. And truthfully, the odds are you won’t be. However, the possibility of action suggests taking a bit of pre-emptive action.
Your actions online are more than material you post. Tweets you like, LinkedIn posts you comment on all appear on your feed and can be traceable. Consider whether you want something you happen upon on a moment of mindless scrolling held up as your beliefs. There’s a reason why the caveat “Retweets ≠ Endorsements” has fallen out of many people’s Twitter bios – it doesn’t hold up without context. Unless you refute something, having it appear in your feed implies some sort of agreement with the position.
Consider how you use your primary handle or username. If you are commenting on pieces in the Wall Street Journal using the same nickname that you do for more risque extracurricular activities, that’s very easy to track. All it takes is one entry to open up an entire world of activity.
To that point, practice some pre-emptive prudence. Google your name. See what comes up and then do the same with executives at your company. Flag anything problematic and consider what can be done to mitigate the situation. There’s no magic wand to reduce unflattering results, but there are ways over time to de-emphasize the material and add additional pieces on top of the junk.
Curiosity killed the cat
How exactly information surfaces on the Internet is at its core, something like alchemy. Why is this blurry photo from a wedding 10 years ago the second picture that comes up when you search my name? Who can say. But it’s definitely an area where a bit of foresight can have ramifications when the unexpected hits.
Jon Schubin is a director in Cognito’s London office