Writer’s Block — The Trickiness of Going All In on Investigative Journalism

TL;DR: There’s a natural and healthy tension between journalists and their subjects. Information that’s in the public interest should be uncovered and distributed widely. But effective journalistic tactics are changing. Biting tone and opinionated commentary cuts through more quickly. Nuance is overrated in click-driven cultures, and underrated in subscriber-driven cultures. Does the allure of “scoops” help or hurt prospects for sustainable transparency?

The allure of the SCOOP!!!

I thought a bit last night about the mini-drama between crypto media upstart The Block, and 0x-Coinbase-Scalar Capital.

And specifically how it contrasts with the direction we’re taking at Messari (we’re not building a newsroom), and how our community is walking the walk in crowdsourcing objective analyses and potential conflicts between the industry’s top token projects.

In case you missed it, The Block ruffled some feathers yesterday by calling out conflicts of interest between Coinbase, Scalar Capital, and 0x. Specifically, their new young journalist “Frankie Scoops” claimed that “after extensive investigating” they uncovered ties between the three entities, a marriage between two of the principals, and a promise by Scalar to offer “asymmetric” info as a strategic advantage that justified its 2 & 20 fees.

Linda Xie (Scalar) used to work at Coinbase. She’s married to Will Warren (0x). Both have friends at Coinbase. They all advise / support each other’s businesses. But when Coinbase listed the ZRX token as its first supported ICO, the “info asymmetry” line raised eyebrows. Or so says The Block and its legal sources. Friends of the targets cry foul at the coverage. The Block founder Mike Dudas gets kicked out of an investor telegram group for posting Scalar’s investor deck as part of the piece. Mike claps back on critics, and bangs a crusader drum.

There, you’re all caught up.

Here’s my slightly more nuanced take…

Pro of the article: The substance is true. Maybe we need to shed light on conflicts of interest or at least better highlight the incestuousness of crypto. I obviously agree with this: hence Messari’s existence. And while I didn’t love The Block’s synopsis, they at least called it both ways:

“It’s not clear whether Xie’s relationship to Coinbase, combined with her relationship to 0x, present a clear conflict, Whitehead said. “None of these things are ideal,” he added. “Let’s assume [Xie] had strong influence over Coinbase’s listing process, then there’s maybe a conflict.” A direct source at Coinbase denies that Scalar Capital exerted such influence over the listing of 0x. The source also denied that Scalar Capital had access to non-public information prior to Coinbase listing the token.”

Con of the article: I own $ZRX tokens, and it seems I purchased them at the same time — in the same public sale — as both Scalar Capital co-founders. I’d hardly chalk that up to “information asymmetry,” and there’s nothing to suggest Scalar loaded up on more 0x tokens as a fund prior to the announcement. That would indeed be a scandal. (It also defies logic, as if anything, you’d imagine Linda wanting to diversify away from the token she and her husband already own a a significant percentage of.) There’s a lot of innuendo there for a relatively innocuous punch line.

I’m glad Mike and his team exist in the community, because someone needs to go all in on investigative journalism in crypto. It’s not fun, and few do it well.

That’s because calling it both ways means calling out people you like sometimes. That’s why good journalists are such misfits. They generally prioritize truth over relationships. And they’re pretty cultish in that shared ethos even when it clouds better judgment.

I know because I’ve seen it happen first hand, and been guilty of it first hand.

Post-MtGox, there was an infamous email (at least it is in my eyes, since I still wake up in cold sweats thinking about it), where I told a group of executives and VC’s in a private email to basically go f*ck themselves if they wouldn’t push to overhaul the Bitcoin Foundation’s board, which had incestuous and truly shady ties to MtGox.

Many of those same cooler heads ended up backing Coin Center soon afterwards. But I was — as you can imagine — quickly disinvited from the conversation I helped start.

Point is you can’t be both a good journalist/whistleblower/crusader and a good business executive. You’re either charging hard, or perceived as getting “captured” by the establishment you cover.

We recognized this early at Messari, which is why we’re working hard to a) avoid targeting specific teams for bad behavior, and b) building tools that strip us of our role as data curators in the long-term. We know we can’t (and shouldn’t) be judge and jury on data and transparency standards.

I noted a year ago, that we (ahem, I) would have to work hard to pass on critical takes of the industry. Here’s what I said in Token Economy at the time:

I still suck at shutting up.

I’ve gotten better at shutting up, and letting the data aggregation work our team and community is doing ultimately speak for itself. The temptation to cry “FRAUD! INSIDER TRADING! PAY TO PLAY!” is strong, but it’s something we’re going to try to bottle up as part of our long game.

Highlight the good actors, ignore the bad (and make their absence notable by their omission), and let hard-nosed orgs with a different mandate do their thing to shake up the industry a bit differently.

It’s not an easy balance, but there’s too much at stake — for us and for the industry — to screw it up.