TL;DR: Proof of Social Media (PoSM) is a CoinSpice quick take of the ecosystem’s temperature through the lenses of YouTube, Facebook, Twitter, Instagram, Reddit, Twitter, and wherever else sentiment can be observed. Relatively new and increasingly influential cryptocurrency media outlet, The Block, published an article on a trading practice of Kraken, a well-regarded crypto exchange. The story characterized certain market moves within the platform as “suspicious behavior.” Exchange CEO Jesse Powell took to social media in response, tearing into the piece’s content, questioning the journalist’s acumen, mocking its publisher, insisting The Block blatantly published biased coverage. It’s not the first time The Block has faced credible accusations of yellow journalism.
Kraken CEO Blasts The Block Over “Trash,” “Hit Piece” Article
The Block published, “Suspicious behavior on Kraken exemplifies the gap between crypto and legacy market structure,” by Ryan Todd. In it, he writes of the exchange recently scoring a large funding round and attracting top traditional finance talent, going on to connect how such “leadership additions come amidst reports received by The Block on background of an institutional trader who believes Kraken volumes aren’t exactly where they report they are. Considering the exchange’s reputation and supposed multi-billion dollar valuation, the trader also felt they received less than acceptable service from the exchange, especially considering its push to service and on-board more sophisticated institutional accounts.”
The story moves to questioning an exchange’s lifeblood, liquidity, along with trading bots geared toward favoring Kraken over its users. It continues on in this manner, walking the reader through how seasoned Wall Street traders might cast jaundiced eyes upon the exchange and its doings as a result. At the very least, Todd insinuated, crypto exchanges need to mature, and Kraken is perhaps a prime example.
Kraken co-founder and CEO Jesse Powell raged in response, “Suspicious behavior on @TheBlock__ exemplifies the problems in taking on investors with a habit of terminating journalists. Obvious #deletecoinbase retaliation hit piece. @mdudas an epic Neutrino apologist but I get it — you’re scared for your life. Only excuse for this trash,” turning the article’s logic around.
Trump Rhetorical Tactics
Decoding Powell’s tweet a bit, Coinbase is a rival crypto exchange, an investor in The Block, and #deletecoinbase was a supposed organic movement as punishment for buying blockchain analyst company Neutrino, which has executives from Hacking Team — a notorious bad actor in the space. Dudas is publisher of The Block, and an active and combative crypto Twitter personality.
Powell’s lambast sent Dudas into overtime, and the two barbed back and forth over journalistic ethics, market knowledge, and sourcing. Dudas defended the story, dismissing Powell’s concerns as “Trump rhetorical tactics,” “beneath a 100 follower anon crypto troll,” and “embarrassing.” He also was sure to insist Powell “picked the wrong ‘villain’ here. We’re generally recognized as folks doing the best work in the space,” and seemed to be completely perplexed at the CEO’s outrage.
In truth, it’s not the first time The Block has been called out for sensationalism. There was a similar build up, although admittedly not this heated, of accusations, and Dudas appeared to stand by a story involving CNBC Africa’s Ran Neu-Ner. The Block would later back down and squash the public beef altogether, as CoinSpice documented.
Serve You on a Cold Plate
Comments in the thread appeared to side with Kraken and Powell. “I only read diar and your paper,” a commenter explained, “but lashing out at an exchange, which, again and again, stands up and speaks out for core crypto ideals and against corrupt regulation – for what? a bad support ticket? i think theblock mostly exposed itself as 17ers lacking historical context.” 17ers are those who jumped into crypto during its massive price run-ups, and are often looked down upon by early adopters for not understanding basics about the space.
“You sound like Bitfinexed now,” another commenter chastised The Block, “labeling any market activity you don’t understand as ‘wash trading.’ Your article on Kraken is a hit piece. Timing is everything. Don’t mess with Jesse he’ll serve you on a cold plate (again).”
At various points, Dudas remained “flabbergasted,” put upon, describing Powell’s comments as an “absolute lack of self control,” and “out of proportion ad hominem anger to that relatively minor story.”
Patently Absurd Set of Assertions and Request
Powell doubled down, “Your piece was ad hominem, and you went first, and you didn’t care to do the slightest bit of research or ask for comment. I did not publish a hit piece on you as if it was fact-based journalism. Have a look in the mirror, bud. If you don’t want to get hit back, don’t bully me,” demanding Kraken’s name be pulled from the article, corrected heavily at least (see first image above), or that the piece be scrapped entirely.
“Jesse,” Dudas stressed, “that is such a patently absurd set of assertions and request that I unfortunately need to cut off the discussion. I don’t believe litigating this on Twitter is good for anyone at this point. I’ve got work to do, personally.”
Seattle-based exchange Strix Leviathan’s co-founder, Jesse Proudman, weighed-in with measured commentary, however also ultimately siding with Powell and Kraken. Describing The Block as “excellent,” he nevertheless echoed Powell’s view, “This particular piece isn’t of that same caliber. A trader having an exchange trade go against them isn’t particularly newsworthy and doesn’t indicate malfeasance,” Proudman warned. “Now that your organization has established itself as a credible source, headlines need to accurately reflect the reality of the story and stories need to avoid sensationalist overtures. This has ramifications to the credibility of the broader industry.”
Dudas counts Proudman as someone he respects, and offered, “We continue to be extra cautious on that front. And in this case, a number of folks feel we missed the mark. I have noticed, and we will take that reaction into account as we continue our work.”
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