The sudden multi-billion dollar collapse of the FTX crypto exchange has left large parts of the crypto world in poverty and misery. Retail investors are bad. Flagship exchanges are on the brink of insolvency. Crypto critics are jubilant. Institutional support is in the toilet, and the toilet is in the landfill.
What should a crypto marketer do?
Many smaller businesses put things on hold in the hope that attention will eventually turn elsewhere. “We advised our clients to wait before announcing anything,” said Samantha Yap, CEO of crypto PR firm Yap Global. “We are aware that all the media and people who care will be following this story for the next few weeks as the contagion unfolds.”
Another PR person, a worker for several large Defi projects who doesn’t want to be named so frankly, put it more bluntly: “All our team meetings revolve around trying to turn bad news into tolerable news.”
His only interest now is to squeeze as much moolah as possible out of the industry until its final collapse. “I worked three jobs as a community and project manager across 3 blue-chip DeFi protocols,” he said. “Two of them are explicit scams, the third not particularly promising. But tell me that $8,000 a month salary is sitting on my ass all day.”
Look closer, though, and you’ll see glimpses of life in this battered old dog. an attempt $1.5 billion increase for a thing called Matrixport. A new one $100 million fund for “institutional clients.” A own market revolve around Monkey-adjacent NFTs. Some, like, central-bank-digital-currency thing sponsored by the Japanese central bank.
Are these simply the final, hateful emissions of a dying being – or is crypto slumbering into a new, improved version of itself that can (presumably) withstand future disasters?
One person who will give a resounding and enthusiastic “yes” is Kristian Sørenson, a serious Danish fellow who believes that the FTX fiasco represents a golden opportunity for crypto to break free from its ugly past and the warm and sensible embrace light of regulatory compliance.
Sørenson runs a data analytics firm called Tokenizer, as well as a PR platform specializing in regulated clients, and the FTX fallout has been something of a blessing. “Since we mostly work with these regulated players, most tried to take advantage of the situation,” he told me. “This is a good time to explain what we actually do and how it differs from the more speculative side of the industry.”
Sørenson believes the main cause of the current crisis was the relative laxity of crypto regulation. Many businesses operate without licenses, and what licenses there are, he said, have been issued capriciously and without the subsequent and necessary auditing. The now under renewed scrutiny by regulatorshe said, “will help accelerate the more healthy part of the industry – rather than get-rich-quick.”
Indeed, Sørenson’s dream for crypto—cover your ears, cypherpunks and Silk Road gunrunners!—is for the “use cases” to be heavily regulated while the underlying technology is deployed in harmless, responsible contexts, for business blockchain-era things like crowdfunding and verification.
One project that particularly excites Sørenson is Farms, an online supermarket in Switzerland turned crypto. “They sell organic products and various vegetables and they wanted to expand their platform, so they did a crowdfunding where they showed shares in the company,” he said. “They were able to achieve their fundraising goals through tokenization – this way they made their core customers co-owners of the platform, which will only increase their loyalty.”
Sørenson is not alone in his call for more care in the crypto universe. Almost every new crypto product announcement that is made known to me at the moment is some kind of response to FTX. In my poorly protected Gmail inbox are now bundles (well, two, since no one really contacts me anymore) of press releases derailing, regulating, strict policies of not gambling with billions of dollars of client funds, and responsible “we would never do that” pitches.
Some are more believable than others. One press release sent out by sprawling Chinese exchange Huobi announces an ambitious plan to “help Huobi return to the world’s top three exchanges,” noting inexplicably that “technology drives development and technology for the better.” – never mind that the project is aided by one of cryptoland’s least hearty characters, “His Excellency and Plenipotentiary” Justin Sun of the pointless TRON blockchain.
It’s not just the exchanges and exchange-adjacent businesses that are looking for a clean fresh start. Alexandra Fanning, a publicist who has represented crypto-artists, told me that November’s frenzy allowed her NFT business to better pursue its ambition of “working with artists who have long worked in new media art have, and to avoid those who just jump on the bandwagon with the assumption that it will make them quick cash.”
At the absolute other end of the spectrum are those who believe that FTX was a product of too much deference to establishment practices, if anything. That includes people like Cindy Leow, the founder of decentralized exchange Nexus, which Leow says has seen a huge increase in users since the crash. “So many people can’t access their crypto anywhere else outside of Nexus,” Leow said. “People say, ‘I’m logged out of Binance for some reason,’ I have to trade on Nexus, that’s the only place I can trade.”
Leow believes the collapse is proof that mainstream, centralized exchanges are too immature to be trusted with people’s hard-earned life savings, and that regulation will only provide an appearance of security and respect. Nevertheless, he believes people should still be able to enjoy that “speculative excitement without jeopardizing the safety of their funds.” Nexus “looks and feels like a centralized exchange,” she said, but users hold their own keys. That way, when they inevitably lose all their money, it will be their own damn fault.
And that’s good for crypto.
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