Whoever he is, Satoshi Nakomoto must have watched carefully in 2008 when the advent of subprime mortgages led to one of the worst financial crises in history. He saw the corruption reaching the highest levels of Wall Street’s investment banks, along with the bankruptcy of Lehman Brothers. He understood the financial system would have completely collapsed if George W. Bush hadn’t signed a massive and unprecedented bailout.
It was time for a change, and that change was Bitcoin. At this point, we all know the ideals espoused in the Bitcoin whitepaper released on the heels of the financial crisis: ideals of transparency, sound money and decentralization.
With some in the space on the run for owing billions of dollars to creditors, they may make Lehman Brothers look like saints in comparison. It’s no wonder crypto faces a PR crisis. Addressing this crisis starts with understanding the reality on the ground.
Right now, we are probably in the anger phase of bear-market grief, a condition in which people who wrongfully lost money when the industry crashed — often represented by their governments and law enforcement — are looking to place blame. This explains why the 3AC founders disappeared, a South Korean court issued an arrest warrant for Do Kwon and why Celsius CEO Alex Mashinsky was pushed to resign.
How does the industry move forward from here? For one thing, the anger phase described above should really put the nail in the coffin of the debate about regulation. Crypto enthusiasts can scream at the top of their lungs about libertarian ideals, but it’s always the government to whom they run when they’ve been cheated out of their money.
US President Joe Biden’s administration has already put together the first-ever framework for what crypto regulation should look like in America. We can expect more of that to come, both in the land of the free and in Europe. We can also expect less opposition to regulation from investors who are tired of being screwed by crypto companies.
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The crypto press has a role to play here too. Beyond prowling for catchy headlines, now is the time to take off the gloves and really analyze the pros and cons of legislation coming out of governments across the globe. That’s especially crucial because crypto journalists often understand the landscape much better than mainstream reporters, and their coverage can close the gap in the public’s understanding of the latest developments.
Concrete progress in regulatory compliance is only the tip of the iceberg of what serious crypto projects should strive to achieve. A general effort to foster common sense and transparency should be top of mind.
Celsius owes investors more than $4.7 billion. That’s just one company out of an industry that still remains relatively niche. If crypto is to continue to expand into mainstream circles, the risk of defaulting on thatmuch money is simply unfeasible. It’s great to leverage blockchain to offer new financial opportunities, but crypto companies can’t defy the laws of gravity. Projects aiming to succeed where Celsius failed must take actionable steps to properly assess risk the way traditional financial institutions do, and they must publicize every milestone they achieve.
To bolster regulatory efforts, it’s up to crypto projects themselves to take specific actions to comply with the latest laws and publicize those efforts too. Small steps warrant publication just like SEC clearances do. Even onboarding a compliance attorney to communicate the importance of doing things by the book, for example, goes a long way.
PR is based on actual actions companies take. As such, a joint effort to boost the industry’s reputation can only take place when projects make meaningful steps to ensure transparency and legal compliance. Journalists write real news, not puff pieces. In that sense, the material fate of the industry will improve as its PR image brightens.
JPMorgan Chase CEO Jamie Dimon slammed crypto tokens as “decentralized Ponzi schemes.” The truth is, many of them have been. It’s time to generate some positive PR and finally change that.
Motti Peer is the founder and CEO of ReBlonde, an award winning PR agancy specializing in technology and crypto.
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.