Whistleblowing in Bitcoin Community & Banks: How They Differ
The finance industry and its banks have strict whistleblowing policies set in place. Cryptocurrencies such as Bitcoin and Ethereum have a completely opposing philosophy.
The finance industry and its banks have strict whistleblowing policies set in place. If an undisclosed individual attempts to exploit the weaknesses and fraudulent activities in a bank, its legal team and executives often seek the help of law enforcement to unravel the identity of the whistleblower.
How banks do it
Currently, Barclays CEO Jes Staley is being invested by financial regulators from the Financial Conduct Authority (FCA) of the UK for attempting to unmask the identity of an employee who previously expressed concerns over the operations of Barclays and the conduct of a former senior recruit Tim Main.
Upon the exposure of the letter sent out by the Barclays employee, Staley requested Troels Oerting, the security chief of Barclays to unravel the author of the letter for potential legal consequences.
A source told BBC that Oerting previously worked for Europol as a law enforcement agent and thus fwhen he was tasked by Staley to look into the case, it was likely that he sought help from other law enforcement agents in Europol to unmask the anonymous author, which explains how the case became a national scandal.
According to analysts including Anna Birtwistle from CM Murray, banks are presumed to operate with an open culture of disclosing wrongdoing. Such ecosystem allows banks to mature as companies and implement better strategies to handle fraudulent operations. The case of Staley demonstrated the exact opposite, which ultimately convinced the board of directors to penalize Staley for over $1 mln.
“Fostering an open culture of disclosing wrongdoing in the workplace requires top-down stewardship and while it may be understandable that Barclays has backed Staley given his successes in post, the bank’s response to Staley’s actions may give mixed messages to its employees and the wider financial services industry about the steadfastness of its commitment to whistleblowing.”
Closed community vs. open source community
Cryptocurrencies such as Bitcoin and Ethereum have a completely opposing philosophy. Most operations are handled transparently and developments are pursued in an open source community of developers.
Even companies, exchanges and wallet platforms disclose their software to an open source development community to eliminate potential bugs or technical issues in their software. Open source development and community ultimately allow users and businesses to trust in their networks.
Whistleblowing is an important element in cryptocurrency and Blockchain development. For instance, when Bitcoin Core developer Greg Maxwell laid out exploitations of the Bitcoin consensus protocol and the potential covert usage of AsicBoost, the entire open source community explored the case altogether.
Within Bitcoin or other Blockchain networks, developers are not concerned to disclose potential issues in their networks or projects because the major focus is always set on recovery and repair.
In fact, in October of 2016, when South Korea’s Bitcoin startup Glass Hunt was hacked and the company lost thousands of dollars of its Bitcoin reserves as a result, Glass Hunt actually expressed their appreciation toward the hacker for exploiting weaknesses in the Glass Hunt platform.
The Glass Hunt team said, offering a reward to the hacker in addition:
“The hacker can’t use the same exploit anymore. In short, he/she/it cracked one of our read-only SQL account passwords and we have since reset them to uber-super-super-amazingly strong passphrases that we personally could never remember.”