Disclosures and You

Though this issue only fluttered through my timeline on Twitter this morning, I think it’s important to call attention to it and discuss it thoroughly.

Let’s talk about disclosures.

Burning Both Ends of the Candle — With Anger

On September 13th, Larry Cermak, a researcher for the cryptocurrency news outlet, The Block, made a sorta disclosure:

Larry talking about trading YFI repeatedly.

These tweets, which, let’s be real here, are very harmless, caused a big stir in the community. Why? Well, on The Block’s disclosure page, YFI didn’t show up — currently, or ever previously. Tim Copeland from Decrypt brought this to everyone’s attention:

And let’s be clear here: Larry makes it known often that he isn’t a journalist and that he trades.

Additionally, many “research firms” in the cryptocurrency realm are less research and more “quant trading.”

Alameda, run by SBF, isn’t really research.

The Block also maintains that the journalism and research branches of the company are kept entirely separate.

This Isn’t About One Guy

This isn’t about one guy or one media company or a rally of questionable moral outrage. It’s about the value of disclosures and objectivity.

We live in a pretty strange time, where information is cheap, but parsing through it and finding the valuable bits is expensive. Great, objective journalism is hard to come by, not only because it’s a difficult job, but because the very definition of “objective” has come to be subjective.

For instance, a very important point that cryptocurrency advocates utilize against skeptics like myself is that by not purchasing and using the coins I’m criticizing, I lack objectivity. I one hundred percent believe that there’s truth to that statement. I can’t possibly fully comprehend every aspect of what I’m criticizing if I haven’t used it.

Thankfully, I’ve used cryptocurrency exchanges, traded cryptocurrencies, and have a hardware wallet. But I also am aware that that’s no longer enough: I’m supposed to be checking out numerous DeFi projects (by purchasing small quantities), testing volumes and slippage on decentralized exchanges *and* centralized exchanges (by trading), and discerning what trading strategies are bogus (by utilizing them). Honestly, that’s fair. I can only be as critical as my process allows me to be, and I don’t plan on spending my own money to purchase shitcoins.

OTOH, if I worked for a company that provided me with a budget to buy and test out coins, there’s zero chance I would turn down that opportunity. Would it be necessary to tell the world if I held ten thousand tethers on an exchange, even if it was for a company and not myself? I guess not. Would I understand if people discovered that information and were unhappy with me? Yeah, sure.

There’s Been Worse, and That’s the Point

A researcher trading some of their personal cash for fun is a drop in the bucket compared to what’s previously been discovered, such as when Bloomberg apparently paid journalists extra if they were able to move markets with stories:

That is **objectively** making a point of not disclosing and likely resulted in a boon for Bloomberg News in one way or another.

There was also the Michael Bloomberg presidential run, which was a disaster for Bloomberg News, once when they stated they wouldn’t cover it:

And then shortly thereafter when they did an in-depth investigation of other Democrats:

Everyone is guilty of being kind of not objective, it’s just that some are far more opinionated than others, and some still use the distribution of news to control a narrative (see Fox News coverage of Rupert Murdoch, Bloomberg coverage of Michael Bloomberg, WaPo coverage of Amazon, NYT’s coverage of Carlos Slim, CBS coverage of Sumner Redstone, etc etc).

This Isn’t a New Problem

Disclosures present a couple of issues in and of themselves. Often times, disclosures are presented publicly in the **hope** that they will move markets — this is a pivotal point that active short sellers use to bring attention to a stock they’ve shorted with the hope being others will join them.

Larry, and most researchers and journalists, don’t do this. Disclosures are meant to ensure that you know what an author’s motives may be, and generally that’s how most operate. Even Forbes, a giant shill magazine, and CoinTelegraph, a giant online shill magazine, make sure to announce if the article is written by an employee or baghold… ahem, I mean, investor.

There’s also the idea that a disclosure would discredit possibly valuable research or articles. I truly believe that if I suddenly publicly disclosed that I held 10k tethers and 10k ETH, many of my Twitter followers and readership here would abandon me — not just because they would see it as a betrayal of my values, but also because it would seem hypocritical regardless of reasoning. A disclosure of such a fact, even if presented as honesty, could have the opposite of the intended effect — and that’s the unfortunate truth of the matter.

What’s the Solution?

Not so sure there is one. The concepts of disclosures — what must be disclosed and not, who must disclose what and not, and how corporate law should factor into journalistic disclosures, are all very fluid issues that change drastically every few years. Like Larry, I am not a journalist or a lawyer, and I don’t know how to make these concepts feel fairer to everyone.

As someone who reads a fair amount of news from a wide-variety of sources I can say how I cope with it.

1. Always have multiple sources and try to read different perspectives on any issue. It will benefit you in the end.
2. Look at corporate ownership of a media entity and what else they’re invested in so you can logically decipher what issues they’re worth trusting on. If you can’t find any info at all, maybe don’t trust them.
3. Find authors and researchers you enjoy. See if they respond to tweets or DMs. Reach out and ask questions or give feedback — though try to stay polite, even if it’s criticism. Journalists, researchers, and writers are people too, as hard as that is to believe.
4. Decide for yourself what level of interaction you’re comfortable with in regard to a journalist and the topic they’re covering. A good example is embedded journalists: will they have a crazy, fascinating, and worthwhile tale to tell? Undoubtedly. Will it likely be critical of the soldiers the journalist was embedded with? Doubt it.

I have my own gauge of what outlets I consider trustworthy on what topics. I’m not going to dictate to others what those should be, and neither should anyone else. Disclosures are a weird topic, objectivity is a strange concept, and we’re all a bunch of water balloons on a rock in space.

Stay skeptical, friends.