As a journalist, you have to decide whether you are going to report the truth — or toss your principles aside and take the money. In the years I’ve been covering crypto, I’ve seen too many people opt for the latter.
Still, I almost fell over backward on Monday when long-time tech journalist and NYT opinion writer Kara Swisher compared crypto to the early days of the internet. Swisher has been writing about the Internet since the early 1990s — she knows better!
Swisher said this in the course of defending an advertisement on her podcast for a cryptocurrency IRA — from a company that offered to put your retirement money into Axie Infinity.
Also, what’s a “conflict of interest”?
Electricity was only discovered in 500 BC, it’s still early days
Comparing crypto to the internet is how crypto boosters typically respond to critics.
Normal person: “This stuff doesn’t work. It’s been around for 13 years, and it’s still absolute crap.”
Crypto booster: “Crypto is like the early days of the Internet, give it time!”
In fact, crypto is not like the internet at all. The internet was useful for real work from its first days before it was even called the internet, and people recognized its power and potential at every step. There were no bros telling everyone within earshot that it would definitely not suck if you gave it another 13 years. [David Gerard]
Retire on your altcoin pile
Swisher previously wrote for The Wall Street Journal and The Washington Post. She is the co-founder of Recode, now owned by Vox Media. In 2018, Recode launched the Pivot podcast.
Swisher cohosts Pivot semi-weekly with NYU business professor Scott Galloway, who has also written several books. They talk about tech, business, and politics.
In a recent podcast, Galloway read an ad for one of their sponsors — crypto firm iTrust Capital — and encouraged listeners to put crypto into their Individual Retirement Account: [Podcast]
“By now, you’ve probably heard all about cryptocurrencies like bitcoin. You might even already be invested in them. But did you know, you could also invest in cryptocurrencies through your retirement account? That’s right. With iTrust Capital, you can buy and sell cryptocurrencies from a crypto IRA and get all the same tax advantages as a traditional IRA. iTrust Capital allows you to invest in over two dozen of the most popular cryptocurrencies and unlike the stock market, you can buy and sell 24 hours a day. The iTrust Capital platform is easy to use and it only takes a few minutes to set up your account. Setting up an IRA is free and iTrust fees are low. It’s time to start taking control of your financial future with iTrust Capital, you can get all the tax benefits of a retirement account while investing in crypto. Visit iTrust Capital/Pivot to start investing in today.”
Alan Graham called the pair out on Twitter for promoting this kind of reprehensible garbage. Crypto is a speculative investment. It’s built on bad tech, it’s volatile as hell, and people often lose everything in hacks and rugpulls. This is not something you want to be advising people to invest in, especially for the long term.
Swisher got defensive: “Last time I checked people had choice and this offered a range of investments. Also crypto is by no means over. It’s like early internet. Sorry if that bothers you but it is so.” [Twitter, archive]
iTrust does offer a range of investments — a range of highly volatile, underwater investments. I’m not so sure you’ll be able to retire comfortably on Axie Infinity tokens.
When Graham pointed out that crypto is 100% not like the Internet, Swisher attacked bitcoin critics: “The crypto fanboys are bad but the skeptics are overplaying it.”
Conflicts of interest are so old-tech, it’s a new paradigm now
You may be utterly unsurprised to learn that Swisher is a bitcoin holder.
On December 20, 2017, just as bitcoin was hitting the peak of the 2017 bubble, Swisher casually mentioned her bitcoins on a Recode Decode podcast — which she also hosts — with The Verge’s Casey Newton and Spark Capital General Partner Megan Quinn. Newton pointed out the Vox Media ethics policy didn’t allow journalists to hold cryptos. Swisher just shrugged it off and continued. [Recode/Decode – 43:13; transcript]
In a February 2021 tweet, Swisher admitted to owning 10 bitcoins — with a face value at the time, and again now, of about $300,000: “Whatever. I own 10 Bitcoin from a brick ago from when I was doing a story when it first started, so don’t lecture me.” [Tweet, archive]
Swisher said she forgot where she put her bitcoins — maybe in a box in a storage unit? “I have no idea if I threw it out or not.” [Tweet, archive]
We all know how easy it is to misplace $300,000. Who even keeps track of change that small?
The New York Times has a rule against writing about your own asset holdings. This hasn’t stopped Swisher from writing about bitcoin and other crypto assets in the paper, with no disclosure. [NYT editorial standards]
Scott Galloway is a professor of marketing and a long-time startup guy, who writes about investment and startups. David Gerard quoted Galloway in his book “Libra Shrugged.” Galloway has skewered crypto before and thinks Robinhood is exploitative trash.
Galloway said on Twitter that he “felt awkward” reading something with crypto and IRA in the same sentence. But not awkward enough not to take the money.
What is iTrust?
Irvine, California-based iTrust Capital wants people to invest their retirement funds in all manner of bottom-of-the-barrel shitcoins.
iTrust’s favored market is crypto investors who don’t want to pay a ton of capital gains tax on their holdings. [Traders Magazine]
The very first crypto that iTrust list on their website is AXS, the native token of the blockchain game Axie Infinity. North Korean hackers recently stole $600 million in ETH from the platform. Axie has yet to compensate users for their losses. The AXS token itself has gone through the floor.
iTrust Capital has raised $128 million in funding over four rounds. Left Lane Capital and Ledger Prime are the most recent investors. [Crunchbase]
The firm is doing business as M2 Trust, a charted trust company in Denver, Colorado. They are fiduciaries, but they hide behind iTrust’s brand and disclaim responsibility as a broker. It’s shady of them to be promoting cryptocurrency as fiduciaries.
iTrust says on its website it will store your retirement funds at Coinbase Custody, who notified the SEC recently that they will ransack your retirement if the company runs out of money. Coinbase treats Coinbase Custody just like trading funds — not like someone else’s separate money. [Bloomberg]
Why putting your retirement money into crypto is bad
The Department of Labor has told fiduciaries that putting cryptos into 401(k) risked their licenses in March. This isn’t a 401(k), though, so the DoL doesn’t have a say in it. IRAs are personal, and it’s a lot easier to put any old crap into them, making them perfect targets for crypto.
The SEC has also warned investors about the dangers of putting money in cryptocurrencies.
As I wrote earlier, crypto-asset manager Grayscale has been telling investors to buy shares of GBTC, advertising the fund as a way to get exposure to bitcoin without having to buy bitcoin.
Many investors bought GBTC for their IRAs in 2020, because they trusted in GBTC’s television advertising. GBTC is currently trading at 30% below the face value of the bitcoins it’s supposed to represent. Quite a few of these investors have written to the SEC, begging them to make GBTC into a bitcoin ETF — so their retirement won’t be underwater. [SEC Comments]
Galloway and Swisher are encouraging investors to take huge risks with their future. This is shamelessly irresponsible. Galloway in particular should know better.
Additional reporting from David Gerard
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