The name Sam Bankman-Fried and the acronym that follows might just be burned into my memory. The perpetual press coverage of the happenings at FTX has even the least interested crypto person aware of what went on. But of course, Sam wasn’t new to the press, featured as one of Forbes’ 400 Richest Americans just over a year ago and routinely showcased as the crypto world’s wunderkind across all tech publications. Now the only thing that piece and Sam’s coverage of late have in common are the biting remarks about his outfit choices.
The collapse, though hardly the first time a new area of finance has suffered a huge blow, does tell an interesting story about the obscure CEO narrative and how Sam often took the wrong approach.
Touted as a philanthropist and someone who was truly trying to bring good to a (sometimes) not-so-good industry, we all felt the whiplash when FTX went awry. Starting from Sam openly admitting via Twitter DM that all the stuff he said about regulations was “pretty much just PR, f*ck regulators,” and that all the “ethics stuff” was “mostly a front.” Again, most certainly not the first time a CEO said something he didn’t mean to get friendly with the press, but with a collapse like this, his persona switch just gives the public a million more reasons to be angry and makes the industry’s reputational recovery that much harder.
Now that the FTX “collapse” headlines are starting to slow and regulators are doubling down on efforts to increase their oversight, it’s time for crypto companies to really think about what comes next from a public perspective. Prices are beginning to climb and new rules are coming about every week, and it’s pretty obvious this spectacle has somehow (ironically) created a chance for the industry to redefine itself. But does that mean that all crypto companies have to agree with this path forward? How can CEOs ensure they are sticking to the ethos they portrayed prior to this scandal, without making themselves a black sheep? Let’s first start with what’s being said about this path forward.
Where is the industry headed? Here’s what we think:
- While increased regulation is necessary for the industry to continue to thrive and ensure accountability, this doesn’t mean that risk will be removed in its entirety and companies should still take proper precautions and prepare investors for multiple potential scenarios. Washington moves slowly these days, so a legislative cure-all is unlikely to emerge anytime soon.
- Crypto winter isn’t over, and layoffs will continue. However, these moves are evidence that companies are getting themselves together to properly react to new guidance and future downturns. We’re seeing layoffs far beyond crypto due to the general market disruption at the moment, as Spotify, Meta, and Amazon are just a few that recently took action. We’ll likely see companies promoting the narrative of business protection/planning for what’s to come as these layoffs continue.
- Blockchain and NFTs could reap the benefits of uncertainty and are expected to be the first industries to recover as brands continue to follow Starbucks and Disney in Web3 marketplaces. As subsects of a larger narrative, it would be smart of brands tied to blockchain and NFTs to position these tools as far away from the crypto crash portrayal as possible and continue to come up with innovative, but realistic, ways to be utilized in the meantime.
Now, as a brand in the space, here’s what to think about as you become part of the rebuild:
- Don’t push the regulation narrative just for the sake of uniformity. If complete and utter regulation means bad business/halting the innovation at your company, then it’s wise to take a moment to think about your intentions for the long term before promoting something you don’t actually agree with. The last thing people want to see is companies saying one thing today and another tomorrow. Align your messaging! There is, however, a way to push for and be on the side of regulation that will protect investors and ensure nothing like FTX can happen again.
- It’s okay if you’re unsure what’s coming next. Start by working on messaging for the current market and build from there. Quarterly predictions and other short-term analyses could work well. You don’t have to be spot-on but it’s good to try and participate in conversations you’re comfortable with, while the rest works itself out. A little humility in the wake of a crisis can often go a long way, so CEOs—and their communications team—should take this to heart.
- Stick to what you know. There are plenty of ways to join the blockchain, Web3, NFT, etc. public conversations without getting tied up in FTX drama. For example, how do you feel about the Metaverse? Are there areas that your company can comment on and advise about the future of this unknown space? And more on those NFT marketplaces that are being built up by Starbucks and Nike: Where does your company see this heading? Is it good or bad for consumers? Ask your PR team to do some digging on areas that are “safe” from the FTX-related narrative but are still important trends to discuss and relate back to your business.
In all, no matter where we land with FTX, this is a lesson to leaders: knowing—and then standing with—your company ethos should always be high on the list of priorities. Once you understand that, work with your PR team and others to help tell that story to the public. This is more important now than ever, as consumers are looking for authenticity. Your audience will be incredibly quick to dismiss your company if they feel you aren’t—especially if something major goes wrong.
A reconstruction for the industry is well on its way, but while that naturally evolves, revisit your brand narrative and communications approach and have honest conversations with your team. After all, the world has made too many technological advancements to let one crypto winter and press superstorm control our forward-thinking futures.
Rebecca Schmidt is Head of Fintech and Digital Assets at Water and Wall.
No comments have been submitted for this story yet.