Coinbase Doesn't Like the Media, so It's Starting a 'Media Arm'

The company wants to become a "source of truth" while casting journalists as bullies with an inherent conflict of interest.
May 27, 2021, 7:09pm
Coinbase Doesn't Like the Media, so It's Starting a 'Media Arm'

Late Wednesday night, cryptocurrency exchange Coinbase announced it was embarking on a grand quest: to "become a source of truth" by rolling out a new Fact Check blog that exists to hit back against negative press coverage and “misinformation.” Coinbase envisions Fact Check as eventually becoming a full-on “media arm” of the company.

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“Companies are often reticent to share negative facts, in their inherent desire to look good, and therefore also have a conflict,” Brian Armstrong, Coinbase’s chief executive, wrote in the blog post. “To become a source of truth, companies will increasingly need to be comfortable sharing facts which paint them in a negative light as well.”

Armstrong’s blog is bombastic and lofty—he writes that “every tech company should...become a media company”—while also aimed at settling scores with a dedicated department at Coinbase, which has itself been subject to increasing media scrutiny as its profile has risen. 

Coinbase did not respond to Motherboard’s request for comment.

Armstrong describes the normal process of working with journalists to ensure a story is accurate before publication as enduring “regular beatings from a bully,” for example. Indeed, he writes, all traditional media have a conflict of interest in covering tech companies, even when stories are accurate. 

“If you look at companies like Facebook, they suffered enormous brand damage when traditional media coverage of them went south (although their business metrics seem to be unaffected),” Armstrong writes. “Accurate or not, traditional media has a conflict of interest when covering this topic, as they are in the process of being disrupted by tech. Yet to a large degree, Facebook turned the other cheek and didn’t respond or point out this conflict.”

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The answer for Armstrong is to double down on the recent trend of companies “debunking” critical news coverage and casting aspersions; a practice that has already veered into harassment of a journalist by an Oracle executive, for example. Coinbase itself has already dabbled in this practice when it attempted to front-run a detailed account of discrimination against Black workers at the company by questioning the story’s accuracy, an example that Armstrong uses to illustrate the direction of Coinbase’s Fact Check blog. 

The arrival of the Fact Check blog comes at the same time as companies like a16z (a Coinbase investor) and Stripe are creating their own media operations. All of this seems to herald a new strategy: reskinning PR operations as “media companies.” 

Armstrong separates this from the option to "fight." He cites Peter Thiel's destruction of Gawker as the "canonical example" of this, but also points to Amazon's responses to Andrew Yang and Elizabeth Warren when they criticized the company for dodging federal taxes and union busting for years. Armstrong overlooks Amazon's responses to other public figures that fought to advance lies about whether workers urinated in bottles or shat in bags, which might also fit under this category of response.  

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“The advantage of this approach is that you are standing up for yourself. The downside is that warfare can be time-consuming, taking your energy away from building,” Armstrong writes. “You need to be prepared to go all the way, and it needs to be in line with your brand.”

The third option, besides working with journalists like a normal company or fighting tooth-and-nail, is to "simply publish the truth." And to do that, companies have to make the same realization that Coinbase is: they "no longer need to go through biased intermediaries to communicate with their customers and stakeholders." In fact, Armstrong adds, sometimes "the only organization that knows what really happened is the company itself."

This is a strange argument, considering that critical news stories are often based on interviews with people who currently or formerly worked for the company. “The company” here, then, doesn’t appear to mean rank-and-file employees, or at least those who might speak to journalists, but a faceless amalgam of executives and PR teams. 

The implication that corporations are unbiased and objective actors―as if they don't have an interest in telling certain stories to certain audiences―is the sort of biased and subjective viewpoint you’d expect from a CEO. Armstrong lists examples of companies creating their own studios and creating their own media companies as proof that corporations can "create accountability when misinformation is spread via other channels" but lapses into referring to them as "full-on media arms, complete with editors-in-chief and original content." It does not actually follow that making original content creates accountability, especially if you look at two of his examples: Amazon and Netflix. How is making a Prime exclusive movie or a Netflix Original related to corporations "emerging as a third source of truth”?

The reasoning is muddled at best, and ultimately it appears that despite the lofty language Fact Check will primarily settle scores on behalf of Coinbase. Indeed, Armstrong admits that the first batch of "Fact Check" blogs to "combat misinformation and mischaracterizations" have been reactive. There's a post that came on the heels of a massive cryptocurrency price drop insisting that Bitcoin mining is not a major driver of climate change, some correctives about executive share sales on the day of Coinbase's IPO, the front-running of the NYT exposé on Black discrimination at Coinbase, and a roundup of "false statements" about illegal activity in crypto. 

Some day in the future, Coinbase hopes it'll be able to "start creating more of our own original content" but, for now, it seems Fact Check will seek only to manufacture consent and publish sleek PR whenever the need arises.