The Fight for Bitcoin with Cory Klippsten
\u201cThis is something that I heard from all the crypto funds back in 2017/2018\u2026you can promise any blockchain crypto magic that you want, it can solve whatever problem you say it\u2019s going to solve; and there\u2019s no truth in advertising, no securities laws, no nothing governing the space, so it\u2019s just literally the best magic scam machine in financial markets\u2019 history.\u201d
\u2014 Cory Klippsten
Cory Klippsten is the founder and CEO of Swan Bitcoin. In this interview, we discuss the exploitation of retail markets by crypto VCs. Cory called out many of the crypto ventures that have recently collapsed, but he saves his biggest criticism for the firm that is still active within the industry: a16z.
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Cory Klippsten has a scent for malfeasance within the crypto industry. He explains this by the fact he doesn\u2019t listen to what people say, he tracks their actions and determines motivations. This has enabled him to identify ahead of time some of the most notable scams that have unravelled this year. Cory called out FTX in April this year, Luna in March, and Celsius in Dec 2020.
Yet, there is another VC company that has risen within the crypto industry that has in recent years been the subject of much discussion and criticism. Andreessen Horowitz (it\u2019s also referred to as a16z), founded in 2009, quickly rose to become one of the most influential investors in Silicon Valley after a series of incredibly lucrative stakes in companies such as Skype, Facebook, Twitter, and Airbnb.
In 2013, a16z started investing in crypto, most notably with Coinbase and Ripple. In 2018 they made a concerted effort to focus on crypto as a vertical: they started by raising $300m for the first of a number of dedicated crypto funds, and from 2021 they started to lead fundraising rounds for various altcoins and crypto ventures. Many within the industry saw them as serious and reputable players. Until patterns started to emerge.
The issue is, as Cory highlighted in a recent Twitter thread, a16z have been involved in promoting numerous tokenised projects that have all had the same price pattern: early hype resulting in a massive short-term increase in the value, followed by an equally rapid fall in value and then stagnation. The pattern appears to resemble classic \u201dpump and dump\u201d, followed by \u201crinse and repeat.\u201d
Critics have long complained that such VC companies have been able to \u201ccreate their own weather\u201d, exploiting a regulatory void to monetise off the back of their own hyped narratives that appear to lack credibility. A former analyst for the company actually referred to a16z as a \u201cmedia company that monetizes through VC.\u201d But many observers, including Cory, are now calling them out. The pressure is certainly building for more attention to be paid to a16z\u2019s activities.
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This episode\u2019s sponsors:
Gemini - Buy Bitcoin instantly
Ledn - Financial services for Bitcoin hodlers
Bitcasino - The Future of Gaming is here
Fidelity - Careers in crypto
Ledger - State of the art Bitcoin hardware wallet
Wasabi Wallet - Privacy by default
BCB Group - Global digital financial Services
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