What the latest search for Satoshi means for the crypto industry

In case you’ve been living under the crypto world’s version of a rock, the Times claims Adam Back, a crypto OG who founded the Bitcoin precursor Hashcash, is Satoshi. It’s not a bad guess but, for reasons I outline here, the reporter appears to have been led astray due to confirmation bias. 

Laura Shin, who like me has been on this beat forever and doesn’t have a dog in this fight, likewise thinks the Times whiffed. She delicately points out that Back has been all over the media in the last week, which would be odd behavior if he really were Satoshi—but is not so odd for someone who is trying to whip up enthusiasm for his Bitcoin treasury company.

Ultimately, the Times piece is interesting not so much for its conclusion but for what the piece says about the state of crypto and the world we live in. On the latter, my longtime tech-watcher pal Om Malik decries the “unmasking impulse” and how, in recent efforts to unmask both Banksy and Satoshi, something is being lost.

“Banksy and Satoshi weren’t hiding wrongdoing. They were hiding themselves. In Banksy’s case, the anonymity IS the art … With Satoshi, the anonymity IS the architecture,” Malik writes. “Unmasking either one isn’t just invasive. It is destructive to what they built.”

Malik rightfully laments how, in an always-on and attention-hungry online environment, the Times’ exposé seems to attack the very idea of anonymity. Meanwhile, anonymous or pseudonymous participation seems to be on the decline in the world of crypto, too. This is ironic given how privacy and decentralization have always been touchstone values in crypto culture. But it’s also understandable in light of pressure from governments, and from the sad fact that shady operators have so often used the “we’re anonymous like Satoshi” shtick as a pretext to rip people off.

That’s why the Times piece, and all the attention surrounding it, may ultimately be good for crypto. At a time when the industry is coming to be defined by Wall Street and backroom deals in Washington, D.C., it’s refreshing to go back to basics and recall an earlier time: A time when one man, disgusted by government profligacy and enchanted by the potential of blockchain, decided to build an alternate financial universe and, once he succeeded, chose to fade into the mists forever.

Jeff John Roberts [email protected]@jeffjohnroberts

DECENTRALIZED NEWS

The crypto hedge fund Split Capital, which launched in early 2024, is winding down operations. The firm’s founder, who says the “entire hedge fund industry in crypto is kind of down and out,” is joining stablecoin startup Plasma. (Fortune) 

Gemini’s losses mount and its share price continues to plummet. Now, some in the company are proposing that the Winklevoss twins forgive over $300 million of loans they’ve extended to the company they founded. (Bloomberg)

Morgan Stanley entered the crowded Bitcoin ETF field with a hyper-low fee. It enjoyed roughly $25 million in volume during its first half-day of trading, making it one of the most successful overall ETF launches to date. (Fortune)

World Liberty Financial’s $WLFI hit an all-time low on news that the company has been borrowing against its token on a little-known DeFi platform tied to one of its top executives. (Fortune)

Investment managers are fretting that a new Labor Department rule meant to promote the inclusion of alternative assets—including crypto—in 401(k)s does not provide a sufficient legal shield for employer fiduciaries if things go south. (NYT)

MAIN CHARACTER OF THE WEEK

Adam Back wins this week’s main character nod hands-down for greeting the “revelation” that he is Satoshi with a sprawling media tour that included CNBC’s Squawk Box.

MEME O’ THE MOMENT

21 million. If you know, you know.