🚀 Chaos reigns on the Internet

Recapping the FTX bankruptcy, Twitter's verification debacle, and Meta layoffs

Nov 13, 2022

It’s been a wild week! Three stories dominated the headlines - here’s a recap:

📉 FTX goes bankrupt. Crypto exchange FTX has declared bankruptcy less than a year after a $400M round at a $32B valuation. The troubles started for FTX last week, when the CEO of competitor Binance tweeted that Binance was selling its FTX tokens. This sparked liquidity concerns, as a wave of investors attempted to pull $5 billion out of FTX - causing FTX to halt withdrawals. Binance swooped in with a tentative agreement to acquire FTX, but this collapsed in a day as a result of “corporate due diligence” and “the latest news reports regarding mishandled customer funds.”

What were those news reports? FTX allegedly lent more than half of its customers’ assets to its trading arm, Alameda Research, which made risky investments. When Alameda was unable to cover its losses, FTX also went under. CEO Sam Bankman-Fried has since stepped down - and several of FTX’s investors, including Sequoia, have marked the company down to zero. Now, FTX has reportedly been hacked and assets are being withdrawn (it’s unclear who is responsible). More to come here, but if you’re interested in diving deeper we’d recommend this primer.

☑️ Twitter update. Twitter also had a busy week. Here’s what went down:

The company rolled out its new, $8 / month Twitter Blue subscription - which allows anyone to pay for a “blue check” verification. It has since halted the launch for new subscribers due to fraud (more on this below).
While Twitter usage hit an all-time high, the company has seen a “massive” drop in revenue as advertisers have pulled out of the platform. Musk reportedly warned employees that bankruptcy “isn’t out of the question.”
The Chief Information Security Officer and Chief Compliance Officer resigned.
Elon Musk ended the remote work policy, requiring 40 hrs/wk in-office for many employees - though the company will make exceptions in cases where it’s not logistically possible or the employee’s manager vouches for them to stay remote.

😔 Meta makes layoffs. Meta laid off 11,000 employees, 13% of the workforce, as part of CEO Mark Zuckerberg’s effort to create a “leaner and more efficient company.” The company also extended a hiring freeze through Q1 2023. Meta saw $10B in losses YTD from the company’s metaverse investments, centered around VR headsets. While Meta will invest in a few “high-priority growth areas,” Zuckerberg said he expected the company to remain stable or even shrink more by the end of 2023.

what we’re following 👀

This week, we’re using this section to feature the true chaos that ensued when trolls took advantage of Twitter’s new verification policy to impersonate brands (this guy made a viral TikTok on how he did it with a fake Tesla account, if you’re curious).

The core of the issue was this: if you were scrolling through your feed and saw a tweet from an account with a logo, a somewhat legit-looking name, and a blue check, you’d assume it came from the real brand. Unfortunately (or fortunately, if you’re chronically online and enjoy pandemonium), that wasn’t always the case:

Ryan Lackey @octal

Thank you Elon, it has all been worth it for this.

Brendan Keefe @BrendanKeefe

‘Verified’ Eli Lily twitter account promises free insulin. People are celebrating. It is t remotely true. Someone just paid Elon Musk’s $8

Read Jackson Rising by @CooperationJXN @JoshuaPHilll

3. Roblox??

Gerald Butts @gmbutts

Why would advertisers have concerns about the new Twitter? 🤔

For what it’s worth, we’re both Twitter Blue subscribers and bullish on the platform in the long-run. When you’re moving fast and making big changes to a company at Twitter’s scale, it’s nearly impossible for things to go perfectly (as Musk himself said, there will be “dumb things”). We’re looking forward to seeing how it all shakes out. One thing’s for sure: it won’t be boring!