Crypto is betting it can beat the SEC in court – Protocol

Crypto is betting it can beat the SEC in court – Protocol

Blockchain Crypto Market Technology
July 13, 2022 by Coinvasity
With regulations unclear and legislation slow in coming, companies see litigation as a way of cementing favorable treatment.Litigation has emerged as an important tool for crypto.When the SEC shot down Grayscale’s pitch for a bitcoin spot ETF, the crypto investment firm could have given it another try by filing a new proposal. But Grayscale was

With regulations unclear and legislation slow in coming, companies see litigation as a way of cementing favorable treatment.
Litigation has emerged as an important tool for crypto.
When the SEC shot down Grayscale’s pitch for a bitcoin spot ETF, the crypto investment firm could have given it another try by filing a new proposal. But Grayscale was bent on going to court, the company signaled. And it’s not the only company to adopt an aggressive legal posture against a regulator.
Litigation has emerged as an important tool for crypto as it wrestles with unclear rules and a slow legislative path to clarity. Grayscale’s legal offensive and other disputes bubbling up shows how important the courts have become for settling disputes with regulators like SEC. In many cases, outcomes of court battles could have far-reaching consequences for the industry — especially if crypto companies win.
Grayscale CEO Michael Sonnenshein had talked about his company’s plans to lawyer up weeks before the SEC’s decision. He said the company hired prominent Washington attorney Donald Verrilli to prepare for a legal battle. Chief Legal Officer Craig Salm said “the court is the natural next step for us to take.”

“We’re at a stage where we have disagreement over how the existing regulations are being interpreted,” Salm told Protocol. “We can’t go to Congress … We can’t do nothing.”
There is a long history of the courts shaping how financial rules are interpreted. The Howey Test that the SEC still uses to determine whether an asset is a security is derived from a 1946 Supreme Court decision about orange groves.
Victory is never assured, but the courts can offer an outlet for well-funded crypto companies to flex their resources. “If you have enough money to file or defend enough lawsuits, you can more easily wear down your opposition, even if they are a major regulator, and even if you lose, you can win in the long term if the decisions made chip away at the regulatory apparatus itself,” said Mark Hays, a senior policy analyst on fintech at Americans for Financial Reform, a group that has advocated for stronger consumer protections in crypto regulation.
Marc Fagel, a former San Francisco regional director for the SEC, noted that companies that “proactively sue the SEC for its rules or status denials” will find that “the current Republican-dominated courts are favorable for them.”
The crypto industry is eyeing a fresh legal opening with the Supreme Court decision limiting the ability of the EPA to draft regulations related to climate change, a ruling that some think could have wide-reaching implications for all federal agencies.
The ruling “challenges the regulation by enforcement approach that the digital asset industry has been forced to navigate,” Perianne Boring, founder and CEO of the Chamber of Digital Commerce, a major crypto lobby group, said in a tweet the day the decision came out. “Without clear Congressional authorization, federal agencies must tread carefully,” she added.
It’s not clear how the EPA decision will affect crypto cases. Todd Phillips, director of financial regulation and corporate governance at the Center for American Progress, pointed out that the Supreme Court’s ruling is focused on the authority agencies have to address major questions not directly assigned by Congress.

“If an agency is trying to tackle some new issue that it has never tackled before — an issue that it seems Congress did not really intend for the agency to address — then courts are going to look at it,” Phillips said. But the SEC has long regulated securities, and has taken the position that many crypto assets are securities, “so it is not like the SEC is trying to address a problem it has never addressed before,” he said.
Fagel, who represented some crypto clients when he worked in the private sector, speculated that the ruling could even prompt more enforcement measures, “at least until the courts push back on the SEC’s interpretation of current securities law.”
That’s what Grayscale is hoping for in its lawsuit.
A Grayscale victory could open doors for other industry players that see a bitcoin ETF as a way to open crypto to more investors. The SEC has consistently rejected the proposals, citing concerns that investors would not be adequately protected from fraud or market manipulation.
Another closely watched legal brawl is the SEC suit against Ripple, which the regulator accused of failing to register $1.4 billion of XRP as securities. The lawsuit, which was filed in 2020, was damaging to Ripple, causing the value of XRP to fall dramatically.
But the legal battle is now seen as a potential turning point for crypto. If Ripple wins, it could weaken the SEC’s argument that most cryptocurrencies should be registered as securities.
“That could open the door for other other tokens out there being deemed not to be a security,” Fagel said. “It could shrink the SEC’s jurisdiction.”
But litigation can also be risky for crypto companies. Cathy Yoon, chief legal officer at MPCH, cited the costs of pursuing legal action if a case drags on. “In the end, even though you’ve won, you might not be able to continue” in business, she said.
Legal costs are rising at a time when the crypto industry could be facing more lawsuits from investors and consumers reeling from the market meltdown.

Roughly half of the more than 400 crypto-related court cases tracked by the law firm Morrison Cohen since 2014 were private cases: either a person suing a company or a company suing a person or another firm. Jason Gottlieb, a partner at the firm and lead author of the firm’s Cryptocurrency Litigation Tracker, said private actions are the fastest growing form of crypto litigation.
Some private lawsuits have focused on regulatory questions. Coinbase, crypto lender BlockFi and Solana Labs have each been hit with lawsuits from users or investors alleging, in part, that the companies offered unregistered securities.
Katherine Dowling, chief compliance officer and general counsel at Bitwise, said litigation can be “an avenue” for a crypto company. But “I don’t see it as the most efficient avenue.”
“I could see companies taking that step because the regulatory environment is not clear,” she told Protocol. But court rulings are typically based on the facts of a specific case, which can limit their application.
Legislation and clearer regulations, drafted in consultation with the industry, are still the preferred path, she said: “It shouldn’t only be enforcement actions. There needs to be dialogue and more definitional clarity, so that businesses that are trying to do the right thing have a clear path forward.”
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Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at or via Google Voice at (925) 307-9342.
To succeed as an enterprise platform, Zoom will need to land more enterprise customers, expand internationally and execute on its non-video products. That task will be much harder now that its pandemic-fueled growth is slowing down.
Zoom now has the chance to make a change from the reactionary posture it had to adopt to keep up with soaring pandemic demand.
Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She’s based in Los Angeles and can be reached at
After an explosive IPO and increased demand for video tools spurred by the onset of COVID-19, Zoom enjoyed a rocketship trajectory leading into early 2022. But two years after the worst of the pandemic seems to have subsided, Zoom’s future isn’t as certain.
While CEO Eric Yuan laid out plans to turn Zoom into a true platform player, a falling stock price, failed acquisition and unmet investor expectations have threatened those ambitions. Now investors are questioning whether Zoom can succeed without the pandemic’s windfall.
“We’ve executed through the pandemic well, and I think that our employees did phenomenally, but it was reactionary,” said CFO Kelly Steckelberg. “Now we’re in a place where we get to shift, and we are shifting, to being proactive, and setting the stage for what we want the company to look like a year from now, two years from now, five years from now, 10 years from now,” she said.

The question facing Zoom now is, what’s next? Acquisition options that were once available thanks to its high-flying stock price are gone, and powerful enterprise platforms like Microsoft and Salesforce are taking direct aim at its core video service.
In response, Zoom has been doubling down on its platform vision by launching an array of products and new features. From enterprise phone system Zoom Phone to Zoom Contact Center and hybrid event platform Zoom Events, the company is aiming to become a one-stop destination for all things communications and collaboration.
Zoom’s 2019 IPO, in which the company raised more than $350 million and saw its market value soar to $16 billion, was a blockbuster. But the real growth was still yet to come. When the pandemic hit in early 2020, suddenly consumers and enterprises everywhere were faced with the challenges of communicating with friends, customers and investors remotely.
Out of crisis came opportunity. The technical edge Zoom had in its video technology, its cloud-native architecture and a savvy marketing strategy enabled the company to accelerate past its competitors, according to company followers who spoke with Protocol. Between the fourth quarter of fiscal year 2020 and 2021, Zoom’s customer base grew a blistering 470% to more than 460,000 customers, while revenue grew at a staggering 369% year-over-year to $882 million for the quarter.
Bolstered by sky-high growth during the pandemic, CEO Eric Yuan set out to turn Zoom into a major platform player by expanding beyond its core video product.
“We’re not only a video conferencing company anymore,” Yuan told investors during an earnings call in March of 2021. At that point Zoom already had its fast-growing Phone product, and in July of that year would go on to launch Apps and Events. Later that year it also announced plans for its Contact Center (called Video Engagement Center at the time) and Whiteboard products, amongst others.
But the party was drawing to a close. As the pandemic began to ease and workers returned to the office, Zoom’s growth began to slow more than expected by investors who maybe should have known better, and the stock price began to reflect that.

From the fourth quarter of fiscal year 2021 to 2022, revenue growth slowed to 21% year-over-year. While still healthy compared to Zoom’s enterprise-tech peers, it was a far cry from the heyday of the pandemic. And last quarter, year-over-year revenue was up only 12%.
That sort of late-pandemic shock was expected to some extent, but not in such a drastic manner. “I think what is a surprise to investors, and this is reflected in the stock price, is how quickly things slowed down and how dramatically. I think people were expecting growth to be 30%, not mid-teens,” said Rishi Jaluria, managing director at RBC Capital Markets.
In many ways Zoom’s explosive growth during the pandemic may have been its Achilles’ heel. While the number of customers more than quadrupled, the company also seemed to have captured its entire target market — a concern investors have held for a while. “It’s renewing questions of No. 1, did they just pull forward all of their [total addressable market], and No. 2, if that’s the case, how do they grow from here?” asked Jaluria.
The natural approach would be by expanding into new markets and products, which explains Zoom’s vision for becoming a platform player. But Zoom has had a number of setbacks along the way.
Not long after the company announced its plan to expand into the contact center space, its acquisition of cloud-based contact center company Five9 fell through. Zoom announced its all-stock offer for Five9 in July of 2021, but by the time the deal was supposed to close, Zoom’s stock price had plummeted almost 30%. Five9 shareholders felt the purchase price was undervaluing the company and subsequently rejected the $14.7 billion deal, forcing Zoom back to the drawing board.
To many, the failed Five9 acquisition was a major miss. “Five9 is on a roll right now and that would have enabled Zoom to strengthen its portfolio and provide more of a platform approach to their clients,” said Steven Dickens, a senior analyst at Futurum Research.
Zoom’s platform vision is also under serious threat from competitors who can offer video capabilities alongside broader and more robust collaboration products.

“You can argue whether there is parity or not, but it is coming up,” said Nagraj Kashyap, who was head of Qualcomm Ventures when the firm invested in Zoom and is now a managing partner at SoftBank’s Vision Fund.
In Zoom’s core video space, companies from Google to Microsoft and Cisco, have all improved their video conferencing technology. “At some point in time, the difference is not that much for somebody to choose one or the other,” he said.
The fact that Zoom’s competitors, such as Microsoft, Cisco and Salesforce (thanks to Slack), also have an entire array of collaboration products at their disposal, makes it even more imperative that Zoom get it right when expanding outside of its core product.
“We have seen the likes of Microsoft and Cisco invest in their offerings, and they have broad and deep relationships with their clients so they have the ability to upsell and cross-sell their collaboration solutions,” said Futurum’s Dickens.
Although Zoom has grown from the core Meetings video service to also include Phone, Events and Contact Center among its other products, the question remains whether that will be enough to turn the company into a true platform threat.
If Zoom can succeed, the rewards are high. “I think if they can execute on both sides of the equation, I can see them getting back to 20% growth,” said Jaluria.
Zoom’s most mature non-core product, Zoom Phone, which was launched in 2019, will be key to that growth. From the last quarter of fiscal year 2020 to a year later, Zoom Phone tripled its customers from nearly 3,000 to more than 10,000. And as of last quarter, the company sold more than 3 million seats.
Part of the reason for that growth is the fact that Zoom Phone is built on the same infrastructure as Zoom Meetings, and it doesn’t take much to add it into the mix. If a customer already has Zoom Meetings installed on their desktop or phone, it’s as simple as adding another icon, said CFO Kelly Steckelberg.

The other factor is that communications infrastructure has been surprisingly slow to move to the cloud, a parallel Zoom Phone shares with Zoom Contact Center, which the company launched earlier this year. “When I’ve talked to CIOs about their phone systems, it seems to be sort of one of the last areas. It’s kind of phone and contact center, which are the last areas that they have taken on in terms of moving from on prem to the cloud,” said Steckelberg.
Despite some setbacks, Zoom still has opportunities in the contact center space. But don’t expect Zoom to make another run at acquiring an entire contact center company. “What I think you should expect to see is acquisitions that continue to support and accelerate the build out of [existing] functionality,” said Steckelberg, pointing to the company’s acquisition of AI startup Solvvy as an example, “not necessarily bringing in a whole [new] contact center,” she said.
I think that’s unfortunately not great news for Zoom because it is very hard to build a contact center software solution from scratch, because you cannot get away with good enough when it comes to contact center.
Still, it won’t be easy to compete with the likes of large dedicated contact center players such as Genesys, NICE inContact and, yes, even Five9. “I think that’s unfortunately not great news for Zoom because it is very hard to build a contact center software solution from scratch, because you cannot get away with good enough when it comes to contact center,” said Jaluria.
While Zoom Contact Center likely won’t be a huge growth driver in the short term, there could be a longer-term play. “It’s very early stages but I expect that product will follow a similar trajectory as Zoom Phone and really continue to grow and develop over time,” said Steckelberg.
Both products will likely play a role in the traditional “land-and-expand” enterprise sales strategy Zoom has been employing with customers. So far that strategy has been successful. Last quarter, enterprise revenue grew more than 30% to $560 million, with nearly 200,000 customers on board.

Zoom is also trying to make it easier for enterprise customers to buy more services with its Zoom One bundle, an attempt to help enterprises consolidate vendors.
Another growth area for Zoom, and one where it may be able to best its competitors, is in international markets. In fact, Santi Subotovsky, a partner at Emergence Capital, first discovered Zoom when he was searching for a reliable way to video chat with his aunt in Argentina. Noticing Zoom performed better than other software, Subotovsky went on to lead the firm’s investment in Zoom.
Even today, Subotovsky doesn’t think other video tools can compete with Zoom internationally. “When you take them to markets where the hardware is not the latest and connectivity is not the greatest, it’s a hard experience. It’s almost like creating that second- or third-class experience,” he said.
The opportunity isn’t lost on Zoom.
“There are many markets around the globe that are still in earlier stages than the U.S. is in terms of just video adoption in general,” said Steckelberg. That’s why Zoom is investing in its global sales capacity, expanding payment types to include local currencies and assessing pricing and packaging for international markets, she said.
So far, Zoom’s international business has performed well. Although growth stalled in EMEA last quarter, likely due to the war in Ukraine, APAC grew 20% year-over-year, and together Zoom’s international markets make up more than a third of its revenue.
Despite a number of setbacks and lowered market sentiment, the numbers show Zoom is still a growing SaaS company with an expanding product line and healthy revenue. In addition to solid revenue growth, Zoom is also profitable, and had billions in cash on hand last quarter.
Overall, investors and analysts agree that Zoom is a sound business. “The market is just recognizing that: Nothing is wrong with Zoom as a company; it’s a fundamentally good company,” said Kashyap.
However, it’s not hard to see Zoom’s pandemic experience as a missed opportunity. It now has the chance to take more of a long-term view, a change from the reactionary posture it had to adopt to keep up with soaring pandemic demand.

That has spurred the company to heavily invest in research and development, hiring for more engineering and product roles and increasing sales capacity both locally and globally, said Steckelberg. “We’re taking the long view here,” she said. “We’re building for a $10 billion software company and beyond, that’s the focus that we have here.”
Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She’s based in Los Angeles and can be reached at
Many people might think of the Google Play Store when they want to download a new app. But the Google Play Store is much more than that: It creates revenue for small businesses and provides jobs for many employees at those businesses. Google Play connects developers with over 2.5 billion monthly active users around the globe, helping to generate over $120 billion in revenues for developers, to date.
Purnima Kochikar, Vice President, Google Play Partnerships
As part of an exclusive fireside chat, Purnima Kochikar, Vice President, Google Play Partnerships, sat down with Protocol to discuss how Google helps developers succeed by giving them the tools to turn ideas into apps, build an audience to receive those apps and get feedback needed to create the best possible app to change people’s lives.
What do you find most gratifying about your role overseeing all aspects of the Google Play app ecosystem?
We started as a very tiny team, and over the past 10 years that I’ve been at Google, we’ve generated over $120 billion in revenue for developers, many who are entrepreneurs or work at small businesses.
I have the best job in the world – it is a huge responsibility and incredibly humbling. It’s also inspirational to provide business and technical consulting to help developers build apps that change people’s lives.
Because we sit on a large platform, we can look at best practices and guide developers to the best tools and technologies. We also have generated 2.5 billion monthly active users, which creates a ready-made global audience for the amazing creativity of app developers.
I’ve always said that Android and Google Play are blank canvases, and developers are the artists who paint on them. I love seeing how developers turn ideas into reality.
What have you learned while leading the Google Play Store?
One of the most important things that I’ve learned is that imagination and creativity are not constrained to the places where we think they are. You always think about Silicon Valley. We think about New York. We think about London and the big cities. But our developers come from everywhere — most are also small businesses, like the brick-and-mortar companies you see in your town or neighborhood. You can have a great idea sitting in Nashville, Tennessee, or San Diego, or New York, or San Francisco. But when you offer those ideas through Google Play, you have a global audience waiting for you.
One of my favorite examples is GoNoodle, which is a small business in Nashville. A creative entrepreneur there saw joy when people get together and get healthy. Now, 95% of elementary schools in the U.S. use the app, which shares interesting ways for kids to get moving and focus on their health. This level of reach would have been unthinkable in the past, but now the app builder has the platform and distribution model to give all schools access to the app.
You mentioned developer creativity. Let’s talk about the role that creativity plays in the app development process.
Small businesses have amazing ideas. And they really understand their customers. They want to create truly amazing apps and really focus on their uses. But some stumble with the practical reality. We give developers the tools and technology to turn their creative ideas into apps that users can download and then use to change both their lives and their users’ lives.
One of the ways that we help small businesses succeed is Google Play Academy, which is a self-serve education platform. A developer anywhere in the world can access our videos, blogs and tips to understand how to both build and publish a great app. Because small companies don’t have lengthy testing times like bigger companies do, we also created the alpha-beta program where a developer can invite users to test their apps. We also provide tools and templates, such as pre-registration, to help generate an audience for their app before it’s even published.
The statistic that I’m most proud of is that in 2021, more than 2 million jobs existed in the United States, thanks to Android and Google Play. These aren’t jobs at Google, these are jobs that exist because developers grew their small businesses after publishing apps on the Play Store.
Many small businesses were hit especially hard during the pandemic – did you see any effects of that for the Google Play ecosystem?
During the past two years there has been a big debate between life and livelihood. A lot of people had to make a choice between the two. Those who could work from home didn’t have to make that hard choice because we could have both life and livelihood — and tech was the reason people could have both.
Mobile apps let small businesses digitize, pretty much overnight. We saw small restaurants use apps to make food delivery possible so people could stay home and order food. The apps helped them stay open and even created new jobs, especially in delivery. During the pandemic, most of the delivery apps in the Play Store hit 10-year KPIs – meaning that they saw engagement in just two years that most apps take 10 years to hit. It’s been truly fascinating — and truly humbling — to see what apps made possible in the middle of some of the worst times of our lives.
You’ve shared several differences in the apps and developers — location, size, ideas. Is there something that most apps have in common?
Each app developer truly focuses on a problem that’s near and dear to their heart, something that sparked their imagination, or something they feel deeply about. They each truly believe that they have a solution to make their community, their country, or the world better – and they aspire for their app to be used by a lot of people – they want to succeed.
Interestingly, most app developers with apps in the Play Store are actually small businesses, and they’re experiencing the benefits and challenges that come with starting out — even today’s big businesses started as small businesses.
People often ask me if they can succeed, because they don’t see other successful people who look like themselves. We need more women starting companies. We need more underrepresented groups starting companies. So, we are investing in this area. We want to make sure there are more people and companies like each of us on Google Play — so that the next kid who has a dream believes that they can be successful with their app.
I’m super excited about a program we launched in 2017 called Change the Game. Many people are surprised to learn that in 2020, 41% of people playing digital games were women. We still need more people to build apps for women. We want women and girls to know that they can create games, and so with Change the Game, we’re helping them build game apps – helping to support and empower women as game players and creators. We want to help developers succeed, and this is one of the many ways we are doing that.
When researching for this article, I was surprised that 97% of developers do not pay any fees to Google Play. What are some other things that people get wrong about Google?
Many people don’t realize the many ways developers benefit from Google Play and that the core DNA of Android is open. From the minute that developers get a creative idea, they have every tool they need to build the app, understand the security policies, launch the app and gain a global audience.
Another common misconception is that apps must be downloaded from a single location. But there are alternative app stores that are available on Android — and developers can distribute their apps through a website, meaning their creativity is not constrained. Developers have choices about where to distribute.
Most importantly, I truly want people to get to know the developers and the value that they’re finding on Play. You can read their amazing stories on our We Are Play site. Take a few minutes and download their apps to see firsthand how they can help you change your own life.
A new GLAAD report finds that the biggest social media companies still lack basic policies to protect LGBTQ+ communities.
“The entire industry is failing LGBTQ people when it comes to security.”
Kwasi (kway-see) is a fellow at Protocol with an interest in tech policy and climate. Previously, he covered global religion news at the Associated Press in New York. Before that, he was a freelance journalist based out of Accra, Ghana, covering social justice, health, and environment stories. His reporting has been published in The New York Times, Quartz, CNN, The Guardian, and Public Radio International. He can be reached at
Tech giants spent the month of June touting their contributions to LGBTQ+ communities around the world. But a new report from GLAAD finds that the five most popular social media platforms — Facebook, Instagram, Google, TikTok and Twitter — have policies that make their platforms unsafe for LGBTQ+ users.
GLAAD’s Social Media Safety Index, which is in its second year, scored Facebook, Twitter, YouTube, Instagram and TikTok on a range of policies, from prohibiting targeted deadnaming and misgendering of transgender and non-binary people to offering queer-specific training to content moderators. None of the platforms scored higher than 50% against GLAAD’s benchmarks.
“The main takeaway from all this is that the entire industry is failing LGBTQ people when it comes to security,” said Jenni Olson, senior director of the GLAAD Social Media Safety Index. “The biggest target, particularly in recent months, has been trans folks.”
In recent weeks, the actor Elliot Page has been the subject of targeted misgendering and deadnaming by conservative commentators on Twitter, leading to the actor’s deadname appearing in the top trends, despite the platform’s own policy banning deadnaming. Offline, hate crimes against trans people are rising. In 2021, the Human Rights Campaign recorded fatal violence against 57 transgender and gender-nonconforming individuals in the U.S. In England and Wales, government statistics showed that hate crimes based on sexual orientation doubled between 2016 and 2021.

While all of the companies have written policies stating their commitment to LGBTQ+ users, some of them lack even the most foundational policies that GLAAD says are crucial to keeping that commitment. YouTube, Instagram and Facebook, for instance, have no policies against targeted deadnaming on their platforms. Twitter and YouTube, meanwhile, failed to meet GLAAD’s standards on both training for content moderators and having specific features for users to add pronouns to their profiles, along with privacy settings that control who sees users’ pronouns.
GLAAD scored the companies, which are all current or former financial backers of the organization, based on their publicly stated policies, not their enforcement of those policies, which is not easily measurable by outside researchers.
GLAAD’s findings build on a survey of hate speech online by the Anti-Defamation League, which found that 66% of LGBTQ+ respondents have experienced harassment online, with 53% of respondents attributing the harassment to their sexual orientation.
Google didn’t respond to Protocol’s request for comment. TikTok spokesperson AB Obi-Okoye said in a statement that the platform is “committed to supporting and uplifting LGBTQ+ voices, and we work hard to create an inclusive environment for LGBTQ+ people to thrive.” Meta spokesperson Erin McPike said, “We prohibit violent or dehumanizing content directed against people who identify as LGBTQ+ and remove claims about someone’s gender identity upon their request. We also work closely with our partners in the civil rights community to identify additional measures we can implement through our products and policies.” And Twitter spokesperson Elizabeth Busby said, “We are committed to combating abuse motivated by hatred, prejudice or intolerance, particularly abuse that seeks to silence the voices of those who have been historically marginalized.” Busby noted that GLAAD serves on Twitter’s Trust and Safety Council.

This year is the first that GLAAD is assigning specific scores to the platforms. Last year, the organization determined that all the five platforms “are categorically unsafe” and would receive failing grades. Since then, TikTok agreed to update its policies, adding the prohibition of “content that targets transgender or non-binary individuals through misgendering or deadnaming.” But progress has otherwise been largely stagnant.
Outside the U.S., tech companies also face new legislation and pressure that could lead to further censorship of LGBTQ+ users, including in Ghana where a proposed law would ban positively discussing queer life online, and in Saudi Arabia, where the government successfully pressured Amazon to remove LGBTQ+-related products and books.
GLAAD recommends that all platforms institute policies banning targeted deadnaming and misgendering and prohibiting advertising based on information about users’ sexual orientation and gender identity. The organization is also calling for increased transparency by the platforms themselves. But Olson argues the U.S. government needs to step forward on the regulatory front as well, pointing to the EU’s GDPR legislation, which governs how tech companies collect and use customer personal information, and the recently approved Digital Services Act that would police harmful content online.
“The time has come for regulatory solutions, industry oversight,” Olson said. “Social media platforms and so many other tech firms are underregulated, and that’s part of the reason that they are so unsafe.”
Kwasi (kway-see) is a fellow at Protocol with an interest in tech policy and climate. Previously, he covered global religion news at the Associated Press in New York. Before that, he was a freelance journalist based out of Accra, Ghana, covering social justice, health, and environment stories. His reporting has been published in The New York Times, Quartz, CNN, The Guardian, and Public Radio International. He can be reached at
Micha Kaufman spoke to Protocol about the future of work, talent as a service and the “inflection point” of the freelancer market.
Sarah (Sarahroach_) writes for Source Code at Protocol. She’s based in Boston and can be reached at
The latest studies suggest that the freelance market took a breather in 2021 after years of rapid growth. But Fiverr CEO Micha Kaufman, who founded the company in 2009 and saw it through its IPO a decade later, said there’s lots of growth ahead.
“[T]he beauty about our business is that as successful as it is right now, it’s still at a pre-inflection point. This is why I’ve been doing this for about 13 years, and I’m more excited today than I was 13 years ago,” Kaufman told Protocol. Before starting Fiverr, Kaufman helped found, an Israeli news site, and Accelerate, a think tank.
Just before the start of the pandemic in 2019, the number of buyers using freelancers on Fiverr was up 14% year-over-year to 2.2 million. That number has been steadily increasing in the years since: The number of active buyers grew to 4.2 million by March 2022.

But Kaufman said the number of companies using freelancers only represents “a tiny portion of the addressable market” in the U.S. That may change as businesses’ attitudes about using freelancers for projects shift, along with workers’ interest in taking up freelancing full-time. According to Fiverr’s Freelance Economic Impact Report, half of freelancers saw an increase in demand for their services in the past 12 months. Kaufman said these changing dynamics will push freelancing into the mainstream in the coming years.
This interview has been edited for clarity and brevity.
Much of the conversation about the future of work deals with regular paycheck jobs. How does Fiverr think about the future of work?
I think we’re in many ways the poster child of remote work because that’s the type of marketplace that we power. And we work the majority of the week remotely as well. I think one of the interesting things that happened, and this was largely because of the pandemic and the fact that it forced everyone to at least give [remote work] a try, is the fact that more and more businesses are up to understanding that there should be less focus on people’s time and more focus on people’s output.
What happened throughout the global lockdown was a situation where businesses lost their ability to track when their actual team members or employees are actually working. And lo and behold, that was not a terrible thing. Activity didn’t go down. It actually, in many cases, increased. And that lack of control over people’s time was less and less important, and it was replaced with focus on output. And I think that this is what we’ve been advocating for many, many years.
The other thing is that I think that the pandemic has just created this pull-forward effect on something that would have happened anyway. This is not about these black-swan events. It’s all about the fact that it’s a generational change, what’s happening in the workplace. It’s driven by the younger population. So it started in 2010 when millennials joined the workforce. By the end of this decade, 2030, millennials are going to be 75% of the workforce, which means that the way they like to work is the way everybody’s going to work because they’re going to be the vast majority, and Gen Z has followed.

“What happened throughout the global lockdown was a situation where businesses lost their ability to track when their actual team members or employees are actually working. And lo and behold, that was not a terrible thing.”
I think that the younger generation has brought this new way of thinking, and this is why stats show that by 2030, 50% of the U.S. talent is going to be engaging in freelancing, which is incredible, because this means that for companies, half of the talent is not going to be up for full-time hire. And that pushes companies to think differently about how to engage with talent in general.
Fiverr is creating this operating system that will allow or liberate access to talent and integrate that talent into the businesses’ workflows. It’s as easy as using cloud computing these days. It’s with a few clicks of a button. And we’re seeing more and more companies adopting this change and taking steps to ensure that they can benefit from the flexibility that that gives them.
As companies start to get more and more on board with this idea of talent as a service, how has the number of companies using Fiverr evolved?
We’ve seen a massive increase in growth … If we look at just the past 12 months, there have been 4.2 million businesses around the world, about half of them in the U.S. … That’s about 2 million out of 31.7 million small- and medium-sized businesses in the U.S.. So it’s still a tiny portion of the addressable market. The opportunity to grow is just massive, and we think it’s the early innings of this market.
It always reminds me of the early days of ecommerce when ecommerce was still low single-digit percentage penetration. And it was obvious that this would become a force in business, but it was just a matter of time and educating the market. And once it happened, it actually went through an inflection point. And the beauty about our business is that as successful as it is right now, it’s still at a pre-inflection point. This is why I’ve been doing this for about 13 years, and I’m more excited today than I was 13 years ago.

I want to talk about the Togetherr service that was just announced. It’s been described as “fantasy football meets advertising.” How would you describe it?
Talent doesn’t want to work with the same brands over and over again. So they start departing from agencies and start to freelance on their own. Customers are coming, and they understand that they have a variety of different needs and they don’t want the same agency to do everything because as talented as any agency can be, they don’t have access to all the talent in the world. They have access to the talent that they employ.
“We’re trying to provide all of the tools necessary to run your business so you can focus on the things you’re really good at.”
What we realized was that this presented another opportunity to disrupt the market by liberating access to talent in creating these on-the-fly dream teams that can actually do a project for you.
In essence, what we do is we understand the very little details or attributes of every talent and know how to connect those talents together to form groups that will work on your project and then get this assembled.
With the rise of remote work, workers have a less clear divide between work and life. Fiverr provides some tools to help freelancers manage their time. Are there any plans for growth in this space?
Absolutely, yes. We believe that much like the way we work, everybody else should have a reasonable balance. And, and by the way, that balance shifts throughout the years and how you build your career. If you asked me, I don’t remember my 20s and 30s. I worked so hard. And I don’t regret it because this was my decision. And it was important for me to build something very large. But this is not the only way to build your career. And everybody should choose their own path. And for us, what’s really important is that people would not spend time doing things that they shouldn’t be doing.

What do freelancers’ tool stacks look like?
If they use Fiverr, the ambition we have is that they don’t need to use other tools to run their business … As much as we can take away from what’s not necessary to do, we provide. So if you think about Fiverr as a platform, freelancers don’t deal with anything that has to do with contracting, invoicing, figuring out how to exchange information and data files. There’s no need to deal with NDAs, no need to deal with storing and retrieving work. All of that is baked into the platform. So they get super detailed reporting about their performance. So they can figure out where they can do better.
We have products that allow freelancers to also manage their business, even if they have business outside of the platform. We have a product called Fiverr Workspaces. That product allows freelancers to send invoices, send proposals, get paid and so forth. We’re thinking about this holistically. We’re trying to provide all of the tools necessary to run your business so you can focus on the things you’re really good at.
At what point do you think the company will reach that inflection point you mentioned earlier?
It’s the $1 trillion question. It’s very hard to say how general awareness progresses. And again, if I go back to my comment about ecommerce, it took ecommerce about two and a half decades to reach 10% of commerce. Why didn’t it happen faster? Because it’s a tectonic change. it takes time to educate people: “Why are you spending about a month trying to find a freelancer when you can go on Fiverr and, on average, it takes between five and 15 minutes?” Why? Well, it takes time. And the larger the businesses are, the slower they move. The slower they adopt new things. On the small- and medium-sized businesses, they’re super agile, they’re super flexible. They will use whatever the new thing is. And as we go up market, as we go to larger businesses, obviously those changes are slower. I don’t think we’re far from that point.

I was talking about the younger generation that came in. That younger generation that came in in 2010 is now 10 or 12 years into the workplace. They’re becoming managers. They know how to use those systems. So I think that in many ways, we’re probably closer than ever to that inflection point. And we’re definitely pushing like everything we’re doing, from creating awareness campaigns as Super Bowl ads or working with our community to spread the word.
Sarah (Sarahroach_) writes for Source Code at Protocol. She’s based in Boston and can be reached at
Pitch President Nicholas Mills shares the leadership team’s strategy over the past few months.
Pitch’s president, Nicholas Mills, told Protocol about the company leadership’s strategy.
Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at
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Nicholas Mills is the president of Pitch, a productivity startup set on toppling PowerPoint. The series B startup has been in growth mode for most of its existence, but like most startups, the last few months have been a challenge. Mills saw the warning signs, and it was clear: The tech industry was quickly approaching the end of its bull run.
Here’s how he decided to pause hiring for all but backfill and a few select roles so that they could refocus on key growth areas and extend their runway by a full year without having to let anyone go.
Mills’ story, as told to Protocol, has been edited for clarity and brevity.
I joined Pitch in the early part of this year, but I had already noticed that market conditions were starting to shift in late November and into December. We were in this massive, inflated tech investment market with a large amount of market hubris. It felt very bubble-like. As we came into 2022, we saw rising energy prices, the war in Ukraine and an upward inflection in the pace of inflation. By March and April, some companies were running into an earlier need to raise capital, raising either a flat or a down round. That was further validation for us.

Tech companies are valued based on a multiple of future revenues, discounted by inflation and interest rates. If interest rates are going up in response to inflation, then the future values for startups will be less. The world started to see the impact on public tech companies: Zoom, Netflix, Tesla, they all pulled back by as much as 75% by spring. The private, VC-backed companies — particularly in the mid- to late stage — are valued based on comparable public companies.
As the saying goes, things are neither good nor bad: They just are. So we quickly reevaluated our financial plan. When I was talking to Pitch late last year about joining, there were about 120 people. And we’d hired a lot late Q4 and early Q1, where we added 40% to 50% extra head count, setting us at about 170 to 180 people. We decided we needed to reoptimize our plans around ROI and growth.
We networked. [CEO] Christian [Reber] talked to other founders, our investors, to get a sense of what’s happening. I spoke to other founders in my network, other companies at our stage. Our objective was to extend our runway by a year and minimize our [operating expenses] and costs. How do we redefine where to invest with growth in mind?
Ultimately, it was a group decision. It was me, in charge of go-to-market, sales and marketing; Christian, who as CEO also owns the R&D line; Adam [Renklint], our CTO, who’s responsible for our head count alongside Christian; [and] Åsa [Lidén], our COO.
We whiteboarded. Our first option was to do nothing. The second was to cut and streamline costs but not reduce head count. The third was to reduce head count. Head count is the major contributor to costs for a startup like us. We decided we strongly did not want to cut heads. It was a personal decision for the company. We were confident in our product and engineering resources, so we capped our hiring there.

We took quick action. When we shared the plan with our investors, they were impressed with the fact that we had moved so quickly. And we were quickly able to remove discretionary spend in areas that didn’t drive growth.
We Slacked. We decided to collaboratively put together a written overview of the rationale behind the financial plan, drafted a message and posted it in our Slack channel. We staged the announcement first to managers and leaders within the company, followed by the whole company in an all-hands on Zoom. Transparency was part of the DNA of Pitch. People felt heard and understood because they had the opportunity to ask questions.
There’s an opportunity cost to having to spend so much time hiring. The thing that’s landed well internally is that we can now use all of our resources to focus on building great products. 50% of my time at [my previous company] CircleCI the first year was spent hiring. Some people [at Pitch] were quite pleased to devote 100% of their time to building great products.
Plan for the worst. Because we responded quickly, that got us onto the front foot. I know startups that are not taking action, and I think that’s risky. Have a clear grasp on your costs, the levers that are going to drive growth, and then run through some scenarios where you do worse or better, or the market conditions do worse or better.
We’re constantly evaluating where we are. As recently as the last couple of weeks, we’ve been refreshing and getting deeper on some of our financial modeling related to how we think our customer base might grow, what impact we’re going to have, as we start to add more maturity into our sales. Don’t consider your plan done and fixed. We’ve got nine scenarios, really. And within those, there are variables that we’re tracking that could change. It’s got to be a constant evaluation.

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Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at
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