Gensler: Bitcoin may be a commodity – Protocol

The SEC has been vague about crypto. But Gensler said bitcoin is a commodity, “maybe.” It’s the clearest glimpse of his views on digital assets yet.
“Bitcoin — maybe that’s a commodity token. That has a big market value, but that goes over there,” Gensler said, referring to another regulator, the CFTC.
SEC Chair Gary Gensler has long argued that many cryptocurrencies are subject to regulation as securities.
But he recently clarified that this view wouldn’t apply to the best-known cryptocurrency, bitcoin.
Gensler told the House Appropriations Committee last week that the SEC has “jurisdiction over probably a vast number” of cryptocurrencies currently in circulation.
“Bitcoin — maybe that’s a commodity token. That has a big market value, but that goes over there,” Gensler said, referring to another regulator, the CFTC.
“I think it’s the clearest statement that I’ve heard yet” from Gensler on bitcoin, Klaros Group Partner Jonah Crane told Protocol.
That’s significant for a regulator who has been criticized for leaving vague which cryptocurrencies would be considered securities and which ones are commodity tokens.
Often, the SEC’s position gets clarified only when officials speak out publicly or when the regulator sues a company.
Gensler’s statement tracks with his predecessor Jay Clayton’s view that bitcoin is not a security, but other digital assets, including cryptocurrencies, that promise a return are.

Gensler also said, “The rules are actually quite clear that if you’re raising money from the public and the public anticipates a profit based on [the] effort of that sponsor — that, entrepreneurs, that’s a security.”
A commodity would be a product like “corn or wheat or gold or oil” which “doesn’t have an issuer, doesn’t have one party sitting there behind it and the public’s not anticipating [returns] based on the efforts of that one party,” Gensler said.
That’s clearly not the case with another cryptocurrency, XRP, the SEC has argued. The agency sued Ripple for failing to register roughly $1.4 billion worth of XRP as securities.
The lawsuit, which was filed before Clayton stepped down in late 2020, argued that Ripple “made it part of its ‘strategy’ to sell XRP to as many speculative investors as possible,” an allegation Ripple rejects.
But the Ripple case threw a curveball at the SEC after it turned the spotlight on another official’s public comments. In 2018, former director William Hinman gave a speech in which he said that ether is not a security. His statement sparked a rally in ether.
Hinman’s speech became controversial after a nonprofit whistleblower group called Empower Oversight recently published SEC emails that suggested that Hinman was working for a law firm that was part of an alliance dedicated to promoting the commercial use of the Ethereum blockchain on which ether trades. Ethereum competes with Ripple’s XRP-based payments system, so Hinman’s work raised questions about his role in voting to sue Ripple.
Ripple has been pressing the SEC to release internal emails and documents related to Hinman’s speech that could shed light on how crypto has been discussed within the regulatory agency. “I think that’s really relevant about how he came about giving that speech,” Ripple General Counsel Stuart Alderoty said in an interview with Protocol last month.
If the SEC loses the legal battle, which is expected to drag on through next year, it could force the regulator to more clearly define its policies in a way that’s boxed in by a court decision. “It’s a high-risk case for them,” Crane said.

But opting to come out with a definitive list of which cryptocurrencies are securities and which ones are commodity tokens can also put the SEC in a “risky position,” he said.
“If the SEC were to declare a bunch of tokens to be securities, it would face legal challenges,” Crane said. “And right now, it’s probably waiting to see how the Ripple/XRP case plays out.”
Congress is expected to play a critical role in coming up with new laws for crypto. Marc Fagel, a former SEC regional director for San Francisco who’s now a lecturer at Stanford Law, said the agency may be trying to keep its options open in how to deal with a fast-changing market.
“I suspect they find the broad, existing parameters of the securities laws give them more flexibility than trying to nail down specific definitions in a relatively new, rapidly evolving industry,” he said.
Those laws could change, too. A new crypto bill from Sens. Kirsten Gillibrand and Cynthia Lummis, promised since March, could come as soon as this week, according to Bloomberg. The bill would split oversight of crypto between the SEC and CFTC along the lines of the SEC’s existing responsibilities for securities and the CFTC’s for commodities.
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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 [email protected] or via Google Voice at (925) 307-9342.
The war for talent rages on, but dynamics are shifting back to the employers.
Compensation packages could start to look different as companies reshuffle the balance of cash and equity.
The market is turning. Tech stocks are slumping — which is bad news for employees — and even industry powerhouses are slowing hiring and laying people off. Tech talent is still in high demand, but compensation packages could start to look different as companies recruit.
“It’s a little bit like whiplash,” compensation consultant Ashish Raina said of the downturn. Raina, who mainly works with startups that have 200 to 800 employees, previously worked as the director of Talent at Index Ventures and head of Compensation and Talent Analytics at Box. “I do think there’s going to be an interesting reckoning in terms of pay increases going forward, how that pay is delivered.”
Sought-after engineers will continue to command large compensation packages. But those packages could start to look different as companies reshuffle the balance of cash and equity.
There’s still a huge shortage of tech talent, and that will push wages up “for the foreseeable future,” said Shankar Raman, global leader for the Technology Industry Group in the Human Capital Business at Willis Towers Watson.

“Compensation levels don’t go down,” Raman said. “What happens is they don’t accelerate at the same pace they’ve been accelerating thus far.”
Raman doesn’t expect a huge, immediate change in pay practices, noting that hiring freezes are more likely as companies recalibrate.
Raina is urging his startup clients to be more conservative and thoughtful about compensation going forward. A relative lack of financial restraints in the last few years, and unprecedented pressure to compete for candidates, left some CFOs “asleep at the wheel,” Raina said.
One client, for example, gave hiring managers too much leeway in deciding how much to offer candidates. Another client’s hiring managers perceived market compensation as “what candidates ask us for,” a mistake when candidates feel empowered to ask for “ridiculous” sums, Raina said.
“There’s a lot of stupidity that was going on that will have to get ironed out,” Raina said. “What gets mistaken for moving fast and being agile and adaptable can then turn into something that looks reckless and loose.”
Companies that have touted geo-neutral compensation — offering similar pay regardless of where the employee lives — might be regretting that decision soon, Raina said, since it gives them one less way to save on pay packages.
In order to stay competitive — and appease investors who will now be more scrutinizing — companies will be looking for other places to cut back, like cushy benefits packages. Raina expects that annual merit increase budgets could also cool off. In the red-hot talent market, those soared from the 3%-to-4% range to between 4% and 6%. But a downturn could reverse that trend back to normal.
Companies offering huge equity packages in hopes of competing against FAANG competitors may want to think again, Raina said. Big Tech companies that are slowing their hiring pose less competition than they did even a month or two ago.
Startups may want to scale back the amount of equity they offer and the number of employees to whom they offer equity as well as the frequency of grants, Raina said. A startup that once offered 60% to 70% of its employees a $100,000 equity grant may choose to cut back, offering half of its employees an $80,000 grant instead.

But there will be variation here. If the market continues to slump, Thanh Nguyen, the co-founder and CEO of the compensation benchmarking startup OpenComp, expects some startups to offer more equity-heavy packages to save on cash. Regardless, companies will need to determine what they can more easily part with: cash or more equity.
Sign-on bonuses are “now gone,” Nguyen said, though Raina pointed out that bonuses could become a bigger lever for larger tech companies.
Layoffs and hiring freezes are most likely to target non-technical roles, Raina said: sales, marketing, recruiting, HR.
“Some jobs are worth more than others,” Raina said. “If you’re in a more technical role, regardless, you’re probably going to be more insulated and protected, and everyone else is going to get screwed.”
This applies to compensation, too. Tech leaders may allocate more pay raises and equity to employees who are less easily replaced and whose work generates more revenue.
Startups that raised funding recently are better positioned than most, Nguyen said.
“If you raised recently and you’ve already banked the money, this is actually a great opportunity to pick up talent,” said Nguyen, recalling Warren Buffett’s advice to get “greedy when others are fearful.”
With hiring freezes in place at some Big Tech companies, Nguyen expects to go up against fewer competing offers when recruiting candidates. As Gem’s Chief Recruiting Officer Rich Cho put it earlier this month, for startups, “recruiting is the most strategic thing you can do right now.”
Pre-IPO companies could lure candidates who don’t see room for growth at their Big Tech jobs, Raina said.
“Startups that have a decent story can actually play this to their advantage,” Raina said.
Qualcomm’s chief sustainability officer Angela Baker on how companies can view going “digital” as a way not only toward growth, as laid out in a recent report, but also toward establishing and meeting environmental, social and governance goals.
Chris Stokel-Walker is a freelance technology and culture journalist and author of “YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars.” His work has been published in The New York Times, The Guardian and Wired.
Three letters dominate business practice at present: ESG, or environmental, social and governance goals. The number of mentions of the environment in financial earnings has doubled in the last five years, according to GlobalData: 600,000 companies mentioned the term in their annual or quarterly results last year.
But meeting those ESG goals can be a challenge — one that businesses can’t and shouldn’t take lightly. Ahead of an exclusive fireside chat at Davos, Angela Baker, chief sustainability officer at Qualcomm, sat down with Protocol to speak about how best to achieve those targets and how Qualcomm thinks about its own sustainability strategy, net zero commitment, other ESG targets and more.
What should companies be thinking about, and what do they need to know, when it comes to achieving climate goals?
There are three things that companies need to know when it comes to setting climate goals. The first thing I would say is that if you’re going to set a climate goal as a business, it needs to be a businesswide effort. It cannot live within just the corporate responsibility or the sustainability team as it often does. It really has to be incorporated across the entire company.

The second is that if a company is going to set a climate target, it needs to be able to commit budget and resources to meeting those goals. It can be expensive to incorporate these goals across operations, so that is something that companies need to be prepared for.
Finally, there must be room for creativity and flexibility. It’s important to recognize there are a lot of things we don’t know yet. You have to be able to jump in without knowing everything, which is hard for a lot of companies. It’s risky, but ultimately worth it.
What’s been the limiting factor to effect change and reach those goals?
Some of the rate-limiting factors are that all these companies are setting targets, whether or not they’re aligned with the Science Based Targets initiative, and everybody’s competing for renewable projects. But fundamentally the biggest challenge is that companies are trying to balance growing and turning a profit while also doing right by their stakeholders and the environment — but these two priorities are not yet weighted equally. We’re getting there, with shareholders and investors urging, but it’s not quite even yet.
What needs to change for it to be even?
Some things are happening already. Stakeholders are leading the charge here for more transparency and information around how products and services are made, for more data to be released publicly. Everyone from investors and shareholders to policymakers, employees and customers have interests here. How a company operates and how it makes its products are important questions, no matter the industry.
And how can technology help with that?
This is a big question. As a first step, companies need to look at the data and understand their sustainability baseline. For some companies, just getting their environmental data in order is a big undertaking, but you can’t really set a target until you know where you’re starting from.

Once a company understands its sustainability baseline, it is important to identify areas that the company can feasibly make more sustainable, and then address those areas. Implementing technology that improves connectivity and provides greater insight into operations will prove to be the solution for many companies. An example of this could be a manufacturing facility installing energy sensors into its machinery that can monitor energy consumption in real time and turn off different machines when not in use. Another example might be a farmer using drones for pesticide distribution. The drone collects and interprets real-time data, which allows for more efficient and accurate spraying so that crops are covered with less pesticide residue. It all comes down to digitization — as companies and eventually industries digitally transform, they will also become more sustainable.
What role does 5G play in combatting climate change?
5G is the core infrastructure to driving digital transformation, and as a result, will contribute in a significant way to combating climate change. We produced a U.S. report that highlights the many ways 5G technology can achieve critically needed sustainability benefits. The findings show that 5G will enable the reduction of 374 million metric tons of greenhouse gas emissions, save 410 billion gallons of water nationwide, reduce pesticide usage in the United States by 50% and increase fuel efficiency by 20% through optimized lane management systems and traffic management systems enabled by C-V2X. There are so many use cases that illustrate that when 5G is fully realized, it will help reduce emissions in massive amounts that will have an actual impact on the planet.

How has Qualcomm managed its own commitment to address climate change?
In 2014, we committed to a 30% greenhouse gas emission reduction goal for Scope 1 and Scope 2, which is tied to our own operations and the electricity we buy. Since committing to that goal, we have reduced our Scope 1 and 2 emissions by 20%. Last November, we took it a step further and set a net zero goal across Scopes 1, 2 and 3 by 2040, and we have interim targets set to align ourselves with the Science Based Targets initiative.

We were the first large cap semiconductor company to make a net zero commitment. We know the Earth’s population is growing: It’s expected to grow from 7 billion to 10 billion people by 2050, which means there’s going to be more energy being used. We set this goal to highlight that this an important issue and something we are prioritizing throughout the company. Things have to change, and we are doing our part to change the status quo.
What’s that journey been like?
It’s been really incredible. We are focused on what we can do to reduce our own operational footprint and how we can help our partners across industries reduce theirs as well. Examples of this might be through leveraging 5G to digitally transform their business or developing energy-efficient products. What many people don’t know is that Qualcomm has been building energy-efficient products since our founding — power efficiency is in our DNA — so we are really well-positioned to play a larger role in the digital and green transformation of industries.
What’s the one thing that companies implementing new technology to digitally transform their business and meet climate goals often overlook?
There is pressure to get things done quickly, but it’s important to pause and look at what makes sense for the business. Every company is different — what makes sense for Qualcomm, which is primarily fabless, may not make sense for another company with a huge manufacturing footprint. If you’re a retailer with a huge supply chain doing a ton of shipping, it’s a different model.
All of this goes back to sustainability and, frankly, ESG more broadly needing to be a businesswide effort, with people from across the company working on these issues. What makes sense for the tourism industry is not necessarily going to work for a semiconductor company. But both can reduce their footprint.
Chris Stokel-Walker is a freelance technology and culture journalist and author of “YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars.” His work has been published in The New York Times, The Guardian and Wired.
The true story of how Mark Zuckerberg and Priscilla Chan’s $419 million donation became the 2020 election’s most enduring conspiracy theory.
Mark Zuckerberg is smack in the center of one of the 2020 election’s multitudinous conspiracies.
Issie Lapowsky ( @issielapowsky) is Protocol’s chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol’s fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing.
If Mark Zuckerberg could have imagined the worst possible outcome of his decision to insert himself into the 2020 election, it might have looked something like the scene that unfolded inside Mar-a-Lago on a steamy evening in early April.
There in a gilded ballroom-turned-theater, MAGA world icons including Kellyanne Conway, Corey Lewandowski, Hope Hicks and former president Donald Trump himself were gathered for the premiere of “Rigged: The Zuckerberg Funded Plot to Defeat Donald Trump.”
The 41-minute film, produced by Citizens United’s David Bossie, accuses Zuckerberg of buying the election for President Biden. Its smoking gun? The very public $419 million in grants Zuckerberg and his wife Priscilla Chan donated to local and state election officials in 2020 to help them prepare for the unprecedented challenge of pulling off an election in a pandemic. On the film’s poster, Zuckerberg is pictured smugly dropping a crisp Benjamin into a ballot box.
Suffice it to say, this was not exactly what Zuckerberg had in mind.
The Facebook founder had tried in vain to make his grand entrance into the election appear impartial. He didn’t plow tens of millions of dollars into a single candidate’s super PAC, like his buddy Dustin Moskovitz did for Biden. He didn’t spread his wealth between Senate campaigns, like his other buddy Peter Thiel is doing right now.
He did it the Zuckerberg way. The Facebook way. Instead of explicitly picking a party — God forbid he be the arbiter of anything — he threw open the vault to his vast fortune and said: Have at it, America. He offered grants to any election official who wanted one, so long as they spent it on what a lot of people would consider mundane essentials that make it easier and safer for everyone to vote: ballot sorters, drop boxes, poll workers and — because it was 2020 — hand sanitizer.
And when those election officials from red, blue and purple places, all starved for funding, applied for more money than the whopping $300 million he already offered, he kicked in another $119 million to satisfy the rest of the requests. Because the last thing he wanted was for anyone to claim they got stiffed and accuse him of bias. What a disaster that would be.
By almost all accounts, the funding from Chan and Zuckerberg was heaven-sent for the people — left, right and center — who actually had to carry out a historically high-turnout election in the midst of a pandemic when poll workers, many of them elderly, were risking their health by just showing up. And some of the equipment the money paid for should last cash-strapped local governments for years.
But a year and a half later, Zuckerberg now finds himself smack in the center of one of the 2020 election’s multitudinous conspiracies, this one with its own catchy name: Zuck Bucks.
The truth is, Zuckerberg’s attempt to appear neutral was a fool’s errand. Because at a time when Republicans are rapidly restricting access to the ballot box in states across the country, spending nearly half a billion dollars to do the exact opposite of that is tantamount to a partisan choice. Or, at least, it was bound to be viewed that way by about half of the country.
If anyone could have predicted that, it should have been Zuckerberg; the Zuck Bucks ordeal is in many ways the real world analog of the accusations of bias Meta has been facing for years. Much as Facebook’s efforts to combat hate speech have become synonymous in some circles with conservative censorship, expanding voter access has become equally synonymous with cheating. Both views lack substantive evidence to back them up, but that hasn’t much mattered. What’s true online is true in the real world: Turning the proverbial knob in any direction is only going to be viewed as neutral if you agree with the direction it’s turning.
As with seemingly everything Zuckerberg touches, the donations — and their ensuing backlash — have had disastrous unintended consequences, inspiring new restrictions on election funding in more than a dozen states, leading to death threats and harassment against the nonprofit leaders who distributed the money and contributing to the resignations of election officials who accepted it. The grants have been the subject of shambolic investigations and — as shown by what The Washington Post described as the “fraud fete” in honor of the “Rigged” premiere in April — have become a big part of the Big Lie.
Zuckerberg couldn’t have been naive to how his donation would be spun. But maybe he was willing to take his lumps. Or maybe he, like so many others, could never have imagined how bad things were actually about to get. Zuckerberg’s millions may have saved the 2020 election, but they’ve also become the beating heart of bad-faith efforts to undermine it — and future elections going forward.
David Becker was on vacation with his family in the Outer Banks, in the socially distanced days of late August 2020, when Zuckerberg’s philanthropic organization, the Chan Zuckerberg Initiative, called him with a question that could have been plucked from a dream: “If you had a lot of money right now,” Becker remembers them saying, “how would you spend it?”
The election was two months away, and Becker, a former senior trial attorney for the voting section of the Justice Department’s Civil Rights Division and the current executive director of the nonprofit Center for Election Innovation & Research, had been talking to election officials about the severe funding gap they were experiencing. COVID-19 was writing and rewriting new rules for how Americans would cast their ballots in November and how those ballots would be counted.
Congress awarded $400 million through the Cares Act to help states navigate those changes, but it wasn’t enough. By the time he got the call in August, Becker said, “it was clear the government wasn’t going to step in and perform or satisfy its responsibility.”
Becker told the person on the other end of the line that if he had money to spend, he’d offer it to election officials to help them educate voters on the onslaught of changes that were coming their way. “I had no idea of the scope of the funding,” Becker said. “I didn’t know if they were talking about $100,000 or what.”
It was more like “or what.” A little over a week after Becker got the call, Zuckerberg and Chan awarded $50 million to Becker’s organization to distribute voter education grants to any state that wanted one.
The money ended up coming not from CZI, but directly from Chan and Zuckerberg’s personal funds, which they routed through the Silicon Valley Community Foundation. “Like most major philanthropies, we regularly consider a wide variety of grant-making opportunities for alignment with our organizational priorities,” CZI spokesperson Jenny Mack told Protocol. “In this case, Mark and Priscilla chose to make a personal donation to help ensure that Americans could vote during the height of the pandemic.”
Becker rushed to email every state election director in the country, encouraging them to apply. About two dozen took him up on it (though Louisiana eventually withdrew), collectively asking for even more money than the $50 million Becker had to offer. So he went back to the money well, asking Zuckerberg and Chan — or rather, their people — to kick in the $19.5 million difference so he wouldn’t have to turn anyone down. “I thought it was really important to use as little discretion as possible,” he said. “I’m very grateful that they agreed.”
All in, CEIR got nearly $70 million, the vast majority of which it passed on to 22 states, plus Washington D.C. — from bright blue Massachusetts to bright red Missouri — in the full amount they had requested.
Tiana Epps-Johnson sitting in profile Tiana Epps-Johnson founded and is the executive director at the Center for Tech and Civic Life. Photo: Abel Uribe/Chicago Tribune/Tribune News Service via Getty Images
Meanwhile, about 1,000 miles away in Chicago, Tiana Epps-Johnson had been having similar conversations with the Zuckerberg-world. Her organization, the Center for Tech and Civic Life, did some work with Facebook during the 2016 election, helping the company with its sample ballot generator. One of Meta’s public policy managers, Maurice Turner, also sits on the group’s advisory committee.
Since 2016, CTCL had been focused on running cybersecurity training for election officials. That training had been licensed by the U.S. Election Assistance Commission under President Trump in 2020, and was offered to all election offices in the country.
But the COVID-19 crisis reoriented CTCL’s focus. Epps-Johnson had watched the Wisconsin state presidential primary, just one month into lockdowns. Nervous voters who had scarcely left their homes in weeks stood six feet apart in hours-long lines — and in some places, in a hail storm — waiting to cast ballots. Major cities had closed most of their polling places. Milwaukee, for example, usually operates more than 100 polling places; that primary day, the city was able to open just five. “We wanted to figure out how we could use any tool in our toolbox to support these folks,” Epps-Johnson said.
In July, two months before Chan and Zuckerberg announced their election grants, CTCL awarded $6.3 million in grants to the five biggest cities in Wisconsin to help them with early voting and voting by mail, PPE and poll-worker recruitment and training, among other things. From there, the organization spent the summer doling out additional grants to select jurisdictions in Pennsylvania and Michigan, as well as launching a rural grant program for areas CTCL said were “often overlooked in the national election landscape.”
But those early grants largely went unnoticed until September, when CTCL also got funding from Chan and Zuckerberg — a whopping $250 million worth. Suddenly, CTCL had the money to expand its earlier grant program to every jurisdiction in the country. “That moment is indescribable,” Epps-Johnson said.
According to Zuckerberg spokesperson Ben LaBolt, who is himself a longtime Democratic communications consultant, CTCL and CEIR got picked based on their prior track records of working with election offices. “The team conducted due diligence to see what nonpartisan organizations had helped fund election infrastructure in states and local election jurisdictions previously,” LaBolt said. “CTCL and CEIR were identified as organizations that had relevant experience.”
Unlike the CEIR money that went to states for voter education, CTCL’s portion of the money would be regranted to local jurisdictions to pay for things like poll-worker recruitment, ballot-processing equipment, drive-through voting, protective gear and more. The announcement emphasized, as if predicting the backlash to come, that the money would go to “urban and rural counties in every corner of America.”
Like Becker, Epps-Johnson also fielded more applications than she had the money to match, and she too was wary of turning anyone down. She went back to Zuckerberg and Chan for more, and got it. In all, CTCL used Zuckerberg and Chan’s money to award more than $330 million in grants to around 2,500 election departments in 47 states, including Washington D.C. More than half of those grants went not to big left-leaning cities, but to jurisdictions with 25,000 voters or less. Every district that asked for a grant got one. “Even our biggest dreams about what might be possible with this program, we were able to exceed,” Epps-Johnson said.
But the sudden influx of cash from one of the world’s most divisive billionaires instantly thrust CTCL’s spending into the spotlight. Conservative critics conflated the early grant program that came out of CTCL’s budget with the Zuckerberg grants that came later, seizing on the idea that CTCL and Zuckerberg had conspired to give Democratic stronghold cities like Milwaukee and Philadelphia a head start before making additional funding available to everyone.
This detail is not only a big part of the plot of “Rigged,” but also central to an investigation in Wisconsin that has been seeking to “decertify” the election there. Michael Gableman, the special counsel leading that investigation, now refers to the first cities CTCL funded in Wisconsin as the “Zuckerberg 5.”
“Why just pick the top five Democratic cities?” Gableman, who received a round of applause at the film’s premiere at Mar-a-Lago, asks in one scene in “Rigged.” “And then when they received criticism about that, then they sprinkled relatively minor amounts of money.”
In truth, Epps-Johnson said, before Zuckerberg and Chan made their donation, CTCL was in triage mode, spending its own modest operating budget on the places that were most likely to have a big problem on their hands come November. CTCL had been working with election offices in Michigan and Pennsylvania even before COVID-19, as both states had expanded access to voting by mail well before the pandemic began. Once COVID-19 hit, Epps-Johnson said, CTCL focused its attention and its grants on the counties in those states that were both struggling to contain the virus and bound to see the biggest influx of mail-in ballots. “In nearly every place, that leads you to population centers,” Epps-Johnson said.
The early grants weren’t the only reason CTCL had a target on its back, though. While the organization is nonpartisan, with both Democrats and Republicans sitting on its board, it’d be hard to claim the same about Epps-Johnson, a former Obama fellow, who, along with her co-founders, had worked at the progressive New Organizing Institute before launching CTCL. When former President Obama gave his April speech about disinformation, it was Epps-Johnson who introduced him and welcomed him to the stage with a hug.
Becker, too, had at least some progressive bona fides. While he’d spent nearly a decade at nonpartisan Pew Charitable Trusts, where he oversaw election initiatives, he’d also done a brief stint as a senior staff attorney at People for the American Way, a progressive advocacy group that now describes itself as being “founded to fight right-wing extremism.”
If Chan and Zuckerberg erred at all in their efforts to appear impartial, it was in selecting organizations to accept the money whose founders’ resumes could easily double as Steve Bannon’s dartboard. Republicans argue that was a feature of Zuckerberg’s plan, not a bug.
An avalanche of lawsuits soon followed. In Louisiana, Attorney General Jeff Landry barred election officials from accepting the money they’d been granted and sued CTCL, alleging it had engaged in an illegal “financial contribution scheme.” In nine other states, The Amistad Project, which would go on to join the Trump campaign in challenging the election results, also backed lawsuits to block the grants from going through. “It was really clear there were legal challenges that were misinformation campaigns that were designed to undermine voter confidence,” Epps-Johnson said.
Zuckerberg himself made a rare statement about the suits in October 2020. “Since our initial donation, there have been multiple lawsuits filed in an attempt to block these funds from being used, based on claims that the organizations receiving donations have a partisan agenda,” he wrote in a Facebook post. “That’s false.”
One by one, the suits were dismissed. In one Colorado case, a district judge even imposed sanctions on the attorneys who filed the suit, calling their complaint “one enormous conspiracy theory.” Only the Louisiana case still stands, after the dismissal was reversed on appeal in April 2022.
But the grant program’s court victories hardly stopped the Zuck Bucks theory from metastasizing and transforming from a nuisance into something a lot more menacing. CTCL was bombarded with death threats, forcing the company to spend $180,000 on security in the last months of 2020 alone.
Becker of CEIR got a few threats, too, but whatever he dealt with, Becker said, “it’s nothing compared to what local election officials in cities and counties are experiencing.”
On a Thursday afternoon last year, Al Schmidt walked into a farmer’s market in a northwest corner of Philadelphia for what had to be his umpteenth interview, wearing a mask that read “VOTE” in big block letters. It was December of an off-cycle year, but such is Schmidt’s commitment to the role he now fills as defender of the franchise.
The former Philadelphia City Commissioner was among the election officials in the belly of the Pennsylvania Convention Center in November 2020, working around the clock and not returning home for days as ballots were counted and protests raged out front. At the time, and still to this day, Schmidt, who’s been a registered Republican since the ‘90s, has delivered the same message: that the 2020 election was legitimate, but that the future of elections is in jeopardy.
For that, Schmidt was called a RINO by Trump on Twitter. And for that, Schmidt and his family have faced merciless harassment and targeted threats, which temporarily forced his wife and two kids to move in with family while Schmidt had a security system installed in their home. For months after the election, police escorts followed the family from the grocery store to the sledding hill. “The consequences of telling the truth aren’t easy,” Schmidt said. “That doesn’t mean you shouldn’t tell the truth.”
Schmidt is one of the many election officials across the country who have resigned from their positions since 2020. It was a transition he’d planned well before the 2020 election, but he said, “2020 certainly confirms in my mind that it’s the right decision for my family.”
Philadelphia received a little over $10 million from CTCL, the most of any county in the hard-fought state of Pennsylvania. Philadelphia is by far Pennsylvania’s biggest county, so it stands to reason it would also get the biggest check. But the grant program’s conservative critics, including some Pennsylvania lawmakers, argue it’s not just that Philadelphia and other counties Biden won in Pennsylvania got more money in total. It’s also that they got more money per voter.
“Counties won by Biden in 2020 received an average of $4.99 Zuckerbucks per registered voter, compared to just $1.12 for counties won by Trump,” reads one analysis on Pennsylvania by the right-leaning think tank Foundation for Government Accountability. Other reports have looked at CTCL’s spending in Texas, Florida and Georgia and reached similar conclusions
These reports have their own partisan roots. The Pennsylvania analysis was authored by a former Department of Labor official under Trump. Another report on Zuckerberg’s spending in Texas comes from an organization whose board includes, among other prominent Trump supporters, John Eastman, the Jan. 6 leader who pushed Mike Pence to reject the election results. Still more articles arguing Zuckerberg bought the election for Biden have been published by a new think tank called The Caesar Rodney Institute for American Election Research, whose primary purpose appears to be exposing the bias behind the CTCL grants. “Even if it wasn’t partisan in its intent, and I would argue that it almost certainly was, it was certainly partisan in its effect,” said William Doyle, a former University of Dallas economics professor, who co-founded Caesar Rodney with an anonymous partner he described as his “shadow conspirator.”
Whatever the political motivations of their authors, anyone can see that the spending numbers do look lopsided. “Rigged” makes this the centerpiece of its argument. But what these analyses miss, Schmidt argues, is what’s behind those numbers. In elections, scale doesn’t necessarily drive down costs. “In a smaller county, if they have a [turnout] increase, they might be able to hire, you know, five more people to sort ballots by hand,” Schmidt said. But in a city like Philadelphia, that received 375,000 mail-in ballots in 2020, you need machines. And machines cost money — sometimes, a lot of it.
About half of the CTCL grant went toward equipment costs in Philadelphia, including the purchase of two ballot sorters that reportedly cost more than $500,000 each. It’s a similar story in states across the country that have been the subject of conservative scrutiny. “It’s no doubt that cities are going to be a little more expensive than rural areas in terms of their needs,” said Nate Persily, a professor at Stanford Law School and co-founder of the Healthy Elections Project. It also just so happens that cities across America tend to vote for Democrats.
In Philadelphia at least, the Zuckerberg money was essential, Schmidt said. He’d seen during the primaries how the slower-than-usual process of counting ballots was creating opportunities to exploit uncertainty among voters. “All that equipment allowed us to really speed up the whole process,” Schmidt said. That includes the process of comparing mailed ballots and in-person poll books to ensure people weren’t voting twice. And that equipment will continue to benefit Philadelphians, he said, “as long as that equipment keeps working.”
Al Schmidt posing, arms crossed, outdoors Al Schmidt, a former Philadelphia City Commissioner, is one of the many election officials across the country who have resigned from their positions since 2020. Photo: Lynsey Addario/Getty Images
Of course, none of that stopped people — including one very powerful person — from exploiting the uncertainty of it all anyway. “Very few of us who work in this space were prepared for the degree to which the losing candidate would continue to lie to their supporters and, in so doing, continue to weaken American democracy, just to keep the anger going and the donations coming,” said Becker, who is now running a pro bono legal defense network to help election officials fend off frivolous prosecution and harassment.
What bothers Schmidt most about the backlash to the grants is the notion that Zuckerberg alone created an imbalance or a distortion of the electoral system. He calls that line of argument “deceitful” because, in a country where elections are run and financed at the local level, there’s never been balance to begin with. “If Philadelphia wanted to spend $100 million on elections, it could,” Schmidt said. “There is no equality from county to county.”
It’s why studies show that districts with more minority voters often have fewer voting machines, leading to longer lines. Those studies have hardly animated conservatives the way the Zuck Bucks studies have. There are obvious partisan reasons for that. Underfunding elections in minority districts tends to hurt Democratic turnout. Funding elections in those districts, as Zuckerberg did, well, doesn’t.
But there’s another reason why the Zuck Bucks debacle is different. While the chronic starvation of election officials is a perpetual problem with plenty of blame to go around, this unprecedented funding of an election can be traced back to a single perfect villain: the Big Tech billionaire who conservatives believe has had it out for them all along.
Anyone investing in voting access is bound to face opposition from the right. But the other big reason why Zuckerberg’s attempt to appear neutral was doomed from the start is because Zuckerberg is not seen by either party as anything close to a neutral figure. He’s somehow both the guy who got Trump elected and placated his administration and the guy who censored and conspired to defeat him. Nothing Zuckerberg does gets to be impartial. The $419 million he spent in 2020 ensures it never will be again.
Try though he did to ingratiate himself with the right throughout the Trump years, Republicans already decided long before he spent a penny that his all-powerful company had rigged the election against them. Or, at least, they decided it was in their interest to say so in order to raise money off the message and spook Facebook out of stifling the speech of the party’s most extreme factions — and its leader.
Then, of course, there’s the fact that Zuckerberg’s personal politics, if not his professional politics, have tended to lean left. He’s spent millions on causes like immigration reform and criminal justice reform. His spokesperson recently came off of Supreme Court Justice Ketanji Brown Jackson’s confirmation team, and the person leading CZI’s policy operation, David Plouffe, was President Obama’s campaign manager. (CZI said Plouffe wasn’t involved with the grant program).
That Zuckerberg was the boogeyman coughing up half a billion dollars to expand voting access almost made it too easy for the right to argue those kinds of donations should be forbidden altogether. Note the absence of outrage over the millions of dollars Arnold Schwarzenegger also spent in 2020, on a similar grant program that was, in fact, far more selective than Zuckerberg’s.
Zuckerberg’s election donation sparked a conservative scramble not just to prevent his money from being spent in 2020, but also to prevent anyone from personally spending money on any election ever again.
Since 2020, some 14 states have passed laws forbidding private funding of elections. Similar bills have passed the legislature in another five states, including Pennsylvania, but have been blocked by Democratic governors. The conservative group Heritage Action for America has backed these bills with a $10 million investment spread across eight states. ”There is nothing more important than ensuring every American is confident their vote counts — and we will do whatever it takes to get there,” Jessica Anderson, executive director of Heritage Action, said when the investment was announced.
The Zuck Bucks theory was key to getting these laws passed. First you plant the seed of distrust, then you promise to nip what you planted in the bud.
The irony of that is that Becker, Epps-Johnson, Schmidt and even Zuckerberg himself all tend to agree that individual donors shouldn’t be the ones funding elections. After all, Zuckerberg may have been assiduously nonpartisan in his giving last time around, but he didn’t have to be. There was nothing stopping him from publicly picking favorites if he’d wanted to. And most everyone agrees that’s hardly a way to ensure trust or equity in the system. Zuckerberg even said as much in his October 2020 Facebook post about the grants. “[G]overnment should have provided these funds, not private citizens,” he wrote at the time, not missing the chance, for once, to rap Congress on the knuckles for not doing its job.
David Becker testifying in a hearing Center for Election Innovation & Research executive director and founder David Becker had spoken to election officials about the severe funding gap they were experiencing. Photo: Joshua Roberts-Pool/Getty Images
The problem is, the government didn’t provide those funds. With the midterm primaries now underway and the pandemic ongoing, it still hasn’t. That leaves some states now underfunded and unable to raise funding from anywhere else.
“What we’re seeing is no ability for philanthropy to step in in the ways that they would if there was a struggling library or a school,” Epps-Johnson said of the laws being passed across the country, “and also no additional public funding at a time when we have election officials using technology that they purchased before the iPhone was invented.”
“We can’t both defund them and restrict their ability to get other funds,” Persily of Stanford said.
In his most recent budget, President Biden called for what would be a historic $10 billion investment in election infrastructure over the next 10 years. CTCL has been pushing for double that investment over the same period of time. But so far, Congress has shown little indication it’s going to act.
That’s one reason why Epps-Johnson’s new focus has been on helping election officials help each other through a group called the U.S. Alliance for Election Excellence. It will invite election officials from every district in the country to come together and swap expertise, and is backed by $80 million, some of which will go to election administration grants in states where that kind of thing is still possible.
But this time, the money’s not coming from Zuckerberg.
The man who spent years atoning for his company’s failure to secure the 2016 election — then rushed to the rescue of the 2020 election — appears to be taking a step back from politics. Or at least, he’s trying to. He made that much clear when he promoted Nick Clegg to president of Global Affairs at Meta earlier this year, freeing Zuckerberg up to post even more legless videos of himself inside the metaverse he’s desperately trying to build. Since then, Zuckerberg has been more quiet than usual about the political events of the day, even letting Clegg take the lead after Meta was banned throughout Russia.
So despite the breathless headlines, it wasn’t any big surprise when LaBolt said last month that Zuckerberg wouldn’t be making any new grants this year. Citizens United’s Bossie, for one, celebrated the news as a “major victory.” In truth, LaBolt said, the grants were always meant to be a one-time deal.
But Zuckerberg can’t just walk away from this ordeal so easily. Like Cambridge Analytica and the Russian troll scandal before it, Zuck Bucks seems likely to hover over Zuckerberg, and Meta, for years, regardless of whether he makes any more donations. Whatever moves Meta makes in the midterms and beyond — including deciding whether to reinstate Trump’s account — this supposed scandal will be just another data point used to pressure Meta to bend to one party’s will.
A year and a half since polls closed in November 2020, Zuck Bucks remains one of the 2020 election’s most enduring conspiracy theories. It’s grown beyond what Trump and his acolytes say happened in 2020, and has now formed the basis of predictions about what will happen this year and two years from now. “They’re gonna try and do it again and ‘22 and ‘24,” Trump says in “Rigged.”
Of course, what no one mentions in that film is that preventing private donors from funding ballot sorters and drop boxes won’t free U.S. elections from the unchecked influence of tech billionaires. If anyone understands that, it’s the folks at Citizens United who won the Supreme Court case to make it so. The midterm elections and the presidential race in 2024 will still be awash in tech money, and some of the very people who were in that screening room at Mar-a-Lago are already happily accepting it.
It’s just that, instead of paying for poll workers, tech money will cover the cost of attack ads and “strategic litigation” funds to take out members of the media. The money won’t be announced in press releases or disclosed in public reporting, and it won’t be offered up to everyone, regardless of party. It’ll flow into partisan dark-money groups that don’t disclose their donors and that work hard to hide their footprints. It’ll still be there. It’ll just be harder to find. Who knows? It may even wind up financing a film some day that tries to convince the world the election was rigged. And it may even work.
Issie Lapowsky ( @issielapowsky) is Protocol’s chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol’s fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing.
After riding the stock-trading wave last year, trading apps like Robinhood have disenchanted customers and jittery investors.
Retail stock trading is still an attractive business, as shown by the news that crypto exchange FTX is dipping its toes in the market by letting some U.S. customers trade stocks.
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 [email protected] or via Google Voice at (925) 307-9342.
For a brief moment, last year’s GameStop craze made buying and selling stocks cool, even exciting, for a new generation of young investors. Now, that frenzy has turned to fear.
Robinhood CEO Vlad Tenev pointed to “a challenging macro environment” marked by rising prices and interest rates and a slumping market in a call with analysts explaining his company’s lackluster results. The downturn, he said, was something “most of our customers have never experienced in their lifetimes.”
Retail stock trading is still an attractive business, as shown by the news that crypto exchange FTX is dipping its toes in the market by letting some U.S. customers trade stocks. But the market’s steady decline has forced companies like Robinhood, Webull, Public and Charles Schwab to grapple with their own jittery investors.
Andrew D’Anna, managing director of Retail Client Experience at Charles Schwab, said 2021 saw a “massive influx of new investors,” most of whom “skewed young and a little less experienced.” That group was also “more bullish about the market,” he added.

Now, as they experience volatility, the question is “are we going to see a significant share of those investors pull out and be scared out of the market?” he told Protocol.
In Robinhood’s case, the answer is clearly yes. Tenev told analysts that the company was “seeing more pronounced declines from those that have lower balances.”
With the market uncertainty, he added, “Our customers became more cautious with their portfolios, trading less frequently and in smaller amounts across all asset classes.”
“We’re seeing exactly the same,” though the decline has not been as pronounced, Webull CEO Anthony Denier told Protocol.
Trading apps had one of their best revenue quarters in early 2021 when the GameStop frenzy hit. “Everyone became an investor whether to make money or to send a message,” Denier said.
The first few months of 2022 turned into “one of the ugliest quarters that retail investors have seen for the last eight years,” he said. Denier said many of the investors “we’re seeing walk away” got into the market during the GameStop frenzy. Some are closing accounts, others are just letting them sit.
The downturn is forcing a reexamination of the business models that helped some trading apps profit from the boom.
Robinhood helped blaze the trail for commission-free, app-based stock trading, a model that has also been embraced by key rivals like Webull, Charles Schwab and Public.
Robinhood, Webull and Charles Schwab make money from rebates they receive for sending trade orders to market makers. That system, known as payment for order flow, has become controversial. Critics have argued that it encourages customers to make as many trades as possible, even when it’s not in their best interest. SEC Chair Gary Gensler has said the regulator could ban the practice.
Denier of Webull called that view “an extremist position” on a system that can sometimes help consumers to get better pricing on trades. D’Anna of Schwab agreed, arguing that payment for order flow helps users “execute trades more efficiently.”

The GameStop frenzy brought fresh scrutiny of payment for order flow. Robinhood pulled the plug on trades in GME and other volatile stocks in part because of the complex web of arrangements it used with companies like Citadel Securities for payment for order flow.
Around that time, Public announced it was dropping payment for order flow. Fidelity also doesn’t take payment for order flow for stock trades.
FTX, the new entrant, said it will offer commission-free trading that will “route customer orders directly to Nasdaq’s order router” instead of using payment for order flow, FTX.US President Brett Harrison said in a tweet.
That prompted a tweet response from Public COO Stephen Sikes, who congratulated FTX for “joining us in rejecting PFOF.”
Public’s business model is based on voluntary tips, which Sikes said offers the company a revenue scale that “is very similar to what we would expect to earn in a payment for order flow model.”
The tip system isn’t without its downsides. As customers losing money on trades feel increasingly strapped, they might feel less inclined to tip.
That’s probably why Public is looking for new, possibly steadier revenue streams. Sikes said Public plans to launch a paid subscription service offering investing research, analysis and data to users.
The downturn has also led online trading apps to focus on longer-term investors, a more sustainable source of growth.
Robinhood has said it plans to roll out new retirement account products. “There’s more that we have to do for retirement and long-term investing,” Tenev told analysts on the company earnings call.
Schwab said it saw that shift in customer surveys over the last two years.
In 2020, 56% said they were investing for the long term, while 44% were short-term traders. Last year, 72% said they were buy-and-hold investors, while only 28% were looking for short-term gains. A new survey in February found only 18% were interested only in short-term gains.
“For us the mindset is very much around the long term,” D’Anna of Schwab said.
In a market slump when daily trades no longer make sense, he said, the smart approach is to help clients “ignore the noise through periods like this.”

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 [email protected] or via Google Voice at (925) 307-9342.
It hasn’t been long since it left the ownership of Dell Technologies.
Jamie Condliffe ( @jme_c) is the executive editor at Protocol, based in London. Prior to joining Protocol in 2019, he worked on the business desk at The New York Times, where he edited the DealBook newsletter and wrote Bits, the weekly tech newsletter. He has previously worked at MIT Technology Review, Gizmodo, and New Scientist, and has held lectureships at the University of Oxford and Imperial College London. He also holds a doctorate in engineering from the University of Oxford.
Broadcom is said to be in discussions with VMware to buy the cloud computing company for as much as $50 billion.
The news was first reported by Bloomberg and then by The Financial Times. The discussions are said to be ongoing, which means it’s unclear whether the deal will be confirmed. VMware was spun off from Dell Technologies last November, and has had multiple owners in the past.
The reported $50 billion figure would be a 25% premium on VMware’s market cap at the close of trading on Friday, and pre-market trading on Monday saw the company’s stock price rise 15%. The company has been reimagining itself for the multicloud era in recent times. “I think we’ve done a good job of repositioning and re-aligning the company around the tremendous opportunity that’s ahead of us,” CEO Raghu Raghuram told Protocol last week.
The acquisition would significantly diversify Broadcom’s offerings, though the company has been acquiring software companies in recent years, including Symantec Endpoint Security.

Jamie Condliffe ( @jme_c) is the executive editor at Protocol, based in London. Prior to joining Protocol in 2019, he worked on the business desk at The New York Times, where he edited the DealBook newsletter and wrote Bits, the weekly tech newsletter. He has previously worked at MIT Technology Review, Gizmodo, and New Scientist, and has held lectureships at the University of Oxford and Imperial College London. He also holds a doctorate in engineering from the University of Oxford.
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