How The New York Times promoted a corrupt attack on ICP by Arkham Intelligence
Crypto corruption bent the mainstream press

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CASE #2  June 9, 2022

Background to June 28, 2021

After more than 5 years of research an development work, the Internet Computer blockchain was spun out as part of the public internet in a network "genesis" event, 10th May 2021. Thereafter, existing balances of its native ICP governance token became transferrable on its ledger, and independent crypto exchanges around the world began to create spot markets for ICP, which allowed exchange users to buy and sell ICP.

At genesis, and for a few hours afterwards, the price of ICP stayed above $450 USD per token, giving the network a fully diluted valuation of $230 billion USD, which was indisputably high. Then the price began to fall.

By June 28 2021, the ICP price had reached $50 USD, giving the network a fully diluted valuation of $23.5 billion USD, which arguably was comparable to major competitive networks. Then a previously unknown organization, Arkham Intelligence, led by a previously unknown founder and CEO, Miguel Morel, published the "Arkham ICP Report." The essential claim of the report was that the Dfinity Foundation, a Swiss not-for-profit organization that is the primary contributor of the technology used by the blockchain, and related insiders, had executed a crypto scam such as a "rug pull" — and that this explained why the price had fallen.

The report would have received very little attention, but it was published in concert with the highly reputable The New York Times, whose promotion lent it tremendous weight. This promotion by The New York Times caused huge damage to the reputation of the project, the Dfinity Foundation and its leaders. Arguably, this led the ICP market cap to devalue by tens of billions dollars more. Their actions appeared coordinated with other attacks on the Internet Computer ecosystem (see Crypto Leaks Case #1), which appear to originate from competitors and people who were short ICP. In this way, for its own reasons, The New York Times effectively joined a devastating attack on a community of many thousands who were holding ICP, or building on the network.

By all accounts, the Dfinity Foundation did not sell any of its ICP tokens for weeks after genesis, and the project founder has sold only a tiny fraction of his tokens (see here, here and here). Furthermore, simple common sense dictates that if the market price for ICP was too high after network genesis, then obviously it would have fallen naturally through price discovery in all circumstances — without any need for "insiders dumping". So who and what was really was behind the Arkham Intelligence report, and the perplexing decision of The New York Times to promote it?

The New York Times Article

The New York Times published their article with the evaluative headline: "The Dramatic Crash of a Buzzy Cryptocurrency Raises Eyebrows." The article covered the claims of the Arkham ICP Report, providing a direct link to its PDF file. The public's understanding of how the NYT works will have led them to believe the NYT performed some basic vetting of the credibility of Arkham Intelligence, and made sure there were no conflicts of interest at play.

Ironically, because there was a mysterious lack of information about Arkham Intelligence and Miguel Morel available, it seemed all the more certain that the NYT had performed some basic vetting of their backgrounds and the substance of their report. After all, surely, they must have wished to defend their reputation for providing accurate reportage to their readers. However, very clearly, the actual facts were not a concern.

While on the one hand they were willing to promote the claims of an operation of highly dubious origins, on the other hand, they had no qualms about attacking a project that there was every reason to believe was honest.

The Internet Computer blockchain's development can be traced back to 2015, which would be highly unusual for a project primarily concerned with quickly collecting cash from token buyers. Meanwhile, at the time of their attack on the project, the not-for-profit Dfinity Foundation was primarily comprised of a very large large research and development team composed of very highly skilled and reputable individuals, including famous engineers, computer science researchers and cryptographers, whom it would be natural to assume were trustworthy.

Perhaps to compensate for this dissonance, the NYT incorrectly repeatedly refers to the Internet Computer undergoing network genesis as an "initial coin offering", which means "ICO" — something that regulators have long banned. This enabled them to present information within a false context, which tarnished those invovled with the project as being engaged in illegal activity. In an ICO, an organization sells unusable tokens directly to the public, which they promise to make usable by developing a new blockchain or service with the funds they are collecting, which was not what occurred. Meanwhile, their DealBook newsletter, which was also published as an article on their website, was even titled "How ICP's Vaunted I.C.O. Crashed" (UPDATE: the NYT updated this title to remove "I.C.O." after the Dfinity Foundation filed a defamation suit against them and Arkham Intelligence).

Meanwhile, the NYT presents Arkham Intelligence as a legitimate "crypto analysis firm", even though they had never produced a report before, and at the time of writing, almost a year on, have not produced a report since.

The fundamental thrust of the narrative promoted by the NYT can be boiled down to the words of Miguel Morel, in a short video he published on Twitter to promote Arkham's ICP Report. Miguel Morel narrates the video to background soundtrack of the kind used by TV crime-exposés.

Miguel says of the falling ICP price: "it appears that this was not a coincidence or accident, but was a case of misconduct by those who seem closely connected to ICP and who have been dumping billions of dollars of ICP while smaller supporters and retail have been left in the dark watching their investments tank ... we will provide ICP holders with the clarity that they deserve ... My team at Arkham Intelligence conducted a comprehensive analysis of the ICP blockchain, and what we found causes us to believe that insiders have continuously deposited billions of dollars of ICP on exchanges as everyone else watched their investments tank. If the available data in our analysis is accurate, we should be asking questions about what could be one of the most extreme cases of investor mistreatment in the history of crypto markets and financial markets overall."

Miguel makes unequivocal statements about the guilt of the Dfinity Foundation and related persons. Even though Arkham Intelligence only had a mere 200 followers on Twitter at the time of publication, thanks to the NYT's promotion using their article and DealBook newsletter, Arkham's video had been seen almost 20,000 times by May 2022, and the narrative involved had likely been spread by word of mouth to millions.

Blockchain is a highly competitive and unregulated industry, which has attracted numerous bad actors, owing to the large sums of money flying around. Under normal circumstances, those interested in blockchain, would have been highly suspicious of Arkham and Miguel Morel. But the NYT's promotion lent the credibility necessary to overcome people's natural skepticism and cause serious harm. The NYT became part of a much wider conspiracy to harm the Internet Computer, owing to the threat its technology posed to the status quo in blockchain (e.g. see Crypto Leaks Case #1).

So why would The New York Times, which has a distinguished history and mission to seek the truth on behalf of its readers, lend their credibility and well-earned reputation to Arkham Intelligence, even though there were abundant indications that ulterior business motives were involved?

Let's delve deeper into Arkham Intelligence, and those behind it, with the help of spy video and other evidence. Miguel Morel sent Nick Longo, also from Arkham, to represent him...

At the outset something feels off, for reasons that become clear in the later videos.

Key investigation results

Arkham Intelligence

It appears likely that Arkham Intelligence is named in homage to Gotham Research, a well-known and well-respected investigative financial research firm. We do not believe, however, that the NYT confused the two when deciding to promote Arkham as a credible "crypto analysis firm". The natural assumption is that they required from Arkham some kind of track record that showed they would be a reliable source of research. However, this was the first report Arkham published, and to date, they have not published another, and at the time of publication, they only publicised a single employee, Miguel Morel, who also lacked a track record. These points alone raise serious red flags, but they only needed have scratched the surface to see there were far more serious issues.

Where exactly is the Arkham Intelligence team?

Anyone can start to gain information about the company from their Delaware registration, which reveal it was formed 4th March 2021.

Arkham Corporate HQ registration

However, this formation date does not match up with their Twitter profile, which claims to have been created in May 2019, almost two years earlier, suggesting it is a sham profile that has been purchased and renamed for purpose. Their first tweet only appeared on the 28th of June, 2021, the very same day that the New York Times published the article. This date also doesn't match with Miguel Morel's LinkedIn profile, which says he joined Arkham in January 2020. But these inconsistencies with dates are just the beginning.

For some time after publishing the report, what existed of Arkham's team, were however based at the corporate address listed in the Delware registration. This is based in the countryside outside Austin, Texas, and is more a proverbial Waco than the kind of cosmopolitan offices in which you would expect to find a respectable research firm:

Arkham Corporate offices

But the small team of individuals (or at least, afflilated individuals) moved out of Texas after publishing the report. Perhaps they came into significant money, because they moved to a luxurious and fashionable house in the Chelsea district of London, England. Their rent there is 32,500 GBP, or $43,000 USD a month, according to the original advertisement.

Arkham Secret Luxury Chelsea HQ

One might assume that a company dealing in the non-profit research of cryptocurrency projects would be simple on the corporate level. However, they are registered all over the United States: Delaware, California, New York and even Colorado.

Arkham California registration

The Arkham team in Chelsea

Arkham's new headquarters in Chelsea, London, now house a number of Arkham's team members or affiliates. Miguel Morel is joined by: Henry Fisher, the former Chief of Staff at Reserve cryptocurrency, and current CTO at Arkham, Charlie Smith, former Head of Business Development at Reserve cryptocurrency, a co-founder of Arkham, and founder of another start-up, Jonah Bennet, journalist and co-founder of an online magazine that employed several Arkham employees as writers, Zachary Lerangis, current Head of Operations at Arkham, and Keegan McNamara, former TPM at Arkham and founder of another start-up.

Three things are noteworthy. Firstly, those at this location are all in their early 20s. Secondly, Charlie Smith and Keegan McNamara are now former members of Arkham, since they are working on new startups, reflecting the fluid nature of Arkham's composition, and why it should not be thought of as a traditional company. Thirdly, three individuals at the house have links to a cryptocurrency "stablecoin" project called Reserve, which Miguel says he co-founded...

The Reserve cryptocurrency

Reserve is not a large technology project like the Internet Computer. It aims to provide a "stablecoin" that is maintained by smart contracts running on the Ethereum blockchain. Investors buy into the project via its RSR token, whose value has fallen by more than 96.5% since its peak. One would expect a thoroughly researched, impartial and objective report would be written by professional researchers, rather than cryptocurrency entrepreneurs, which might lead to highly partisan and inaccurate conclusions being reached. What's particularly perplexing, is that their own token was falling dramatically at exactly the same time as the ICP token, but they presumably do not claim that its price fell because of insider selling.

Fall in RSR (Reserve cryptocurrency) price

Across the industry, many tokens went into steep price falls due to the bitcoin price crashing, which began almost the moment the Internet Computer underwent genesis. BTC fell from $63,314 to $29,807 USD between April 14, 2021 and July 20, 2021. Its steepest fall began on May 10, 2021, the very day that the Internet Computer genesis event occurred, afterwhich it fell more than 40% in the following two weeks. Their report completely failed to account for the effect this would have had on the price of ICP, even though it dragged their own RSR token down 79.4%.

Even though they had direct experience of how crypto market volatility was impacting token prices at the time, when Arkham produced the ICP Report, they mysteriously made no mention of these general market moves, and chose instead to weave a false narrative of malpractice, proving that their actions were intentional and wilful.

Miguel Morel, CEO and founder

At the time the ICP report was published, founder and CEO, Miguel Morel was the only employee publicly associated with Arkham. His LinkedIn profile from the time revealed minimal information about this career and credentials. He appears to have graduated high school while taking some courses offered by colleges at the same time, given that their logos have been added to his resume. Miguel claims to have been a co-founder of Reserve, a relatively small cryptocurrency project, but shortly after the Arkham report was published, the Reserve project removed any trace of him from their websites (however this web page from March 2020 show that his claim to be a co-founder could be correct).

Although Reserve did not list Miguel as a co-founder at the time Arkham published the ICP Report, their website did contain a single blog post attributed to Miguel Morel, which was quickly removed. The blog post was interesting, because it appeared to show that Miguel Morel might be prone to believing in conspiracy theories. It contained the paranoid-sounding text: “Venezuela is in a downward spiral. The Americans are involved. The Cubans are involved. The Russians are involved. Other countries you've probably never heard of are involved. The epistemic environment is poisoned by divergent geopolitical interests. Affairs in Venezuela are thus opaque.”

According to information on the internet, it appears that Miguel Morel was at high school 2013-2017, and that immediately afterwards, from June 2017 to January 2019, he was an "Entrepreneur in Residence" at a place called "Paradigm Academy". Paradigm Academy is a coaching and training center. According to our research, the majority of their employees and students were graduates of another place, called Leverage Research. Leverage Research sought to be a "Non-profit psychology and human behavior research program that aims to improve the world by understanding group psychology to lead people to live in harmony together". But what does that mean?

Leverage Research logo

This is the main building of Leverage Research, in Oakland, California.

Leverage Research HQ

Leverage Research has been reported to be a cult, where its members go through harmful "charting" and "debugging" processes. One former employee, Zoe Curzi, gave details and described how many members who left experienced psychological distress and PTSD, as well as the devastating impact it had on her life.
This whole experience was really fucking confusing. The gaslighting and lack of public knowledge has exacerbated the struggle for a coherent description of events and dynamics, and I spent a long time believing I was at fault for the pain I was going through. I've never been so confused or overwhelmed by anything in my life.

Another former employee, Cathleen, described her experience as "somewhere between painful and horrifying". lived experience was often somewhere between painful and horrifying. I'll offer some possible explanations for why the environment was so bad for me, but whatever the cause, the result was that I was largely crippled by the time the project wound down. Two and a half years after leaving, I'd say I've done a lot of healing and I've also been able to adapt my life to accommodate the various ways in which I still struggle.

In summary, Miguel Morel is a young man, about 22 years old, who chose to work as an "Entrepreneur in Residence" in a place with strong connections to an alleged cult, with no obvious education or business experience that would qualify him to produce credible business research. Moreover, while it is unclear what Miguel Morel means when he claims to be a "co-founder" of the Reserve cryptocurrency project, this affiliation reflects that he may have pre-existing financial interests in crypto that may make his claims far from impartial and objective.

Clearly, where Miguel Morel is the source of claims that could cause billions of dollars in damages to thousands of people if annointed as credible by an authority such as the NYT, this behooves publishers to perform substantial investigations before sharing them.

Arkham's anti-Semitic lieutenant

Within the darkest recesses of the blockchain industry, there are individuals attracted to blockchain because they are anti-Semites, and they want to destroy the banking industry because they equate it with Jewish people. In the course of this investigation, one of Arkham Intelligence's key team members or affiliates, Jonah Bennett, now resident in their luxury Chelsea abode, and the person whose home address is the registered place of business for Arkham, was once apparently caught making anti-Jewish remarks online, as well as celebrating Hitler's birthday. His email is below:

Jonah Bennet email 1

In the following, "The JQ" is an abbreviation for "The Jewish Question", an expression first used by Nazis, often in conjunction with "Final Solution", which was what they called their system of concentration camps that murdered millions of Jewish people.

Jonah Bennet email 2

It is not known whether the NYT was aware of Arkham's connections to an alleged cult and anti-semitic beliefs, but it would be troubling if they had ignored this information when seeking to promote the Arkham ICP Report.

Was Arkham paid?

The NYT published their article and DealBook newsletter promoting the Arkham ICP Report on 28th of June 2021. A few days later, as damage against the Internet Computer ecosystem and ICP token was being wrought, Miguel Morel made his last ever tweet (at the time of writing), claiming he was not hired to produce the report, nor received any form of compensation, and that he did not have a position in ICP tokens:

However, in the clip below Nick Longo states that he believes a client had paid for the production of the report:

Johan Bennett was more forthright about why Arkham produced the report:

Apparently, Arkham is developing a blockchain transaction analysis product, which is derived from other pre-existing technologies. When talking about the tool, and its potential for misuse, Nick Longo appears to acknowledge that the client was a "business rival":

The evidence indicates that the report was professionally produced to order, with the purpose of laying the blame for the falling ICP price on the Dfinity Foundation and project "insiders" involved with bringing the Internet Computer ecosystem to life. It appears that the report essentially seized on a number of large ICP transactions, then held them up without other evidence or context to claim they showed "insiders" selling. The report never once questions why the ICP price was so high after genesis, nor addresses why the price would not fall naturally if it were too high (despite repeatedly drawing attention to the enormous size of the initial network market capitalization, and claiming that it was over 300 hundred billion dollars). Despite their "comprehensive analysis", they also fail to ask whether the high initial price resulted from attackers wishing to harm the Internet Computer ecosystem.

Not only does it appear the report may have been created for a paying client, but also that its strongly made claims were knowingly made without reasonable foundation:

The Arkham investor is Tim Draper

Tim Draper is an American billionaire, who holds a vast portfolio of investments in a range of cryptocurrencies. His investments began with significant holdings in Bitcoin and have since grown to span the spectrum of emerging players such as Ripple, Bitcoin Cash, Tezos and Aragon. His legacy is continued by his son, Adam Draper, who through his VC fund, Boost VC, holds large investments in Bitcoin, Monero, and Ethereum, and possibly others. For the Drapers, the Internet Computer blockchain, and the Dfinity Foundation as the primary developer of the technology that powers it, might be considered a direct threat to their family holdings, because the Internet Computer challenges its proximate competitors across all common blockchain metrics, while introducing completely new capabilities.

Miguel Morel publicly asserts that the Arkham ICP Report was unsolicited and was produced for the sake of the blockchain community. However, not only does it seem possible that it was commissioned by parties unknown for unknonwn reasons, but as Nick Longo reveals below, it was produced using Tim Draper's funding:

Suspicious activity in Chelsea

While the Arkham Intelligence team is located at their luxury Chelsea mansion, which they moved to from their Texas countryside abode after publishing the Arkham ICP Report, interesting things occur. Stuffed holdalls arrive at the property with unknown cargo. The holdalls are sometimes carried by, and always accompanied by, security, who look nervously up and down the road until they have been conveyed inside:

Miguel Morel leads from the front, and would sometimes personally arrive carrying holdalls. But when he did so, he was always accompanied by his own burly bodyguard, and they both looked around nervously until they were off the street.

Arkham, strange cargo and bodyguards Arkham, strange cargo and bodyguards Arkham, strange cargo and bodyguards Arkham, strange cargo and bodyguards Arkham, strange cargo and bodyguards

The many ways harm was caused

We have uncovered multiple cases where parties believed Arkham's claims, simply because they felt The New York Times endorsed them, and then directly took actions that harmed the Internet Computer ecosystem, compounding the reputational damage. This extends to class action lawsuits by ambulance-chasing lawyers, one of which is shown below, revealing the multitude of ways harm has been caused:

Class actions build on Arkham accusations

NYT must remedy the situation

As this case investigation has shown, The New York Time greatly misled the world by presenting Arkham Intelligence as a respectable "crypto analysis firm". Not only do Arkham appear to lack the skills necessary to create a serious report, but almost every aspect of the organization is highly dubious. Although this case investigation brings hard evidence to the world, even a most basic and cursory investigation of the organization would have shown that they were not to be trusted, from the strange misaligned dates on their profiles, to the complete lack of any previous history recorded about them or their founder on the internet.

Elevating Arkham and its report in this manner will likely have reduced the valuation of ICP by several billion dollars, and amplified an already vile campaign against a major blockchain project. As we have shown, Arkham was paid to produce the report, possibly by a competitor, or someone with short positions in ICP, and their main investor also invests widely in blockchains that the Internet Computer might be seen as competing with. While the false narrative may have pleased the client, and possibly their main investor, the result clearly damaged the reputation of the Internet Computer ecosystem, and damaged ICP holders. Lawyers must confirm whether this is professional defamation. But what is beyond doubt, is that the Arkham Intelligence report, and its further publication via The New York Times, caused vast harm to many parties.

The NYT should now take the following steps to reduce the ongoing harm that their support for the Arkham report is causing:

Firstly, the NYT should explain to its readers why it presented Arkham Intelligence as a viable "crypto analysis firm" worthy of coverage.

Secondly, they should responsibly publish a retraction and correct the false information shared in their original article.

Lastly, the NYT has unwittingly been drawn into a conspiracy to defame and manipulate markets that has damaged thousands of people, and they should now reveal who presented the report to them, and whether this was the arch-conspirator that commissioned the report from Akham in the first place.

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