Employees Say Blockchain Startup Civil Hyped Crypto Returns, But Failed to Pay
Civil was supposed to create a more transparent and democratic model for journalism. But so far, journalists working on its platform have yet to receive all of the compensation they say they were promised when hired.
According to several current and former employees of news organizations sponsored by the blockchain startup, Civil told journalists in its 18 newsrooms around the U.S. that the CVL cryptocurrency – which, when issued, was supposed to comprise part of their pay – would probably end up being worth several times more than the estimated valuations mentioned in meetings and reported in tax forms.
Yet lackluster demand caused Civil to cancel a public sale of the tokens last month. Now, the reporters have no idea if or when theyll be paid the tokens that were supposed to be part of their compensation.
Meanwhile, the platform, conceived as a collaborative network where readers would pay for quality journalism and journalists would earn money for content, remains unfinished. The newsrooms, which employ dozens of journalists, are operating normally, but without the tokens originally meant to provide a compelling value-add for users.
Civil can talk all it wants about creating a new future for media, but the reality is its being built by putting journalists into debt, said Jay Cassano, who left the Civil news outlet Sludge on Nov. 8 because, he said, undelivered tokens made up roughly 70 percent of his salary for five months.
I had to borrow money to pay my rent and student loans, Cassano told CoinDesk.
Civil CEO Matt Iles disputes the current and former employees claims.
We didnt promise anyone tokens would be worth any specific amount, he told CoinDesk. Anytime we discussed potential token value with newsrooms, we made it clear we were making estimates and that there was risk involved.
Iles counters that Civil took steps to discourage the kind of frenzied buying that could have driven up the price of CVL, had the tokens been issued publicly. He told CoinDesk:
Civils consumer token framework restricts liquidity and volatility as a means to ward off speculators and ensure that people buying CVL do so because they want to participate in the network.
Indeed, Civil used a rigorous know-your-customer process and partnership with the exchange startup AirSwap, which created a means to restrict access to CVL purchases.
But according to Cassano and other insiders, employees were told a different story about the expected price of CVL.
Specifically, according to Cassano, Civil told reporters working with its sponsored news operations that the CVL token they would be partially paid in could be worth around $0.75.
However, on tax documents, the tokens were valued at a fraction of a penny. Iles would not comment on that difference.
They kept hyping it up internally to keep us in line, saying they were even going to exceed that valuation, Cassano said. Iles, at one point, said he expected the tokens to double or quadruple in value compared to what was written in our contracts.
A second Civil reporter, who still works at one of the newsrooms sponsored by the startup, told CoinDesk the startups leadership absolutely talked up the tokens growth potential to employees.