After Tesla CEO Elon Musk criticised the popular online wallet platform Freewallet last Monday (8th February), we wanted to hear both sides of the story.
Freewallet told us that no publication was interested in hearing what they had to say, so the Invezz team sat down with their Head of Public Relations, Solomon Brown, to get a response to the comments from the world’s richest man.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
For those out of the loop, here’s what happened. Freewallet’s official twitter account responded to one of Musk’s recent tweets about Dogecoin with a meme, and directed readers to their Cryptowallet app. Musk replied rather bluntly, saying “your app sucks” and continued on to criticise custodial wallet services more broadly.
As with most of Elon Musk’s Twitter spats, this got a fair amount of attention online and Freewallet came under fire from many of Elon’s followers. Behind the usual barrage of memes, however, is an interesting discussion of the place of custodial wallets in the crypto ecosystem.
Elon is a user of Freewallet – so why the hypocrisy?
Research speculates that Elon is in fact a user of the Freewallet app himself. Data dissected by internet users suggests Musk has actually been a user of Dogecoin for over four years.
When questioning Freewallet about Elon’s usage of their service, they refused to provide any information to confirm nor deny his usage of their app. However, their response clearly indicates he uses the service,
Unfortunately we can’t comment on this as our policy is to keep all client information private.
Of course, client information can’t be given out. Rightfully so. But, Elon is a client.
No ‘direct’ response to Elon Musk’s criticism
Solomon, head of Public Relations for Freewallet, was reticent to respond directly to Elon Musk’s comment that Freewallet “sucks” – perhaps wary of prompting another spat on Twitter. Instead, he took a more conciliatory approach, saying that they “understand [Elon’s] frustration” and that they “don’t take it personally.”
Freewallet refused to be drawn on reports that Musk himself uses the platform’s services and whether there was any hypocrisy in his comments. Instead Solomon made the point that Freewallet is one of the very few options for US investors looking to buy Dogecoin and how they are working to make that process as easy as possible.
He went on to say that when all Musk’s tweets were considered, “Elon was talking about all hosted services” rather than just Freewallet (although their platform was the only one he singled out). In Solomon’s opinion, custodial wallets provide an important service in the crypto space.
Are custodial wallets against cryptocurrency’s principle of decentralisation?
For Freewallet’s team, one of the most important aspects of hosted services such as theirs is protecting people from losing their coins:
When you look at all the money that has been lost forever due to forgotten keys and other human errors, we think that it is pretty clear that there is a need for the convenience and security a service like ours provides.
Solomon went on to say that
It is unfathomable that over 20% of the total Bitcoin supply has been lost due to avoidable things, but that is the reality.
In this, he positioned Freewallet as protecting users from themselves. This presents an interesting question: do users need protection from themselves?
Many people on the “not your keys, not your coins” side of this debate would assert that giving the overall control of your private keys to a third party like Freewallet takes control away from you. This is true and somewhat defeats the fundamental purpose of cryptocurrency: decentralisation.
A bank protects its customers by providing insurance and anti-fraudulent services and policies. Yet, you are never really the owner of your own money. How is this any different? Crypto is meant to be different.
Solomon’s comments provide an interesting counter position that custodial services also protect you from losing your coins through your own error – like a bank – which can be particularly attractive to beginner investors new to the technology:
Crypto purists tend to want complete control over the entire process. That is great. But there are also people that want to have more protections with their finances and are looking for a more convenient experience where things are laid out clearly for them.
Freewallet ‘happy’ with Musk bringing new users into the space
The dispute between Musk and Freewallet was initially prompted by Musk’s regular tweets about Dogecoin, which has seen impressive gains in recent weeks – so we pressed Solomon on it.
In response, the Freewallet employee talked about how Elon’s influence might cause short term problems – but ultimately he thought the attention it brings to the industry will be of long term benefit:
We are very happy that his words and actions are bringing more people into the fold. While it might not be ideal that one person has so much influence on such a huge market, we think that this will be reduced in time as more and more people join in.
He was also reticent to criticise the way in which hype is a big factor in the crypto markets, instead seeing this as part of cryptocurrency’s anti-establishment appeal. Solomon stated that
the beauty of this industry is that the people investing are the one’s in the driver’s seat. If they want to make Doge the next big cryptocurrency it is within their power to do so.
Continuing in this vein, he said that as crypto was such a young industry it was still “the outsider’s game” and this remains one of its central attractions.
It could be said that there’s a bit of the Wild West about cryptocurrency right now, and as such Freewallet would prefer to take a position on the sidelines rather than engage in a public duel with one of the industry’s biggest players. While we’d all like to watch the action at High Noon, it’s an understandable decision.
Disclaimer: Invezz is an advocate of all investment types and the team reiterates its support for a truly free market; which the blockchain sector is pioneering.
Disclaimer: We’ve previously reviewed Freewallet and found it to be one of the better crypto wallets on the market, you can read more here.
For those who are interested in every word uttered during the interview, you can find the full interview transcript below.
Invezz: Hi Solomon, thanks for sitting down to speak with us. As the latest company to attract criticism from Tesla CEO Elon Musk on Twitter, we wanted to hear Freewallet’s side of the story – we’re glad to have the chance to speak with you. So, let’s get to it.
Invezz: Elon Musk tweeted that Freewallet “sucks” yesterday, what do you have to say in response?
Solomon: We totally understand the frustration experienced by any user who is not able to move funds immediately at the market is experiencing peak activity levels. As it stands now, there aren’t many services in the US that support the purchase of Doge. As a result services like ours have experienced peak activity as more and more people are trying to buy it. We are doing our best to ensure that our clients can continue to purchase and transfer Doge and all of the other cryptocurrencies we support, given the current circumstances. With that being said, we understand his frustration. We don’t take it personally and quickly fixed this issue.
Invezz: It’s speculated that Elon Musk uses Freewallet actively, can you tell us more about what services he uses and how often he uses them?
Solomon: Unfortunately we can’t comment on this as our policy is to keep all client information private.
Invezz: So do you think it’s hypocritical of Elon to attack Freewallet?
Solomon: Well, the thing is that in fact Elon was talking about all hosted services. Both hosted and non-hosted wallets have their own advantages and we, along with a lot of other people in this industry believe there has to be a place for both. When you look at all the money that has been lost forever due to forgotten keys and other human errors, we think that it is pretty clear that there is a need for the convenience and security a service like ours provides. We are clear about what services we provide our users as a hosted wallet platform. But with that being said we understand his frustration and are working to avoid any kind of similar situation in the future.
Invezz: Is it just Elon himself, or does Tesla hold any coins with Freewallet?
Solomon: [note that Name did not reply to this question]
Invezz: Moving on. What do you have to say to the many potential users who may have been turned off from using Freewallet’s services?
Solomon: Well, as we just talked about, we provide services that clearly are needed. It is unfathomable that over 20% of the total Bitcoin supply has been lost due to avoidable things, but that is the reality. Hosted wallets are not for everybody, but that is a decision that users should make for themselves. We encourage those who are on the fence to give our platform a try and decide for themselves. We are confident that the majority of people will be pleased with the services we provide.
Invezz: What purpose do you think custodial wallets such as Freewallet serve?
Solomon: [note that Solomon did not reply to this question]
Invezz: The rallying cry of “not your keys, not your coins” is commonly found online, is it possible that Elon has a point?
Solomon: Of course. This industry is huge and continues to grow at a fast rate. With all of the different people interested in crypto, there are almost as many needs that they have. Crypto purists tend to want complete control over the entire process. That is great. But there are also people that want to have more protections with their finances and are looking for a more convenient experience where things are laid out clearly for them.
Invezz: Elon Musk’s tweets currently have a significant impact on the cryptocurrency markets, do you think this is a good thing?
Solomon: We are very happy that his words and actions are bringing more people into the fold. While it might not be ideal that one person has so much influence on such a huge market, we think that this will be reduced in time as more and more people join in. We are as convinced as ever that cryptocurrency is the future, and we are very happy that we are involved in making that future a reality for all different kinds of people.
Invezz: It was a tweet about Dogecoin that set all this off, is Doge’s growth sustainable in your opinion?
Solomon: The beauty of this industry is that the people investing are the one’s in the driver’s seat. If they want to make Doge the next big cryptocurrency it is within their power to do so. As companies in this space we all have to respect what they are doing and not get in their way.
Invezz: Is this a case of “all publicity is good publicity” or do you think that the recent controversy around Robinhood and GameStop could spread to crypto markets? Might we see investors reacting angrily against established cryptocurrency apps?
Solomon: While that sentiment is common to traditional finance and cryptocurrency, the main difference is that the cryptocurrency industry is still young and as such it is still the outsider’s game. Our goal when getting involved was giving those who felt left behind by traditional finance all the tools necessary to take control of their own financial security. That really hasn’t changed, if anything seems to be becoming more and more of a reality as this industry and our services continue to develop.
Invezz: Finally, we have to ask. Will Elon ever get to Mars?
Solomon: Haha, this really is not my area of expertise, but we are all following the news and pulling for him. History has shown that it is unwise to doubt Elon Musk. If he is able to pull it off, it will be one of the greatest examples of the ingenuity humanity is capable of. At this point we all sorely need more positive stories, more things we can collectively dream about and admire. So we all wish him the very best and are rooting for his space odyssey to succeed.
visit & create account