The "Court Politics" of Encryption Exchanges: Power Struggles and Loyalty Games

Original Author: TechFlow

Reprint: Oliver, Mars Finance

I have a bold theory: all Chinese exchanges are essentially a "digital Forbidden City" where the exchange owners can treat themselves as "emperors," and all the exchange dramas can be understood as "court politics."

Some emperors, like Jiajing, were devoted to spiritual practices, well-versed in the art of imperial power, and allowed two factions among their subordinates to balance each other. They turned a blind eye to internal corruption and were willing to share part of their power, believing that if one person achieved enlightenment, it would benefit everyone around them.

Some emperors emphasize absolute loyalty, are decisive in their actions, and do not allow anyone to bargain. Once someone tries to seek more benefits or challenge their authority, they are completely eliminated.

Let's have a casual talk about the topic of internal court politics in cryptocurrency exchanges. This is purely made up and for entertainment purposes only.

Power struggle

To understand court politics, one must first rid oneself of a naive notion that there are absolute distinctions between good and evil, loyalty and treachery.

In "The Ming Dynasty 1566," Yan Song, although criticized as a treacherous minister by later generations, managed to secure his position as the prime minister for many years through his exceptional political skills, significantly aiding in the enrichment of the national treasury. However, after the rise of the reformists and their fierce anti-corruption efforts, the Ming treasury became even more depleted.

Is there really such a thing as a purely loyal minister and a purely treacherous minister in the world? There are only those who are useful to the emperor at this moment and those who are not, as well as those who struggle to rise and those who fail in their struggles.

Where there are people, there are conflicts in the jianghu.

Power requires personnel to be implemented. The core of the struggle between Yan Song and Xu Jie lies in the competition for personnel authority within the Ming court. Whoever can place their own people in the Six Ministries and Nine Ministers can grasp actual power and influence the practical operation of the court.

The power struggle of exchanges is essentially a competition for key positions.

For example, the core departments such as listing coins, finance, and investment. With many monks and little porridge, various parties will inevitably fight for it.

As a boss, many times I am pleased to see the subordinates fighting.

When subordinates compete with each other, it becomes difficult for them to form a sufficiently strong alliance, eliminating the possibility of challenging authority.

The conflict between the two parties motivates each side to provide the boss with negative information about the other, allowing the boss to obtain more comprehensive and multi-faceted internal intelligence, while also having leverage over the subordinates.

Of course, the conflicts between subordinates must be kept within a controllable range; excessive infighting can lead to resource waste, reduced efficiency, and even jeopardize the overall stability of the organization.

When one party's power becomes too large, even threatening the boss's authority, the boss will then employ certain "imperial tactics," such as promoting internally or bringing in an external professional manager, and granting them significant power to eliminate the opposing faction.

For the Jiajing Emperor, the core issue he faced was: how to choose absolutely reliable ministers in a court where "loyalty and treachery were hard to distinguish"?

Exchange owners still face this dilemma.

The suppression of competitors and the raid of supervision are visible dangers, but in the eyes of exchange bosses, the biggest danger may often lurk around and be imperceptible, such as the betrayal of those around them. As a result, cronyism has become the best solution of the moment – key positions are often filled by the founder's relatives, friends, classmates or even family members, even if they lack professional competence.

It turns out that nepotism or family-run businesses are actually the safest in the cryptocurrency market.

Corruption and Anti-Corruption

Power struggles are inevitably inseparable from corruption and anti-corruption; the two are two sides of the same coin and are both means of acquiring power.

Court politics hinges on how to assess the situation and choose the right side.

To form an alliance, it often requires a "bond," such as being from the same hometown, attending the same school, or having the same professional experience... These can all serve as connection points, but what is more important is still the interests. Relationships like local classmates also need money to be maintained.

How to gain the trust of the "big brother"?

In addition to providing emotional value, what’s more important is to offer some leverage and proactively expose weaknesses. "Big brother, my problems are all here, you can take your pick, I will follow you from now on."

Therefore, bribery or participating in collective corruption is actually the most effective means of demonstrating loyalty and a way to test a person's loyalty. By tying a few people together with money, can they not work together and help each other?

In terms of cryptocurrency exchanges, it is difficult to eliminate internal corruption, insider trading, and other issues for two reasons.

1. Whether it is trading cryptocurrencies or working, the vast majority of people enter the cryptocurrency space for one purpose only: to make money.

Especially when working for a "high-risk company" like an exchange, this is even more true. Many employees, particularly those transitioning from traditional industries, will not have any sense of identification or belonging to the company; they are only thinking about how to make the most money in the shortest time possible.

Secondly, cryptocurrency exchanges are always a gray area. Compared to corruption in traditional enterprises, it is easier to escape legal sanctions through corruption in exchanges. It is also easier to downplay major issues and trivialize minor ones. At worst, one can simply walk away, but the purpose has already been achieved.

This is also a long-term staffing challenge for the exchange.

The emperor's Achilles' heel

The bosses of cryptocurrency exchanges and emperors share the same tragedy: the higher the position and power, the harder it is to establish a genuine relationship of trust.

Everyone who gets close to them may have different intentions: some covet certain core powers, some desire wealth, and some have ulterior motives. In such an environment, suspicion becomes instinctual, and vigilance becomes a habit.

This trust deficit ultimately leads to a smaller decision-making circle.

Since childhood, I have watched various TV dramas and have always had an unresolved question: why is there always a "traitor" beside the emperor, and why are they favored?

Emperors are all lonely; they lack neither money nor power, but what they lack is love and loyalty, which is also their Achilles' heel.

Once someone contributes love and loyalty to those in power, making them feel as if they are bathed in spring breeze, even if this person is relatively ordinary in talent, they still have value in existence.

In this digital Forbidden City of the exchange, technical talent is not scarce, marketing experts are not scarce, and even funds are not scarce; the only thing that is truly scarce is genuine loyalty.

Love and loyalty can be simply expressed by supporting whatever the emperor does; the more absurd it is, the more you support it, which reflects loyalty.

Running a crypto exchange is not an easy thing to do, not only to participate in peer competition, but also to prevent hackers, and regulatory wits and courage, at this time, the exchange bosses are often exhausted in their hearts, and even have self-doubt, some do not know whether the development of the exchange is by his wisdom or luck, at this time it is extremely necessary to support the emotional value of the outside world, spiritual healing, and tirelessly tell him, "You are right, it all depends on you, we are all grateful to you".

Humans are not grass or wood; who can be without feelings? To be recognized, to be loved, and to be needed is a natural desire of humanity.

Ordinary people also have a strong need for love and loyalty, but they are still at the lower levels of Maslow's hierarchy of needs, struggling for their livelihoods and lacking the time and ability to pursue the value satisfaction of higher-level needs.

Women Beside the Emperor

Here, the women around the emperor are not the gossiping so-called harem, but rather the female executives.

Exchanges often have a large number of female executives, which is a very reasonable thing.

A certain renowned traditional finance boss loves to employ female executives. In his view, women are more loyal than men. No matter how much salary he pays to men, he will never be satisfied in the end. In fact, many men who are promoted and gain a lot of wealth and power do not feel much gratitude or loyalty; instead, their confidence is inflated, and they think, "I can do it too."

The essence of power is the desire for loyalty and the fear of betrayal.

In this highly competitive environment of exchanges, what the bosses worry about the most is "cultivating their own gravediggers."

After male executives gain power and wealth, they often view their current positions as a stepping stone to higher power. They are more likely to attribute their achievements to personal abilities rather than to the favor of leadership. They are also more likely to choose to leave at the appropriate time to start a competing company or seek a higher position.

Female executives often demonstrate a stronger organizational loyalty and place greater emphasis on long-term stable career development rather than risky entrepreneurship. They are more inclined to attribute their success to team collaboration and leadership cultivation, thus valuing their current positions and organizational relationships more.

In addition, another major challenge faced by cryptocurrency exchanges is communicating with users during frequent crisis events. In this area, female executives often demonstrate unique advantages.

For example, women generally perform better in recognizing, understanding, and responding to others' emotions, which is particularly important in soothing angry users, handling complaints, and managing public relations crises. In contrast, men are more prone to emotional outbursts and confrontations with users when dealing with related public crisis events.

Therefore, in my opinion, the power of women in the crypto world is greatly underestimated.

It's quite interesting. Looking back at history and the present, regardless of how technology evolves, whether in the traditional business world or the crypto digital world, the essence of power has never changed.

Where there are people, there is a world of rivers and lakes.

The moon waxes and wanes, water fills and overflows; this is the ultimate fate of all power games.