Crypto is the cat with nine lives, but some wonder if FTX might be the last one.
It would be easy to write crypto’s obituary right now. The technological ecosystem has never quite managed to justify the logic of its existence or reach the mass adoption its boosters have promised for years. The latest crypto winter is turning into the crypto ice age, with company after company appearing to be in trouble and, at the very least, facing questions about their stability.
Months of turmoil in the space have culminated in the spectacular implosion of crypto exchange FTX and the incredible downfall of its founder, Sam Bankman-Fried. His business operations have been revealed to be a disaster, and Bankman-Fried as a deeply unserious person and potential fraudster.
According to a count from the website Web3 is Going Just Great, nearly $12 billion have been lost to intentional crypto grifts and scams. That count doesn’t include the $8 billion that appears to have been lost by Bankman-Fried, not to mention other recent high-profile collapses. (Disclosure: This August, Bankman-Fried’s philanthropic family foundation, Building a Stronger Future, awarded Vox’s Future Perfect a grant for a 2023 reporting project. That project is now on pause.)
For those who have been paying attention to the sector, this sort of feels like waking up from a worldwide hypnosis. The metaverse thing, which is basically Zoom meetings with legless cartoons, never made sense. Neither did this idea that images of pixelated punks and weird-looking monkeys were worth millions of dollars as NFTs. Thousands of crypto tokens and coins spun up out of thin air have been revealed to be nothing more than magic beans. Project after project has fallen apart, often taking customers’ money with them, and then there’s the multitude of outright crypto scams.
Crypto isn’t just a financial space where the line goes up and the line goes down; it’s also a place where the line goes poof! and disappears.
“We’re back to the Dark Ages with regards to trusting crypto,” said Phillip Shoemaker, the executive director of Identity.com, an identity verification company that works in the Web3 space, and a tech industry veteran who was once the head of the Apple App Store. At the same time, this isn’t entirely new. “With crypto, we have these massive ups and these massive downs, and it’s a super volatile asset, and we know that.”
This could — and in many people’s minds, should — be the death knell of the industry. Will it? Ehhh.
Crypto has undergone a series of boom-and-bust cycles and a number of high-profile collapses over the years. In 2014, Mt. Gox, a Tokyo-based crypto exchange, went bankrupt after losing hundreds of thousands of bitcoins. In 2017, US authorities shut down the exchange BTC-E amid money laundering allegations. (Disclosure here: I had invested about $100 in Litecoin on the exchange a few years before and that money is absolutely gone.)
In 2019, Canadian crypto exchange Quadriga went under. Canadian authorities later determined it was a Ponzi scheme orchestrated by a founder who, before its downfall, mysteriously died. The arena is rife with scams and schemes and so-called rug pulls and pump-and-dumps. There’s constant hand-waving from regulators and policymakers and critics that something has to be done about crypto, but exactly what that something is remains hazy at best. Until very recently, a lot of those lawmakers and policymakers were listening to Bankman-Fried.
Crypto may be the cat with nine lives; it’s just not clear which life it’s on right now.
“There are many people who tell you, ‘Hey, the market crashes every few years.’ I think eventually that logic has to run its course, or that pattern,” said Jacob Silverman, a journalist currently working on a book on crypto and fraud with crypto critic and actor Ben McKenzie. “Sam was supposed to be the safe bet.” The thing is, in crypto, there might be no such thing.
FTX’s collapse is bad bad bad
What happened with FTX and other major crypto collapses in recent months is bad for customers, for investors, and for the industry itself, full stop. Venture capitalists are likely to think twice before investing in the next crypto project that comes before them. Interest from retail investors in the space is slowing down. Some institutional investors previously skeptical of the space had opened up to it somewhat in recent years as prices climbed and it became clear there was money to be made. Bridgewater’s Ray Dalio went from warning bitcoin could be outlawed to thinking it might be a gold-like alternative. Now, institutions are likely to become hesitant about how involved they want to be.
“You don’t want to be the last person in, but there’s obviously a danger of going full throttle into it, so we’ve been going very slowly,” one senior vice president at a major hedge fund told me. He asked for anonymity to speak candidly about the situation. “We were actively uninterested five years ago, and now, we’re dabbling. Is this going to make institutional players more scared? It can’t make anybody more comfortable knowing that one of your major counterparties is clueless, for lack of a better word. That’s just terrifying.”
A trader at another prominent hedge fund said he hasn’t spoken with anyone in traditional finance who thinks crypto is going to “die die,” though he added that “obviously, expectations have been scaled back quite a bit.” He admitted that in recent months, he looked at Bankman-Fried and wondered how he and others were pulling off some of what was supposed to be this wild business success. “There’s been moments when I’ve been sitting here where I’m like, ‘Am I just actually a fucking idiot? I don’t get it, how are these dudes making so much money?’ And now I’m like, ‘No, no, actually, you understood exactly what was going on here.’”
What was going on here, to be clear, is that a lot of fake money was being made up and a lot of real money was being lost. “It’s like if you had supermarket loyalty points, and you’re counting them as money, and you’re only solvent if you’re counting your own loyalty points that you made up as your assets,” said David Gerard, a prominent crypto blogger and critic based in the UK. “Their liabilities were real, but their assets were imaginary.”
FTX’s downfall has caused contagion across the crypto industry, with other companies being caught in a crunch. There have been rumblings of more bankruptcies on the horizon, and US exchange Coinbase has seen a massive drop in its market value.
“It’s obviously a super, super dark cloud. And the other unfortunate thing is it’s not only impacted FTX, it’s metastasized to affect a lot of different funds and startups in this space that have had a pretty substantial role in building out this entire industry,” said Caitlin Cook, head of marketing and communications at Hxro Labs, a contributor to Hxro, a network building crypto derivatives infrastructure. “It wasn’t a contained blowup, it’s very clearly spread.”
Doug Colkitt, the founder of Crocodile Labs, which is developing a decentralized crypto exchange, said there are a lot of projects that had ties with FTX that are now just completely shutting down. “Up until last week, they had years of runway. That’s zero now,” he said.
And it’s not just a financial problem, it’s a morale problem. Many crypto believers and builders, the people dedicated to the cause and entwined in the HODL culture — holding on for dear life — will stick around. But not everyone.
“I’ve never talked to so many people in the space and who have been in the space full-time for years who have said, ‘I think I’m done, I think I can’t do it anymore,’” Colkitt said. “People lost significant amounts of money, they had their projects destroyed. Even if you didn’t, you have friends in the space who were just zeroed. It’s a very, very pessimistic mood right now.”
Everybody hates Sam
It should go without saying that Bankman-Fried has plenty of enemies at the moment.
He has undertaken major efforts to place himself and his companies at the center of the crypto narrative in recent years by hosting flashy conferences, partnering with big celebrities, hobnobbing with regulators, making splashy investments, and injecting large donations into political and philanthropic causes. He’s attracted a lot of media intrigue and coverage — the son of fancy lawyers who went to a fancy college, a disheveled wunderkind who seemingly figured this whole confusing system out.
Neeraj Agrawal, director of communications at Coin Center, a crypto-focused policy think tank, told me in a text message that he doesn’t feel there’s “much else to say” about Bankman-Fried. “It sucks that one guy can do so much damage,” he said.
Among those who have been working to legitimize crypto in terms of policy and regulation, there’s a sense of frustration that Bankman-Fried sucked all of the air out of the room after a pretty rapid rise. “You can ‘communicate’ for a decade and then one guy comes along and undoes any good you’ve done,” said Jerry Brito, the executive director of Coin Center, on Twitter. “Kinda demoralizing.”
There was also a sense that Bankman-Fried was trying to push regulators and policymakers in directions that would have favored his company — something many in the industry, including the Binance founder who ultimately helped orchestrate FTX’s collapse, took issue with.
Some people in the industry say that this is proof that centralized exchanges like FTX won’t work. They say that decentralized finance, or DeFi, which tries to replicate a lot of the financial system, but without intermediaries and depending largely on smart contracts, is the way. “In DeFi, you see every single loan,” said Tarun Chitra, founder and CEO of Gauntlet Networks, a financial modeling platform for blockchains. “You entered that contract and you getting wiped out means you took irresponsible risks. Whereas in this centralized finance space, they just let people keep taking irresponsible risks with customer money.”
It is worth noting that many in the DeFi space worried the legislation Bankman-Fried was backing could kill DeFi altogether in the US, giving centralized exchanges like FTX an enormous leg up.
The argument that DeFi is the answer to this is a little hard to swallow, at least for now. For one thing, DeFi is still a nascent space that is very difficult for regular users to navigate. It is often subject to scams, too. And regardless, most regular people looking at the crypto space aren’t really going to get the difference.
“From one perspective, especially building decentralized protocols that are competing or hoping to provide an alternative to centralized exchanges like FTX, we hope that some fraction of people would move over and at least realize the distinction there. But the reality is, for 90 percent plus, it tarnishes the entire space,” Colkitt said.
Bankman-Fried is not really doing himself any favors here by putting out weird tweets, giving terrible interviews to reporters, and in a DM exchange with Vox’s Kelsey Piper, appearing oblivious to the weight of the situation and its consequences. A pullback of the curtain of the boy genius’s business operations and balance sheet reveals a complete and total mess.
“I always thought he was a clear-eyed trader who was in a business that I thought was a little shitty,” the hedge fund vice president said. “If even half of the reporting is to be believed and the bankruptcy filing is accurate, that’s a fucking shitshow. I cannot believe they were that stupid.”
Crypto people will say that Bankman-Fried was an outlier, and are now trying to distance themselves from him. But it’s not clear how much of an outlier he and FTX really were. Again, these kinds of implosions in crypto are not exactly uncommon. “[Crypto] is set up to produce people like Sam or elevate people like Sam,” Silverman said.
If you take a step back, so is a lot of finance and startup culture, where some figures have been able to fake it until they make it and then, ultimately, are caught faking it. (See: Bernie Madoff and Elizabeth Holmes.)
Maybe the question isn’t whether crypto will die but whether it should
Basically no one I spoke to for this story on either side of the crypto debate said they think this is the end of the industry, though their reasons as to why were different.
Hilary Allen, a law professor at the American University Washington College of Law and an expert in financial stability regulation — who is not a fan of crypto — said she just doesn’t see the efforts to get the government’s blessing on it stopping, given how much money, despite significant losses, is still on the line. “There are still people in the crypto industry lobbying for legislation that would allow crypto access to the government safety net to allow it to keep going,” she said. “The rhetoric from people who have large crypto positions is entirely cynical because crypto has no value if you have no one to sell it to. They have a vested interest in maintaining that rhetoric. There’s a lot of sunk cost here.”
Alex Gladstein, chief strategy officer at the Human Rights Foundation and an advocate largely for bitcoin for humanitarian and cross-border reasons, believes that crypto remains “cyclical” and that a bull cycle will come back around. “It’s a massive setback for the crypto industry, and I hope people learn the right lessons,” he said. (One lesson here: Don’t leave your money on the crypto exchange, really, even if those crypto exchanges are easier to use and promise they are super-duper aboveboard.)
Jonathan Victor, ecosystem lead at Protocol Labs, an open-sourced research and development lab, said he sees this moment as a “reset” and an “end of a certain era of crypto with the headiness of people doing stuff.” But he sees it as an opportunity to keep trying and creating something useful in the space. “It definitely creates noise, and it affects, in the short term, the general perception around things, but ultimately the true weighing machine for all of this stuff is: Do we build valuable things?” he said.
It is probably true that this is just another crypto bust and that in X amount of years from now, we’ll see another boom. (Fortune’s Term Sheet reported that some venture capital firms are already on the hunt for where to park their money in the arena next.) It will probably look different, because it always does, and likely have new players and technologies and acronyms that we’ll all have to learn about if we want to play along. And after that boom cycle, let’s face it, there will probably be another bust.
But maybe there’s a distinction here between what will happen and what should. Crypto’s not great for the planet, it’s wildly volatile and speculative, and it’s costing a lot of people a lot of money that results in very real pain. I’m not saying there are no upsides to it or dismissing the possibility that someday its potential will be realized. But you do have to wonder how much and how long any of this is worth it.
Crypto remains largely a solution in search of problems, and in the process of that search, it’s causing a lot of problems on its own.
Jeffries is known for bringing different groups together, though he’s also clashed with some progressives along the way.
To get a sense of how Rep. Hakeem Jeffries (D-NY) would approach the job of House minority leader, look no further than his work on the 2018 First Step Act, his supporters say.
Jeffries was a lead House sponsor of that bill, the most significant criminal justice reform to pass Congress in years. To get it done, he collaborated with a wide spectrum of Democrats, the Trump administration, and Republican co-sponsor Rep. Doug Collins. Jeffries’s willingness to work with all of these groups and weigh their input ensured the measure ultimately came to fruition, according to other House members.
“He was able to negotiate first within the party itself,” Rep. Gregory Meeks (D-NY), a co-sponsor of the bill and a Jeffries ally, told Vox. “And then was able to work out a deal with the Republicans.”
Whether Jeffries, 52, is able to establish that same consensus within a divided Democratic caucus will determine just how successful he is in this job.
The New York representative, a member of both the Congressional Progressive Caucus (CPC) and the Congressional Black Caucus, is poised to make history as the first Black party leader in the House. His ascent, supporters say, has been marked by the ability to bring together disparate groups, though he has clashed with some progressives in the past. In this new role, Jeffries will have to navigate the ideological differences in his own caucus while finding ways to counter Republican initiatives and messaging as part of the minority.
Jeffries, a corporate attorney prior to getting into politics, has said he’s up to the challenge, writing in a November letter announcing his candidacy, “I promise to prioritize and value input from every corner of the Caucus. … It will be my mission to make sure that every single Member of the Caucus has an authentic seat at the legislative table.”
His backers said they believe he’ll live up to this promise and that he’ll factor in more opinions than former leader Nancy Pelosi did. Keeping his caucus together, however, could require more outreach to those — including some progressives — he’s been dismissive of before.
Jeffries’s ascent to Democratic leader, briefly explained
In mid-November, Jeffries officially launched his bid for minority leader after serving in Democratic House leadership for the last six years.
This announcement was a long time coming. His years in Democratic leadership made him widely viewed as a favorite for the position. As of this week, Jeffries has already picked up endorsements from senior members and is set to run unopposed when elections take place on November 30 and December 1.
Jeffries’s run follows his reelection to Congress for a sixth term in a safe Democratic seat. As the representative from New York’s 8th Congressional District (which includes parts of Brooklyn and Queens), Jeffries has established a broad base of support rooted in his even-handed approach to leadership, policy, and messaging.
“His approach to leadership is always the same: very even, patient, smart focus on the substance and discipline on message,” said Rep. Josh Gottheimer (D-NJ), a co-chair of the Problem Solver’s Caucus and Jeffries ally.
Since joining Congress, Jeffries has grown his ties in the House. In addition to being a member of several powerful caucuses, he sits on both the House Judiciary and Budget Committees, where he’s worked on criminal justice reforms and music licensing.
Jeffries has also strengthened these connections as Democratic Caucus chair and a past co-lead of the Democratic Policy and Communications Committee, a role that involved developing the party’s “For the People” policy agenda, which included provisions like lowering prescription drug costs and subsidies for child care. In 2020, Jeffries further raised his national profile while acting as an impeachment manager during former President Donald Trump’s first impeachment.
Across these roles, House Democrats describe Jeffries as a deeply analytical leader who is focused on fact-based arguments, one who has brought a level approach to discussions that could otherwise be polarizing. “He was able to calm people down and make sure the temperature was lowered,” Meeks said of Jeffries’s work on the First Step Act.
Jeffries brings experience in state legislature and as a corporate attorney to the role as well. Before his election to Congress, Jeffries served in the New York Assembly beginning in 2007, where he focused on bills that combated gerrymandering and racially discriminatory policing practices, Business Insider reports. And before that, he worked for seven years as a corporate attorney at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and spent two years as a litigation attorney for CBS and Viacom.
On several of the bills he’s worked on, his allies say Jeffries was known for soliciting input from a range of parties involved and managed to keep everyone on board.
“We had this comprehensive strategy to engage everyone that wanted to listen,” said former Jeffries communications director Michael Hardaway of the process for developing the First Step Act, which reduced sentences for certain federal inmates. “He made an effort to sit down with the Congressional Black Caucus, the Congressional Hispanic Caucus, the Problem Solvers, and the progressives, and he just had listening sessions with tons of members.”
Rep. David Cicilline (D-RI), who worked alongside Jeffries in leadership, said they took a similar approach when they crafted the “For the People” agenda, which Democrats unveiled ahead of the 2018 midterms. “I think virtually every single member of the Democratic caucus participated in either a meeting or listening session with Cheri [Bustos], Hakeem, and me,” he told Vox.
Jeffries’s willingness to have these open discussions have been central to his work with Democrats and across the aisle, per his allies. “He’s someone who’s not overly defined by ideology. He is so effective because he can speak to anyone regardless of where they are and listen to them,” said retiring Rep. Kathleen Rice, a longtime Jeffries supporter.
This open approach has led many Democratic members to believe that Jeffries — a new leader who represents significant generational change — could help decentralize how the party develops legislation and make it less top-down.
“I expect that there’s going to be a lot more sharing of information, lots more in-caucus deliberation, lots more opportunities for members to participate in crafting the policy of our caucus and the strategy,” said Cicilline.
Jeffries will have to grow trust on the left
While Jeffries identifies as a progressive and is a part of the Congressional Progressive Caucus, he has also made statements and taken steps that have harmed how some on the party’s left flank perceive him.
“I do think there has been a more strained relationship between Jeffries and the progressive wing of the party, which means he’s got some work to do,” said Ezra Levin, a co-founder of the progressive grassroots group Indivisible, citing “some of his investments in primaries, some of the statements he’s made about progressives in the past.”
Jeffries notably partnered with Reps. Terri Sewell and Gottheimer to start the Team Blue political action committee, which was dedicated to defending incumbents in blue districts and thwarting progressive challengers in primaries. Gottheimer has previously said that the group’s investments — several of which were successful — were intended to minimize intraparty fighting. The group worried divisive primaries could hurt candidates in the general election and ultimately harm Democratic efforts to protect their majority. Jeffries’s team has also said that protecting incumbents falls under the purview of someone who’s the head of the Democratic caucus.
Additionally, Jeffries has previously made statements that seemed dismissive of more left-leaning members.
“The extreme left is obsessed with talking trash about mainstream Democrats on Twitter, when the majority of the electorate constitute mainstream Democrats at the polls,” he told the New York Times in August 2021, a time in which several establishment candidates had just defeated progressives challengers. “There will never be a moment where I bend the knee to hard-left democratic socialism,” he told the Atlantic in a summer 2021 interview, arguing that there are important differences between his version of progressivism and that of some more left-leaning Democrats.
Some progressives — particularly those who support politicians relying on grassroots support in fundraising — have had a problem with the fact that Jeffries has been a top recipient of donations from the financial industry, taking in more than $1 million between 2019 and 2020. He’s not alone in doing so; according to OpenSecrets, multiple House and Senate Democrats received significant contributions from the financial sector this past cycle. As Alexander Sammon writes in the American Prospect, these donations as well as policies that seem to go easier on Wall Street have both garnered scrutiny:
While Democrats were reconsidering their coziness with Wall Street, Jeffries broke ranks to vote with the financial services world, including on a high-profile measure literally written by Citigroup lobbyists in 2013 that killed the Dodd-Frank “swaps push-out” rule, allowing banks to engage in risky trades backed by a potential taxpayer-funded bailout.
Activists would also like to see Jeffries, who has supported Medicare-for-all but not the Green New Deal, be bolder on climate policy. “In theory, Democratic Party leadership wanting to pass the baton to a younger leader sounds great,” said John Paul Mejia, a spokesperson for the Sunrise Movement, a progressive group focused on climate action. “But Representative Jeffries has not proven himself to be representative of our generation and has not proven himself to seriously address the crises that our generation faces.”
Levin said he was hopeful that Jeffries would approach leadership in a way that factored in the different ideological viewpoints in the caucus, as the lawmaker has promised to, and said he would be watching for the actions he took to do so. Examples Levin said would assuage his concerns included opening up lines of communication with progressives and organizers, as well as elevating progressives to key roles in the party.
“With Schumer, with Pelosi, with the Biden White House, the effective coalition holders have done all those things. There are regular lines of communication: progressive, centrists, all have a seat at the table,” he said.
Thus far, some prominent progressive members, including Democratic Reps. Jamaal Bowman (NY) and Ilhan Omar (MN) have expressed their support for Jeffries, a signal of openness from the party’s left-leaning members. “What I would say about him is that he is open to engaging in a dialogue,” said Rep. Ro Khanna, a member of the CPC.
In a recent CNN interview, Jeffries appeared to emphasize a commitment to working with all Democrats as well.
“I have great respect for Rep. [Alexandria] Ocasio-Cortez and every single member of the House Democratic Caucus,” he told Jake Tapper. “The majesty of the House Democratic Caucus is that we are so incredibly diverse, in terms of race and gender and religion and sexual orientation, region, life experience, and even ideology from the left to progressives, New Dems, Blue Dogs, moderate and centrist Democrats, all points in between.”
Taking on Republicans is another big part of Jeffries’s job
In addition to keeping the caucus together, a big part of Jeffries’s role will be navigating a Republican majority and leading the Democratic response.
Jeffries indicated in his letter that he’d be open to working with Republicans when possible, while pushing back on them if that’s not tenable. “It is my hope that we can find common ground where possible with our Republican colleagues in order to deliver results for the American people,” Jeffries said in the letter, adding, “At the same time, the opposing party appears to have no plan to accomplish anything meaningful.”
Members believe Jeffries’s response to Trump’s impeachment and the January 6, 2021, attack have been indicative of a willingness to confront Republicans and extremism within the party when that approach is called for. Ahead of the formation of a January 6 select committee, Jeffries gave a fiery floor speech decrying far-right conservatives’ adherence to the “Big Lie.”
“If the Republicans want to work together … he’d be looking to do that,” said Meeks. “But when the Republicans are playing games and going on that MAGA agenda and just trying to do investigations after investigations, for no real reason other than their politics, he’ll be able to get on the floor of the House, he’ll be able to talk to the press.”
Some moderate Democrats have expressed optimism that there could still be places where the two parties could collaborate, with Gottheimer citing areas like immigration reform and energy policy. “We’re going to do all we can to move strong policy forward,” said Rep. Suzan DelBene (D-WA), the chair of the moderate New Democratic Coalition.
Levin, however, was more circumspect. “Faced with that opposition, what you hope to have with a Democratic leader is someone who recognizes that threat, who is rallying the troops,” he said. “You’re looking for a fighter.”
Bird flu is driving up turkey and egg prices — and killing millions of animals. Why won’t we vaccinate against it?
If turkey’s at the center of your table this Thanksgiving, it’s going to be a more expensive meal than usual. Consumers are spending around 20 percent more on the centerpiece bird than last Thanksgiving.
Some of that can be blamed on inflation, as farmers grapple with higher feed, fuel, and labor costs. But the price hikes are also connected to the nasty Eurasian H5N1 virus, a highly infectious avian influenza burning through poultry flocks around the globe.
So far this year, 8.1 million turkeys in the US have died due to the bird flu — about 3.7 percent of the 216.5 million farmed each year — along with over 40 million chickens. But most don’t die from the virus itself. Rather, they’re culled, or proactively killed, in a brutal effort to prevent the virus from doing even more damage.
The virus is excruciating for infected birds, with a mortality rate as high as 100 percent for chickens. But birds that aren’t infected yet must be culled per US regulations, and they may have it even worse than the sick: The two most common cull methods are suffocating birds with foam, and employing “ventilation shutdown,” in which the birds are cooked alive by closing off vents so temperatures inside the barn rise and the birds slowly die by heatstroke. This particularly inhumane method was used as a last resort in the 2015 US bird flu outbreak, but has become a much more commonly used method in this year’s outbreak.
The carnage has caught the eye of Sen. Cory Booker (D-NJ), who just introduced legislation to ban the two methods.
While farmers have always had to contend with animal disease, in recent years avian influenza has grown into a serious crisis. During the 2015 outbreak, more than 50 million birds in the US — mostly egg-laying hens — had to be culled, causing $3.3 billion in economic losses. Europe is experiencing its worst bird flu outbreaks in history, while this year’s US outbreak is on the cusp of killing even more animals than in 2015.
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Bob Edme/AP
Avian flu outbreaks are most common in the fall and spring, as wild birds — the natural reservoirs of the virus — migrate and shed it through fecal droppings, saliva, and nasal secretions. Those contaminants can in turn land on farm equipment, farmworker clothing, or in animal feed, and then spread like wildfire through factory farm operations that can house hundreds of thousands, or even millions, of animals. Outbreaks usually subside during the summer, when wild bird migrations cease — but not this year.
“It’s constantly hitting,” said John El-Attrache, global director of science and innovation at the US vaccine developer Ceva Animal Health. Some experts worry the highly pathogenic bird flu could now be with us year-round.
Researchers speculate the strain is mutating to spread more efficiently than previous versions. Bird flu has even become a conservation problem, as the new strain is infecting twice as many species as during the 2015 outbreak, including vulnerable species like puffins and the endangered bald eagle, along with more mammals than usual.
Make no mistake, a major reason why bird flu is so destructive in the US is that factory farms — with so many chickens and turkeys in such close quarters — are the perfect playing field for the virus, which is why farmers are so quick to cull infected flocks. But that very fact raises a simple, but surprisingly controversial question: If avian flu is so deadly and so economically destructive, why on earth aren’t we vaccinating birds against the virus?
Why we’re quicker to cull than vaccinate
A sobering lesson from the Covid-19 pandemic is that even the best vaccine isn’t good enough on its own to stop a deadly disease — economic self-interest and lack of international coordination can squander good science. The same is true in the global push to stop the bird flu.
There are H5N1 vaccines on the global market — Kansas-based Ceva Animal Health’s vaccine is administered in-ovo (in the egg) or on the day chicks are born, and is 80 to 100 percent effective for almost five months. It’s licensed in the US, as are vaccines by Zoetis and Merck, but none are approved by the USDA for actual use because they would interfere with global trade. Bird flu vaccines are used primarily in countries where bird flu is endemic — meaning outbreaks occur regularly — and which have little to no international poultry trade, like Indonesia, Egypt, and Mexico.
For countries in which poultry exports make up a big share of the industry’s revenue — such as the US and many European countries — vaccines have largely been a nonstarter, even though they have the potential to severely limit the death toll of mass culling. Why? Blame the “DIVA” problem.
DIVA is short for “differentiating infected from vaccinated animals” — the challenge of identifying whether a bird is actually infected with avian influenza, or just has avian influenza antibodies after vaccination. Countries fear that importing eggs or slaughtered meat from vaccinated birds in countries where the virus is circulating could inadvertently spread it within their own borders by introducing the virus to wild or domesticated animals through discarded raw meat. That means that big poultry exporters like the US — which sends 18 percent of its poultry abroad — don’t vaccinate, for fear they’ll miss out on a huge part of their revenue: international trade.
“It’s very simple — if one country is not exporting to somewhere, somebody else will take that slot,” said Carel du Marchie Sarvaas, executive director of HealthforAnimals, a trade group that represents animal vaccine developers.
And without international coordination and predictable vaccine use, it doesn’t make economic sense for vaccine makers to invest in developing vaccines that protect against the bird flu. “We’re not going to make [massive investments] unless we’ve got major markets on board,” said du Marchie Sarvaas. “And the only way you’re going to get major markets on board is if you get some sort of political deal. And that comes to the trade point and the export point.”
In other words, the bird flu vaccine problem isn’t just a veterinary challenge. It’s also a geopolitical coordination challenge, a classic game theory problem where no major poultry-producing country wants to be the first to vaccinate. As a result, everyone sticks with the kill ’em all approach. And vaccination isn’t cheap, so producers and governments have to weigh the cost of vaccination against the cost — and the PR hit — of killing tens of millions of animals in grisly ways. The rapidly evolving nature of the virus also means existing vaccines will offer less protection against future strains.
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Courtesy of Direct Action Everywhere
“The amount of spending on [culling] is peanuts compared to the amount they make exporting poultry products,” said Jarra Jagne, a Cornell University veterinarian who helps poultry producers manage bird flu outbreaks.
But despite the trade and vaccine development challenges, the conversation has been quickly shifting, especially in Europe.
“We need to vaccinate”
In May, agriculture ministers in the European Union agreed to develop a bird flu vaccination strategy to complement the bloc’s efforts to stamp out the disease, a major departure from the standard “eradication” approach. And there’s a race underway in the Netherlands and France to update old vaccines to protect against the current strain decimating flocks. Several companies and researchers in the US are working on new vaccines as well.
“We’ve heard over the past few years more and more rumblings of, ‘Okay, we need to vaccinate, we need to vaccinate,’” said El-Attrache.
Nowhere were those rumblings louder than at a late October meeting in Paris of bird flu researchers, government officials, and poultry companies, convened by the World Organization for Animal Health — the veterinary counterpart to the World Health Organization. “The goal of this meeting was vaccination,” El-Attrache told me. “That was never the goal of these meetings prior.” At the end of the Paris meeting, a majority of delegates informally voted to support preventive vaccination if trade barriers were resolved, according to the journal Vet Record.
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Courtesy of Jeff Miller/University of Wisconsin-Madison
There is concern in scientific circles that since existing vaccines aren’t 100 percent effective in the long term, there could still be birds who don’t show clinical signs of H5N1 but are infected and could spread the virus to other birds, a phenomenon known as silent infection.
But Leslie Sims, an avian influenza expert who’s led vaccination programs in Asia, said at the Paris meeting that research about the threat of silent infection could be “overinterpreted.”
“There’s no logical reason why we can’t design systems to allow us to make sure that in places where a vaccine is being used, it’s being used in a way which retains zero tolerance for infection,” Sims said.
There’s some precedent for Sims’s claim. Ilaria Capua, a veterinarian and former Italian member of parliament, led Italy’s successful vaccination campaign against another type of bird flu, low-pathogenic H7 avian influenzas, in the early 2000s.
“My experience is that it can be done,” Capua said. “Italy never sent or spread any of its viruses to any of its neighboring countries [and trade partners], and in Europe we are one market.”
In an email to Vox, Sims pointed to Hong Kong, the site of the first major H5N1 outbreak among humans in 1997, as a model for how to achieve zero infections with vaccination and advanced disease surveillance. Although Hong Kong doesn’t export poultry — so it need not worry about trade — its multilevel surveillance system is highly effective, he said, and includes “checking all vaccinated flocks to make sure they have responded to vaccines, tests on birds prior to market, tests on dead birds in the wholesale market, and regular retail market surveillance for detection of avian influenza viruses.”
“It really is a question of political trust and trust-building between the major manufacturers,” said du Marchie Sarvaas. There would need to be agreement and coordination on disease surveillance, regular technical and political discussions, and efforts to prevent using vaccination, or lack of vaccination, as a marketing ploy — by stoking fear over silent infection or anti-vaccine sentiment.
“The industry knows there’s no room for complacency; surveillance, biosecurity, and good flock management have proven to be effective in preventing AI [avian influenza] but sometimes only to a certain extent,” said Robin Horel, president of the International Poultry Council, in an email. “Therefore, vaccination could be a useful additional tool if and when used in a well-established regulatory framework.”
New hope on vaccines
Experts told me that while the conversation around vaccinating poultry in the US is opening up, it’s still early days. Before vaccines are approved for market, the political and trade barriers would need to be solved, and vaccine development and manufacturing would need to be ramped up.
A vaccination campaign in the US probably wouldn’t result in the poultry industry vaccinating all of its 9 billion birds. Instead, it might focus on egg-laying hens and turkeys, as they’re more vulnerable to avian influenza than other birds. Chickens raised for meat, known as broilers, account for around 95 percent of poultry and are much less likely to contract the virus because they’re killed at just about 45 days old. Following this logic, the poultry industry could mitigate much of its bird flu risk by vaccinating just a few percent of its national flock.
Capua added that it would also make sense to prioritize vaccinating chickens and turkeys raised near the migratory pathways where wild birds shed the disease.
There’s also the potential risk of human infection from bird flu, or even the start of a new flu pandemic. Earlier strains of the H5N1 avian flu virus killed more than half of the 865 people who contracted it between 2003 and 2022, according to the World Health Organization — though the strain that’s currently tearing through poultry flocks is reportedly much less transmissible and less severe for humans. There have been only a few reported cases in Western countries this year, none severe.
But that doesn’t mean it couldn’t evolve to efficiently transmit between humans, a nightmare scenario for avian influenza experts — and another reason to consider vaccinating birds despite trade fears. “We don’t know if an H5 virus will ever ignite a pandemic [in humans],” Capua said. “But if it does, it’s not going to be like Covid — it’s likely going to be worse, like much worse.”