Crypto

Inside a corporate culture war stoked by a cryptocurrency CEO

Jesse Powell, founder and CEO of Kraken, one of the world’s largest cryptocurrency exchanges, recently asked his employees, “If you can identify as a gender, can you identify as a race or ethnicity?”

He also questioned his use of preferred pronouns and led a discussion about “who can refer to someone else as the N-word”.

And he told workers that questions about women’s intelligence and risk appetite compared to men “were not as settled as might have been initially thought.”

In the process, Powell, a 41-year-old Bitcoin pioneer, started a culture war among his 3,000-plus workers, according to interviews with five Kraken employees, as well as internal documents, videos, and chat logs reviewed by The New Times. of York. Some workers have openly challenged the CEO over what they see as his “hurtful” comments. Others have accused him of fostering a hateful workplace and damaging his mental health. Dozens are considering resigning, said the employees, who did not want to speak publicly for fear of retaliation.

Corporate culture wars have abounded during the coronavirus pandemic, as remote work, inequality and diversity have become central issues in workplaces. In Meta, which owns Facebook, restless employees have been agitating for racial justice. At Netflix, employees protested the company’s support for comedian Dave Chappelle after he aired a special that was criticized as transphobic.

But rarely has the top boss actively fanned such angst. And even in the male-dominated cryptocurrency industry, which is known for a libertarian philosophy that promotes nonchalant speech, Powell has taken that ethic to the extreme.

His limit push comes amid a deepening crypto slump. On Tuesday, Coinbase, one of Kraken’s main competitors, said it would lay off 18 percent of its employees, following job cuts at Gemini and Crypto.com, two other cryptocurrency exchanges. Kraken, which is valued at $11 billion according to PitchBook, is also dealing with turbulence in the crypto market as the price of Bitcoin has plunged to its lowest point since 2020.

Mr. Powell’s cultural crusade, which has played out largely on Kraken’s Slack channels, may be part of a broader effort to push out workers who don’t believe in the very values ​​the crypto industry is undermining, they said. the employees.

This month, Powell released a 31-page cultural document outlining Kraken’s “libertarian philosophical values” and its commitment to “diversity of thought,” telling employees at a meeting that he didn’t think they should choose their own pronouns. The Times obtained the document and a recording of the meeting.

Those who disagreed could resign, Powell said, and opt for a program that would provide four months of pay if they said they would never work at Kraken again. Employees have until June 20 to decide if they want to participate.

On Monday, Christina Yee, an executive at Kraken, nudged those on the fence, writing in a Slack post that the “CEO, company, and culture are No It’s going to change in a significant way.”

“If someone dislikes or hates working here or thinks that those who are here are obnoxious or have a bad character,” he said, “work in a place that you don’t dislike.”

After The Times contacted Kraken about its internal talks, the company publicly released an edited version of its culture document on Tuesday. In a statement, Alex Rapoport, a spokeswoman, said that Kraken does not tolerate “inappropriate discussions.” She added that with the company more than doubling its workforce in recent years, “we felt the time was right to reinforce our mission and values.”

Mr. Powell and Ms. Yee did not respond to requests for comment. In a twitter thread on Wednesday before this article, Mr. Powell said that “about 20 people” disagreed with Kraken’s culture and that while teams should have more input, he was “much more educated on policy issues.” “.

“People get emotional about everything and can’t conform to the ground rules of honest debate,” he wrote. “Back to the dictatorship”.

The conflict on Kraken shows the difficulty of translating cryptocurrency political ideologies into a modern workplace, said Finn Brunton, a professor of technology studies at the University of California, Davis, who wrote a 2019 book on the history of cryptocurrencies. digital currencies. Many of Bitcoin’s early proponents championed freedom of ideas and disdained government intrusion; more recently, some have rejected identity politics and calls for political correctness.

“A lot of the big whales and big guys are now trying to bury that story,” Brunton said. “The people who are left who really hold on to that feel more besieged.”

Mr. Powell, who attended California State University, Sacramento, opened an online store in 2001 called Lewt that sold virtual charms and potions to gamers. A decade later, he embraced Bitcoin as an alternative to government-backed money.

In 2011, Mr. Powell worked at Mt. Gox, one of the first cryptocurrency exchanges, helping the company overcome a security issue. (Mt. Gox collapsed in 2014).

Mr. Powell later founded Kraken in 2011 with Thanh Luu, who sits on the company’s board. The startup operates a crypto exchange where investors can trade digital assets. Kraken used to be based in San Francisco, but is now a largely remote operation. He has raised funds from investors such as Hummingbird Ventures and Tribe Capital.

As cryptocurrency prices soared in recent years, Kraken became the second largest cryptocurrency exchange in the United States behind Coinbase, according to CoinMarketCap, an industry data tracker. Powell said last year that he planned to take the company public.

He also insisted that some workers subscribe to the philosophical underpinnings of Bitcoin. “We have this ideological purity test,” Powell said of the company’s hiring process in a 2018 crypto podcast. “A test of whether you’re aligned with the vision of Bitcoin and crypto.”

In 2019, former Kraken employees posted scathing comments about the company on Glassdoor, a website where workers write anonymous reviews of their employers.

“Kraken is the perfect allegory for any ideal of utopian government,” wrote one reviewer. “Great ideas in theory but in practice they end up being very controlling, negative and distrustful.”

In response, Kraken’s parent company filed a lawsuit against the anonymous reviewers and tried to force Glassdoor to reveal their identities. The court ordered Glassdoor to turn over some names.

On Glassdoor, Powell has a 96 percent approval rating. The site adds: “This employer has taken legal action against the reviewers.”

At Kraken, Powell is part of a Slack group called trolling-999plus, according to messages seen by The Times. The group is labeled “…and you thought 4chan was full of trolls,” referring to the anonymous online message board known for inciting hatred and radicalizing some of the gunmen behind mass shootings.

In April, a Kraken employee posted a video internally to a different Slack group that sparked the latest fight. The video featured two women who said they preferred $100 in cash to Bitcoin, which cost more than $40,000 at the time. “But that’s how the female brain works,” the employee commented.

Powell intervened. He said the debate over women’s mental abilities was unresolved. “Most American ladies have been brainwashed in modern times,” she added on Slack, in an exchange seen by The Times.

His comments generated fury.

“It is hurtful that the person we are looking to for leadership and advocacy jokes that we were brainwashed in this context or makes fun of this situation,” one employee wrote.

“Not encouraging to see the minds, abilities, and preferences of your gender discussed in this way,” wrote another. “It’s incredibly different and detrimental to women.”

“To be offended is not to be harmed,” Powell responded. “A discussion about science, biology, trying to determine facts of the world cannot be harmful.”

At a company-wide meeting on June 1, Mr. Powell was discussing Kraken’s global footprint, with workers in 70 countries, when he veered to the topic of preferred pronouns. It was time for Kraken to “control the language,” he said in the video call.

“It’s just not practical to allow 3,000 people to personalize their pronouns,” he said.

That same day, he invited employees to join him in a Slack channel called “debate pronouns,” where he suggested that people use pronouns not based on their gender identity but on their sex at birth, according to conversations seen by TheTimes. He closed replies to the thread after it became controversial.

Mr. Powell reopened the discussion on Slack the next day to ask why people couldn’t choose their race or ethnicity. He later said that the conversation was about who could use the N-word, which he noted was not an insult when used affectionately.

Mr. Powell also circulated the culture document, titled “Kraken Culture Explained.”

“We do not prohibit offense,” read one section. Another said employees should show “tolerance for diverse thinking,” refraining from labeling comments “toxic, hateful, racist, xphobic, useless, etc.” and “avoid censoring others.”

He also explained that the company has avoided vaccine requirements in the name of “Krakenite’s bodily autonomy.” In a section titled “self-defense,” he said that “law-abiding citizens should be able to arm themselves.”

“You may need to regularly consider these crypto and libertarian values ​​when making employment decisions,” he said.

In the redacted version of the document that Kraken released publicly, mentions of Covid vaccines and the company’s belief in allowing people to arm themselves were omitted.

Those who disagreed with the document were encouraged to withdraw. At the June 1 meeting, Mr. Powell unveiled the “Jet Ski Program,” which the company has called a “reunion” with its core values. Anyone who felt uncomfortable had two weeks to leave, on four months’ pay.

“If you want to leave Kraken,” a memo about the show read, “we want you to feel like you’re hopping on a jet ski and happily heading off on your next adventure.”

kitty bennett Y Aimee Ortiz contributed research.

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