Inside a Corporate Culture War Stoked by a Crypto CEO
Jesse Powell, a founder and chief executive of Kraken, one of the world’s largest cryptocurrency exchanges, recently asked his employees, “If you can identify as a sex, can you identify as a race or ethnicity?”
He also questioned their use of preferred pronouns and led a discussion about “who can refer to another person as the N word.”
And he told workers that questions about women’s intelligence and risk appetite compared to men’s were “not as settled as one might have initially thought.”
In the process, Mr. Powell, a 41-year-old Bitcoin pioneer, ignited a culture war among his more than 3,000 workers, according to interviews with five Kraken employees, as well as internal documents, videos and chat logs reviewed by The New York Times. Some workers have openly challenged the chief executive for what they see as his “hurtful” comments. Others have accused him of fostering a hateful workplace and damaging their mental health. Dozens are considering quitting, 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, inequity and diversity have become central issues at workplaces. At Meta, which owns Facebook, restive employees have agitated over 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 such angst been actively stoked by the top boss. And even in the male-dominated cryptocurrency industry, which is known for a libertarian philosophy that promotes freewheeling speech, Mr. Powell has taken that ethos to an extreme.
His boundary pushing comes amid a deepening crypto downturn. On Tuesday, Coinbase, one of Kraken’s main competitors, said it was laying off 18 percent of its employees, following job cuts at Gemini and Crypto.com, two other crypto exchanges. Kraken – which is valued at $ 11 billion, according to PitchBook – is also grappling with the turbulence in the crypto market, as the price of Bitcoin has plunged to its lowest point since 2020.
Mr. Powell’s culture crusade, which has largely played out on Kraken’s Slack channels, may be part of a wider effort to push out workers who don’t believe in the same values as the crypto industry is retrenching, the employees said.
This month, Mr. Powell unveiled a 31-page culture document outlining Kraken’s “libertarian philosophical values” and commitment to “diversity of thought,” and told employees at a meeting that he did not believe they should choose their own pronouns. The document and a recording of the meeting were obtained by The Times.
Those who disagreed could quit, Mr. Powell said, and opt into a program that would provide four months of pay if they affirmed that they would never work at Kraken again. Employees have until Monday to decide if they want to take part.
On Monday, Christina Yee, a Kraken executive, gave those on the fence a nudge, writing in a slack post that the “CEO, company, and culture are not going to change in a meaningful way. ”
“If someone strongly dislikes or hates working here or thinks those here are hateful or have poor character,” she said, “work somewhere that doesn’t disgust you.”
After The Times contacted Kraken about its internal conversations, the company publicly posted an edited version of its culture document on Tuesday. In a statement, Alex Rapoport, a spokeswoman, said Kraken does not tolerate “inappropriate discussions.” She added that as the company more than doubled its work force in recent years, “we felt the time was right to reinforce our mission and our values.”
Mr. Powell and Ms. Yee did not respond to requests for comment. In a Twitter thread on Wednesday in anticipation of this article, Mr. Powell said that “about 20 people” were not on board with Kraken’s culture and that even though teams should have more input, he was “way more studied on policy topics.”
“People get triggered by everything and can’t conform to basic rules of honest debate,” he wrote. “Back to dictatorship.”
The conflict at Kraken shows the difficulty of translating crypto’s political ideologies to a modern workplace, said Finn Brunton, a technology studies professor at the University of California, Davis, who wrote a book in 2019 about the history of digital currencies. Many early Bitcoin 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 representatives now – they’re trying to bury that history,” Mr. Brunton said. “The people who are left who really hold to that are feeling more embattled.”
Mr. Powell, who attended California State University, Sacramento, started an online store in 2001 called Lewt, which sold virtual amulets and potions to gamers. A decade later, he embraced Bitcoin as an alternative to government-backed money.
In 2011, Mr. Powell worked on Mt. Gox, one of the first crypto exchanges, helping the company navigate a security issue. (Mt. Gox collapsed in 2014.)
Mr. Powell founded Kraken later in 2011 with Thanh Luu, who sits on the company’s board. The start-up operates a crypto exchange where investors can trade digital assets. Kraken had its headquarters in San Francisco but is now a largely remote operation. It has raised funds from investors like Hummingbird Ventures and Tribe Capital.
As cryptocurrency prices skyrocketed in recent years, Kraken became the second-largest crypto exchange in the United States behind Coinbase, according to CoinMarketCap, an industry data tracker. Mr. Powell said last year that he was planning to take the company public.
He also insisted that some workers subscribe to Bitcoin’s philosophical underpinnings. “We have this ideological purity test,” Mr. Powell said about the company’s hiring process on a 2018 crypto podcast. “A test of whether you’re kind of 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 utopian government ideal,” one reviewer wrote. “Great ideas in theory but in practice they end up very controlling, negative and mistrustful.”
In response, Kraken’s parent company sued the anonymous reviewers and tried to force Glassdoor to reveal their identities. A court ordered Glassdoor to turn over some names.
On Glassdoor, Mr. Powell has a 96 percent approval rating. The site adds, “This employer has taken legal action against reviewers.”
At Kraken, Mr. Powell is part of a Slack group called trolling-999plus, according to messages viewed by The Times. The group is labeled “… and you thought 4chan was full of trolls,” referring to the anonymous online message board known for hate speech and radicalizing some of the gunmen behind mass shootings.
In April, a Kraken employee posted a video internally on a different Slack group that set off the latest failure. The video featured two women who said they preferred $ 100 in cash over a Bitcoin, which at the time cost more than $ 40,000. “But this is how female brain works,” the employee commented.
Mr. Powell chimed in. He said the debate over women’s mental abilities was unsettled. “Most American ladies have been brainwashed in modern times,” he added on Slack, in an exchange viewed by The Times.
His comments fueled a furor.
“For the person we look to for leadership and advocacy to joke about us being brainwashed in this context or make light of this situation is hurtful,” wrote one female employee.
“It’s not heartening to see your gender’s minds, capabilities, and preferences discussed like this,” another wrote. “It’s incredibly othering and harmful to women.”
“Being offended is not being harmed,” Mr. Powell replied. “A discussion about science, biology, attempting to determine facts of the world cannot be harmful.”
At a companywide 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 on the video call.
“It’s just not practical to allow 3,000 people to customize 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 based not on their gender identity but their sex at birth, according to conversations seen by The Times. He shut down replies to the thread after it became contentious.
Mr. Powell reopened discussion on Slack the next day to ask why people couldn’t choose their race or ethnicity. He later said the conversation was about who could use the N-word, which he noted wasn’t a slur when used affectionately.
Mr. Powell also circulated the culture document, titled “Kraken Culture Explained.”
“We Don’t Forbid Offensiveness,” read one section. Another said employees should show “tolerance for diverse thinking”; refrain from labeling comments as “toxic, hateful, racist, x-phobic, unhelpful, etc.”; and “avoid censoring others.”
It also explained that the company had eschewed vaccine requirements in the name of “Krakenite bodily autonomy.” In a section titled “self-defense,” it said that “law-abiding citizens should be able to arm themselves.”
“You may need to regularly consider these crypto and libertarian values when making work decisions,” it said.
In the edited version of the document that Kraken publicly posted, mentions of Covid-19 vaccinations and the company’s belief in letting people arm themselves were omitted.
Those who disagreed with the document were encouraged to leave. At the June 1 meeting, Mr. Powell unveiled the “Jet Ski Program,” which the company has labeled a “recommitment” to its core values. Anyone who felt uncomfortable had two weeks to leave, with four months’ pay.
“If you want to leave Kraken,” read a memo about the program, “we want it to feel like you are hopping on a jet ski and heading happily to your next adventure!”
Kitty Bennett and Aimee Ortiz contributed research.