Inside a Corporate Culture War Stoked by a Crypto C.E.O.
Jesse Powell, founder and CEO of Kraken Digital Asset Exchange, 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 questioned their use of preferred pronouns and led a discussion about “who can refer to another person as the N-word.”
And he told other employees that questions about female intelligence and risk appetite compared with male 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 3,000 employees, according to NY times interview with five Kraken employees, as well as internal documents, videos, and chat logs reviewed by The New York Times. Some employees have challenged the CEO for what they see as his “hurtful” comments. Others have accused him of fostering a hateful workplace and causing mental health damage. Dozens of employees, who did not want to speak publicly for fear of retaliation, are considering quitting.
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Corporate culture wars have abounded during the coronavirus pandemic as remote work, inequity and diversity became central issues at workplaces. At Meta, restive workers agitated over racial justice. At Netflix, workers protested the company’s support for the comedian, Dave Chappelle, after he aired a special episode that was criticized as transphobic.
But rarely has such angst been actively stoked by a company leader. And even in the male-dominated Cryptocurrency market, 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 slump in cryptocurrency prices. On Tuesday, Coinbase exchange, one of Kraken Digital Asset Exchange’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. According to Pitchbook, Kraken, which is valued at $11 billion, is also grappling with the volatility in the cryptocurrency market, as the price of Bitcoin plunged to its lowest value since 2020.
Mr. Powell’s culture campaign, which has largely played out on Kraken’s Slack channels, perhaps is a part of a wider effort to push out employees who don’t believe in the same values as the cryptocurrency space is retrenching, the employees said.
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This month, Mr. Powell unveiled a 31-page cultural document outlining Kraken Digital Asset Exchange’s “libertarian philosophical values” and commitment to “diversity of thought,” and told workers in 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 employees who disagreed could quit, Mr. Powell said, and opt into a program that would provide four months of salary if they confirmed that they would never work at Kraken exchange again. Employees have until Monday to decide.
On Monday, Christina Yee, a Kraken Digital Asset Exchange executive, gave those on the fence a nudge, writing in a Slack post that the “C.E.O., 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 further said, “work somewhere that doesn’t disgust you.”
After The Times got in touch with the Kraken Digital Asset Exchange regarding its internal conversations, the firm publicly posted an edited version of its culture document on Tuesday. In a statement, Alex Rapoport, a spokeswoman, said Kraken exchange does not tolerate “inappropriate discussions.” She added that as the firm more than doubled its workforce 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, Mr. Powell said that “about 20 people” were not on board with the organization’s culture and that even though team members should have more input, he was “way more studied on policy topics.”
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“People get triggered by everything and can’t conform to basic rules of honest debate,” he wrote. “Back to dictatorship.”
The workplace cultural conflict at Kraken Exchange is an example of how the difficulty of translating cryptocurrency’s political ideologies to a modern workplace, said Finn Brunton, a technology professor at the University of California, Davis, who wrote a book in 2019 about the history of Digital Currencies. Several 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 fiat currency.
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In 2011, Mr. Powell worked on Mt. Gox, one of the first cryptocurrency exchanges, helping the firm navigate a security issue. (Mt. Gox collapsed in the year 2014.)
Mr. Powell founded Kraken digital asset exchange later in 2011 with Thanh Luu, who sits on the company’s board of directors. The start-up operates a Cryptocurrency Exchange where traders and investors can buy/sell digital assets. The company had its headquarters in San Francisco but is now a largely remote operation. It has already raised funds from investors like Hummingbird Ventures and Tribe Capital.
As cryptocurrency prices skyrocketed in recent years, Kraken Exchange became the second-largest cryptocurrency exchange in the United States behind Coinbase, according to CoinMarketCap, an industry data tracker. Mr. Powell said last year that the company was planning to go public.
He also insisted that some employees subscribe to Bitcoin’s philosophical underpinnings. “We have this ideological purity test,” Mr. Powell said about the firm’s hiring process on a 2018 cryptocurrency podcast. “A test of whether you’re kind of aligned with the vision of Bitcoin and Crypto.”
In 2019, former employees of Kraken Exchange posted scathing comments about the firm on Glassdoor, a website where employees write anonymous reviews of their employers.
One reviewer wrote, “Kraken is the perfect allegory for any utopian government ideal. 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. Acourt-ordered Glassdoor to turn over some names.
On Glassdoor, Mr. Powell has a 96% approval rating. The website 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 worker posted a video on a different Slack group that set off the latest fracas. 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 the female brain works,” the employee further commented. Mr. Powell chimed in and said that 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 isn’t 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 responded. “A discussion about science, biology, attempting to determine facts of the world cannot be harmful.”
At a company 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. The same day, he invited workers to join him on 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 disabled replies to the thread after it became contentious.
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Mr. Powell reopened the discussion 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 organizational cultural document, titled “Kraken Culture Explained.”
“We Don’t Forbid Offensiveness,” read one section. Another said workers 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 firm had eschewed vaccine requirements in the name of “Kraken its 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 the company publicly posted, mentions of Covid-19 vaccinations and the company’s belief in letting people arm themselves were omitted.
Employees who disagreed with the document were encouraged to depart. 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’ salary.
“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!”
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