In a corporate culture war fueled by a crypto CEO

In a corporate culture war fueled by a crypto CEO

Jesse Powell, a 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 also identify as a race or ethnicity?”

He also questioned their use of preferred pronouns and had a discussion about “who can refer to another person as an n-word”.

And he told workers that questions about women’s intelligence and risk-taking compared to men “were not as decisive as first thought”.

In the process, Mr. Powell, a 41-year-old bitcoin pioneer, ignited a culture war among his more than 3,000 employees, according to interviews with five Kraken employees and internal documents, videos and chat transcripts reviewed by The New York Times . Some workers have openly challenged the CEO over what they consider to be “hurtful” comments. Others have accused him of promoting a hateful workplace and damaging their mental health. Dozens were considering quitting, employees said, who declined to speak publicly for fear of retaliation.

The coronavirus pandemic has seen numerous corporate culture clashes as remote work, injustice and diversity have become key issues in the workplace. At Meta, which owns Facebook, restive employees have been agitating over racial justice. Netflix employees protested the company’s support for comedian Dave Chappelle after he aired a special criticized as transphobic.

But rarely has such a fear been actively fueled by the top boss. And even in the male-dominated cryptocurrency industry, known for a libertarian philosophy that encourages free-wheeling speech, Mr. Powell has taken that ethos to the extreme.

Its boundary crossing comes amid a deepening crypto downturn. On Tuesday, Coinbase, one of Kraken’s main competitors, announced it was laying off 18 percent of its employees after downsizing at Gemini and, two other crypto exchanges. Kraken — which is valued at $11 billion according to PitchBook — is also struggling to cope with the turmoil in the crypto market as Bitcoin’s price has fallen to its lowest since 2020.

Mr. Powell’s culture crusade, which has largely played out on Kraken’s Slack channels, could be part of a broader effort to oust workers who don’t believe in the same values ​​as the crypto industry, which is retreating, 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 in a meeting he didn’t think they should choose their own pronouns. The document and a recording of the meeting were obtained from The Times.

Those who didn’t agree could quit, Mr Powell said, opting for a scheme that provides four months’ wages if they confirm they would never work at Kraken again. Employees have until Monday to decide whether they want to participate.

On Monday, Christina Yee, a Kraken executive, gave those on the fence a nudge, writing in a Slack post that “the CEO, the company, and the culture aren’t going to change in any meaningful way.”

“If someone doesn’t like or hates working here or thinks they’re hateful or have bad character,” she said, “work somewhere it doesn’t disgust you.”

After The Times contacted Kraken about its internal discussions, the company released 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 has more than doubled its workforce in recent years, “we felt the time was right to strengthen our mission and values.”

Mr Powell and Ms Yee did not respond to requests for comment. in the a twitter thread On Wednesday, in anticipation of this article, Mr Powell said that “about 20 people” are not on board Kraken’s culture and that while teams should have more input, he is “much better educated in political issues”.

“People are triggered by everything and cannot abide by the ground rules of honest debate,” he wrote. “Back to the dictatorship.”

The Kraken conflict demonstrates the difficulty of translating crypto’s 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 digital currencies. Many early Bitcoin proponents championed freedom of ideas and despised government intervention; More recently, some have rejected identity politics and demands for political correctness.

“A lot of the big cetaceans and big representatives are now trying to bury that story,” Mr. Brunton said. “The people that are left and really sticking with it feel more competitive.”

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

In 2011, Mr. Powell worked at Mt. Gox, one of the first crypto exchanges, and helped the company deal with 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 of directors. The start-up operates a crypto exchange where investors can trade digital assets. Kraken was headquartered in San Francisco but is now a largely remote operation. It has raised funds from investors such as Hummingbird Ventures and Tribe Capital.

As cryptocurrency prices have skyrocketed in recent years, Kraken has become 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 plans to take the company public.

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

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

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

In response, Kraken’s parent company sued the anonymous reviewers and tried to force Glassdoor to reveal their identities. A court has ordered Glassdoor to release some names.

On Glassdoor, Mr. Powell has an approval rating of 96 percent. 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 news viewed by The Times. The group goes by the label “…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 internally posted a video to another Slack group, sparking the latest uproar. The video showed two women saying they preferred $100 in cash to bitcoin, which was worth more than $40,000 at the time. “But that’s how the female brain works,” commented the employee.

Mr Powell intervened. He said the debate about women’s mental abilities was unresolved. “Most American ladies have been brainwashed in this day and age,” he added in a Slack exchange observed by The Times.

His statements caused a sensation.

“It is hurtful to the person we are asking for guidance and advocacy to joke that we are being brainwashed in this regard or to downplay this situation,” one staffer wrote.

“It’s not encouraging to see your gender’s thoughts, skills and preferences being so debated,” wrote another. “It’s incredibly different and harmful to women.”

“Being offended doesn’t mean harm,” Mr. Powell replied. “There’s no harm in discussing science, biology, trying to determine facts of the world.”

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

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

That same day, he invited collaborators to join him in a Slack channel called “Debate Pronouns,” in which he suggested that people should use pronouns based not on their gender identity but on their birth sex, according to Conversations, The Times has seen. 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 the conversation was about who could use the N-word, which he noted was not a swear word when used affectionately.

Mr. Powell also distributed the culture document entitled Kraken Culture Explained.

“We do not prohibit insults,” reads one section. Another said employees should show “tolerance for diverse thinking”; do not flag comments as “toxic, hateful, racist, x-phobic, unhelpful, etc.”; and “avoid censoring others.”

It also stated that the company had waived vaccination requirements in the name of “Krakenite physical autonomy.” A section entitled “Self-Defense” stated 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.

The edited version of the document, which Kraken released publicly, omitted mentions of Covid-19 vaccinations and the company’s belief in letting people arm themselves.

Those who disagreed with the document were encouraged to leave. At the June 1 meeting, Mr. Powell introduced the “Jet Ski Program,” which the company describes as a “recommitment” to its core values. Anyone who felt unwell had two weeks’ leave and four months’ salary.

“If you decide to leave Kraken,” reads a memo about the program, “we want it to feel like you’re jumping on a jet ski and happily embarking on your next adventure!”

Kitty Bennett and Aimee Ortiz contributed research.