Inside a Corporate Culture War Stocked By A Crypto CEO

Inside a Corporate Culture War Stocked By A Crypto CEO

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

He also questioned their use of preferred pronouns and started 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 “are not as clear-cut as originally thought.”

In the process, 41-year-old Bitcoin pioneer Mr. Powell ignited a culture war among his more than 3,000 employees, according to internal documents, videos, and chat logs reviewed by The New, as well as interviews with five Kraken employees. York Times. Some workers openly challenged the chief executive for comments they saw as “offensive”. Others accused him of promoting a hateful workplace and harming their mental health. Employees, who are reluctant to speak publicly for fear of retaliation, said dozens are considering resigning.

Corporate culture battles have raged during the coronavirus pandemic as remote work, inequality and diversity have become key issues in the workplace. At Facebook owner Meta, restless employees agitated about racial justice. Employees at Netflix protested the company’s support for comedian Dave Chappelle after he aired a special that was criticized as transphobic.

But rarely such anxiety is actively triggered by the best boss. And even in the male-dominated cryptocurrency industry, which is known for a libertarian philosophy that promotes free speech, Mr. Powell has taken that ethic to an extreme.

Its push to the limits comes amid a deepening crypto crisis. On Tuesday, Coinbase, one of Kraken’s main competitors, said it laid off 18 percent of its employees following layoffs at two other crypto exchanges, Gemini and Crypto.com. Kraken, which is worth $11 billion according to PitchBook, is also grappling with turbulence in the crypto market as the Bitcoin price has dropped to its lowest point since 2020.

Powell’s culture war, played out largely on Kraken’s Slack channels, could be part of a broader effort to kick out workers who don’t believe in the same values ​​that the crypto industry is declining, employees said.

This month, Mr. Powell unveiled a 31-page culture document outlining Kraken’s “liberal philosophical values” and commitment to “diversity of thought”, telling employees at a meeting that he doesn’t believe they should choose their own pronouns. Documentation and recording of the meeting was obtained by The Times.

Mr. Powell said those who disagreed could resign and join a program that would provide four months’ pay if they declared 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, wrote in a Slack post, “CEO, company and culture, immortality will change significantly.”

“If someone absolutely doesn’t like or hates working here, or thinks they’re hateful or bad-tempered,” he said, “work somewhere that doesn’t disgust you.”

After The Times contacted Kraken about its internal conversations, the company released an edited version of its culture document to the public on Tuesday. In a statement, a spokesperson, Alex Rapoport, said Kraken does not tolerate “inappropriate discussions”. As the company has more than doubled its workforce in recent years, “we felt it was time to strengthen our mission and values,” he added.

Mr. Powell and Ms. Yee did not respond to requests for comment. Inside a Twitter thread On Wednesday, in anticipation of this article, Mr. Powell said “about 20 people” disagreed with Kraken’s culture and that “a lot more has been done on policy issues”, even if teams had to contribute more.

“People are triggered by everything and fail to follow the ground rules of honest discussion,” he wrote. “Back to dictatorship.”

Finn Brunton, professor of technology studies at the University of California at Davis, who wrote a book on the history of digital currencies in 2019, said the conflict at Kraken illustrates the challenge of translating crypto’s political ideologies into a modern workplace. Many early Bitcoin advocates advocated freedom of opinion and downplayed government intervention; More recently, some have rejected identity politics and called for political correctness.

“Most of the big whales and large representatives are now trying to bury that history,” said Mr Brunton. “People who really hold on to it feel more embarassed.”

Attending California State University, Sacramento, Mr. Powell opened an online store called Lewt in 2001 that sold virtual amulets and potions to players. Ten years later, it adopted Bitcoin as an alternative to government-backed money.

In 2011, Mr. Powell founded one of the first crypto exchanges, Mt. Gox, he helped the company fix a security issue. (Mount Gox collapsed in 2014.)

Mr. Powell founded Kraken in 2011 with Thanh Luu, who sits on the company’s board of directors. The startup operates a crypto exchange where investors can trade digital assets. Kraken was headquartered in San Francisco, but is now largely a remote operation. It has raised funds from investors like Hummingbird Ventures and Tribe Capital.

According to CoinMarketCap, an industry data tracker, crypto prices have skyrocketed in recent years, making Kraken the second largest crypto exchange in the United States after Coinbase. Mr. Powell said last year he plans to take the company public.

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

In 2019, former Kraken employees posted harsh comments about the company on Glassdoor, a website where workers wrote anonymous comments about their employers.

“The Kraken is the perfect allegory for any utopian ideal of government,” wrote one commentator. “They’re great ideas in theory, but in practice they get very controlling, negative, and insecure.”

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 hand over some names.

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

According to posts viewed by The Times, Mr. Powell is part of a Slack group on Kraken called trolling-999plus. The group was labeled “…and you thought 4chan was full of trolls,” referring to the anonymous online message board known for its hate speech and radicalizing some of the gunmen behind the mass murders.

In April, a Kraken employee posted a video internally to a different Slack group kicking off the latest frock. The video featured two women who said they would rather have $100 in cash than a Bitcoin, which was worth more than $40,000 at the time. “But that’s how the female brain works,” the employee said.

Mr. Powell intervened. He said the debate about women’s mental abilities is unresolved. “Most American women have been brainwashed in modern times,” he added to Slack in an exchange viewed by The Times.

His comments fueled outrage.

“It hurts when the person we seek leadership and advocacy from jokes about or underestimates our brainwashing in this context,” one female employee wrote.

“It is not heartwarming to see the minds, talents, and preferences of your gender being discussed in this way,” wrote another. “It is incredibly marginalizing and harmful to women.”

“To be hurt is not to be hurt,” replied Mr. Powell. “A discussion about science, biology, trying to determine the facts of the world can’t 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 returned to the topic of preferred pronouns. He said in the video call it’s time for Kraken to “check the language.”

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

That same day, he invited her to join him on a Slack channel called “discussion pronouns,” where he suggested that employees use pronouns based on their gender at birth, not their gender identity, according to conversations seen by The Times. After starting the discussion, he closed the replies to the topic.

Mr. Powell restarted 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 a scribble when used lovingly.

Mr. Powell also distributed the culture document entitled “Kraken Culture Statement”.

Read “We Do Not Prohibit Aggression,” a chapter. Another is that employees should show “tolerance to differing opinions”; comments “toxic, hateful, racist, x-phobic, useless, etc.” Avoid labeling; and “avoid censoring others.”

He also explained that the company is avoiding vaccine requirements in the name of “Krakenite bodily autonomy.” The 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 business decisions,” he said.

The edited version of Kraken’s publicly released document made no mention of Covid-19 vaccines and the company’s belief in allowing people to arm themselves.

Those who disagreed with the document were encouraged to leave. At the June 1 meeting, Mr. Powell unveiled the “Jet Ski Program”, which he described as a “recommitment” to the company’s core values. Anyone who felt uncomfortable had two weeks to leave with four months’ salary.

“If you want to leave Kraken,” read a note about the program, “we want you to feel like you’re jumping on a jet ski and happily going on your next adventure!”

kitty bennett and Aimee Ortiz contributed to research.

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