Inside Kraken’s Culture War Stoked by Its CEO

Jesse Powell, a founder and CEO of Kraken, one of the world’s largest cryptocurrency exchanges, recently asked its 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 on “who can refer to another person as the N-word.”

And he told the workers that questions about women’s intelligence and willingness to take risks compared to men ‘were not as settled as one might have initially thought.’

In the process, Mr. Powell, a 41-year-old Bitcoin pioneer, started a cultural 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 CEO for what they see as his “hurtful” comments. Others have accused him of promoting a hateful workplace and harming 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 flourished during the coronavirus pandemic as telework, inequality and diversity have become key issues in the workplace. At Meta, which owns Facebook, troubled employees have agitated over racial justice. At Netflix, employees protested the company’s support for comedian Dave Chappelle after he broadcast a special that was criticized as transphobic.

But rarely has such anxiety been actively encouraged by the top manager. And even in the male-dominated cryptocurrency industry, which is known for a libertarian philosophy that promotes free speech, Mr. Powell has taken that ethos to the extreme.

His boundary shift comes in the midst of an ever-deeper crypto-decline. 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. The crack – which is valued at 11 billion dollars, according to PitchBook – is also struggling with the turbulence in the crypto market, as the price of Bitcoin has plummeted to its lowest point since 2020.

Mr Powell’s cultural crusade, which has largely unfolded on Kraken’s Slack channels, may be part of a broader effort to blackmail workers who do not believe in the same values ​​that the crypto industry is about to retire, he said. the employees.

This month, Mr. Powell unveiled a 31-page cultural document outlining Kraken’s “libertarian philosophical values” and commitment to “diversity of thought,” and told staff in a meeting that he did not think 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 choose a program that would provide four months’ pay if they confirmed they would never work at Kraken again. Employees have until Monday to decide whether they want to join.

On Monday, Christina Yee, a Kraken leader, gave those on the fence a push, writing in a Slack post that “CEO, company and culture are not is going to change in a meaningful way. “

“If someone strongly dislikes or hates working here or thinks they are hateful or have a bad character,” she said, “work somewhere that does not detest you.”

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

Mr. Powell and Ms. Yee did not respond to requests for comment. IN a Twitter thread On Wednesday, pending this article, Mr. Powell said that “about 20 people” were not involved in Kraken’s culture, and that although the teams should have more input, he was “much more studied on political issues.”

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

The Kraken conflict shows the difficulty of translating crypto’s political ideologies into a modern workplace, said Finn Brunton, professor of technology studies at the University of California, Davis, who wrote a 2019 book on the history of digital currencies. Many early Bitcoin supporters championed freedom of thought and despised government intrusion; lately, some have rejected identity politics and called for political correctness.

“A lot of the big whales and big reps now – they’re trying to bury that story,” Brunton said. “The people who are left who really stick to it feel more at odds.”

Mr. Powell, who attended California State University, Sacramento, started an online store in 2001 called Lewt, which sold virtual amulets and drinks to gamblers. A decade later, he embraced Bitcoin as an alternative to state-subsidized money.

In 2011, Mr. Powell worked at Mt. Gox, one of the first crypto exchanges, helped the company navigate 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 start-up 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 such as Hummingbird Ventures and Tribe Capital.

As cryptocurrency prices have skyrocketed in recent years, Kraken 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 he planned to announce the company.

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

In 2019, former Kraken employees posted sharp 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,” wrote one reviewer. “Great ideas in theory, but in practice they end up with very controlling, negative and distrustful.”

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 surrender some names.

At Glassdoor, Mr. Powell has an approval rating of 96 percent. 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 reports seen by The Times. The group is labeled “… and you thought 4chan was full of trolls,” referring to the anonymous online bulletin board known for hate speech and the radicalization of some of the gunmen behind the mass shooting.

In April, a Kraken employee posted a video internally on another Slack group that started the latest relationship. The video featured two women saying they preferred $ 100 in cash to a Bitcoin, which at the time cost more than $ 40,000. “But this is how the female brain works,” the employee commented.

Mr. Powell came in. He said that the debate about women’s mental abilities was unresolved. “Most American women have been brainwashed in modern times,” he added on Slack, in an exchange of views seen by The Times.

His comments attracted attention.

“For the person we look to for leadership and advocacy to joke that we are brainwashed in this context or to shed light on this situation is hurtful,” wrote a female employee.

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

“To be offended is not to be hurt,” Powell replied. “A discussion of science, biology, attempts to establish facts about the world can not be harmful.”

At a company-wide meeting on June 1, Powell discussed Kraken’s global footprint, with workers in 70 countries, as he moved on 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 let 3,000 people customize their pronouns,” he said.

On the same day, he invited employees to join him on a Slack channel called “debate pronouns”, in which he suggested that people use pronouns based not on their gender identity, but their gender at birth, according to conversations seen by The Times. He closed the reply to the thread after it was disputed.

Mr. Powell reopened the discussion about Slack the next day to ask why people could not choose race or ethnicity. He later said that the conversation was about who could use the N-word, which he remarked was not a form when used lovingly.

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

“We do not prohibit offensive acts,” some read. Another said that 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 avoided vaccine requirements in the name of “krakenitic bodily autonomy.” A section entitled “self-defense” states 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 released to the public, 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 described as a “re-commitment” to its core values. Everyone who felt uncomfortable had two weeks to spare, with four months’ salary.

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

Kitty Bennett and Aimee Ortiz contributed research.