Jesse Powell, a founder and the chief executive of Kraken, one of the world’s largest cryptocurrency exchanges, recently asked his associates, “If you can identify as a gender, 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 resolved as one might initially think.”
During the trial, 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, as well as internal documents, videos and chat logs reviewed by The New York Times. Some employees have openly challenged the CEO for what they see as his “hurtful” comments. Others have accused him of fostering a hateful workplace and harming their mental health. Dozens are considering quitting, the employees said, who refused to speak publicly for fear of reprisals.
During the coronavirus pandemic, there have been many corporate culture wars as remote work, inequality and diversity have become central issues in the workplace. At Meta, which owns Facebook, unruly employees have agitated about racial justice. At Netflix, employees protested the company’s support for comedian Dave Chappelle after he aired a special criticized as transphobic.
But rarely is such fear actively fueled 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 took that ethos to the extreme.
Its groundbreaking comes amid an ever-deepening cryptocurrency. On Tuesday, Coinbase, one of Kraken’s main competitors, said it was laying off 18 percent of its employees after job losses at Gemini and Crypto.com, two other crypto exchanges. Kraken — which is valued at $11 billion according to PitchBook — is also struggling with the crypto market turbulence, as Bitcoin’s price has fallen to its lowest point since 2020.
The Culture Crusade of Mr. Powell, who has largely played himself on Kraken’s Slack channels, may be part of a wider effort to push away workers who don’t believe in the same values as the crypto industry is cutting back, the workers said.
This month, Mr. Powell released 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 by The Times.
Those who disagreed could stop, said Mr. Powell, and opt for a program that would pay for four months if they confirmed 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 the people on the fence a nudge, writing in a Slack post that the “CEO, the company and the culture not will change in a meaningful way.”
“If anyone here hates or hates working or thinks those people here are hateful or have bad character,” she said, “work somewhere that doesn’t disgust you.”
After The Times contacted Kraken about his internal conversations, the company publicly posted an edited version of its culture document on Tuesday. In a statement, Alex Rapoport, a spokeswoman, said Kraken will not tolerate “inappropriate discussions.” She added that as the company 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 a Twitter thread on Wednesday, ahead of this article, Mr Powell said that “about 20 people” were not on board with Kraken’s culture and that while teams should have more input, he “had studied a lot more on policy topics”.
“People are triggered by everything and cannot follow the ground rules of a fair debate,” he wrote. “Back to the dictatorship.”
The conflict at Kraken shows how difficult it is to translate 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 book on the history of digital currencies in 2019. Many early proponents of Bitcoin favored freedom of ideas and disdained government interference; more recently, some have rejected identity politics and called for political correctness.
“A lot of the great whales and great reps of today — they’re trying to bury that history,” said Mr. Brunton. “The people who are left who actually stick to that feel more confused.”
Mr. Powell, a graduate of California State University, Sacramento, started an online store called Lewt in 2001, 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 Mount Gox, one of the first crypto exchanges, which helped the company solve a security problem. (Mt. Gox collapsed in 2014)
Mr. Powell later founded Kraken 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 skyrocketed in recent years, Kraken became the second largest crypto exchange in the United States after Coinbase, according to CoinMarketCap, an industry data tracker. Mr. Powell said last year that he planned to list the company.
He also insisted that some employees subscribe to Bitcoin’s philosophical underpinnings. “We have this ideological purity test,” said Mr. Powell on the company’s recruiting process on a 2018 crypto podcast, “A test of whether you’re somewhat aligned with Bitcoin and crypto’s vision.”
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 government ideal,” 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 ordered Glassdoor to transfer 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 reports reviewed by The Times. The group is labeled “…and you thought 4chan was full of trolls,” referring to the anonymous online message board known for its hate speech and radicalization of some gunmen behind mass shootings.
In April, a Kraken employee internally posted a video to another Slack group sparking the latest spat. The video featured two women saying they preferred $100 in cash over a Bitcoin, which cost more than $40,000 at the time. “But that’s how the female brain works,” the employee noted.
Mr Powell stepped in. He said the debate over women’s mental capabilities was unsettled. “Most American ladies have been brainwashed in modern times,” he added on Slack, in an exchange reviewed by The Times.
His comments caused a furore.
“To the person we look to for leadership and advocacy to joke that we are being brainwashed in this context or to expose this situation is hurtful,” wrote one female employee.
“It’s not encouraging to see your gender’s thoughts, abilities and preferences discussed in this way,” wrote another. “It’s incredibly different and harmful to women.”
“Being offended is not hurt,” replied Mr. Powell. “A discussion of science, biology, an attempt to establish facts of the world, cannot be harmful.”
At a company-wide meeting on June 1, Mr. Powell expanded Kraken’s global presence, with employees in 70 countries, when he moved on to the subject of preferred pronouns. It was time for Kraken to “master the language,” he said during the video call.
“It’s just not practical to allow 3,000 people to modify their pronouns,” he said.
That same day, he invited employees to join him on a Slack channel called “debate pronouns,” where he suggested that people use pronouns not based on their gender identity but their gender at birth, according to conversations conducted by The Times were seen. He shut down comments on the thread after it became controversial.
mr. Powell reopened the discussion about 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 said wasn’t a taint if used lovingly.
Mr Powell also distributed the culture document entitled ‘Kraken Culture Explained’.
“We do not prohibit insult,” read a section. Another said employees should “show tolerance for diverse thinking”; refrain from labeling comments as “toxic, hateful, racist, x-phobic, useless, etc.”; and “avoid censoring others.”
It also explained that the company had eschewed vaccine requirements in the name of “Krakenitic physical autonomy”. A section titled “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 posted publicly, mentions of Covid-19 vaccinations and the company’s belief in allowing people to arm themselves were omitted.
Those who disagreed with the document were encouraged to leave. At the June 1 meeting, Mr. Powell launched the “Jet Ski Program,” which the company called a “recommitment” to its core values. Anyone who felt uncomfortable had two weeks to leave, with four months’ wages.
“If you want to get out of Kraken,” read a memo about the program, “we want it to feel like you’re hopping on a jet ski and happily off to your next adventure!”
Kitty Bennett and Aimee Ortiz research contributed.
