Digital asset exchange Kraken has announced it is replacing chief executive officer and co-founder Jesse Powell with current chief operating officer Dave Ripley. Powell’s resignation comes as he recently described working at Kraken as “draining” and “less fun” as the company has grown. He remains Kraken’s largest shareholder and will remain chairman of its board of directors.
Ripley will step into the CEO position once Kraken has found a replacement COO. He has worked at the company since 2016. The company said it interviewed over a dozen other candidates for the job.
Powell promised to use his newfound freedom, “spending more time on stuff which I’m good at and enjoy doing, like working on product and industry advocacy stuff.”
Powell was a Bitcoin early adopter and launched Kraken in 2011. That’s a pretty strong inning for a digital asset exchange CEO, and Powell maintained much of his anarchist image as the culture shifted around him.
That changing culture may be part of the reason for Powell’s departure. In a series of posts, he had recently criticized Western “woke activism” at his company and others, saying most employees didn’t care about such things and were growing tired of being dragged into “debates and therapy sessions” instead of being productive.
The Western corporate world and its investors have also shown a recent lack of tolerance for CEOs they find politically problematic. Libertarian-leaning leaders like Powell and Twitter’s Jack Dorsey have recently announced their resignations, leaving their positions free for more investor-presentable faces to step in. Powell’s airing of opinions led to a critical New York Times feature, which may have helped seal his fate.
Ripley has said his own culture and values “are in lockstep” with Powell’s but acknowledged his social media profile wasn’t as prominent. He said he doesn’t expect the company’s culture to change all that much.
Kraken has also faced challenges with another changing business culture—digital asset businesses are becoming just as regulated as the financial world they sought to replace. In 2021, the company received a $1.25-million penalty from the Commodity Futures Trading Commission (CFTC) for offering illegal margined trading products to unqualified investors. The New York Times also reported that Kraken had been under investigation by the United States Treasury Department’s Office of Foreign Assets Control (OFAC) following suspicions that it had offered trading services to customers in Iran, violating U.S. sanctions.
In April 2022, Kraken announced it would move its headquarters out of San Francisco, following Powell’s reported complaints about crime in the city threatening his employees’ safety.
Kraken also appeared to abandon a plan to go public in 2021 when it failed to submit an application to the U.S. Securities and Exchange Commission (SEC). However, some investors remain hopeful this will still happen in the future.
For all the talk of free and open markets in the blockchain world, Kraken has shown its principles only applied in selected cases. Together with Binance, the company led the 2019 “Delist BSV” campaign, purportedly after taking moral offense to nChain chief scientist and Bitcoin creator Dr. Craig S. Wright’s lawsuits against others in the digital asset industry. Both exchanges, along with fellow traveler ShapeShift and others, delisted BSV from their platforms shortly after.
This has resulted in a £9.9 billion class action lawsuit brought in the Competition Appeal Tribunal in the U.K. by BSV Claims Limited, an entity formed solely for the purpose of bringing the collective proceedings order (CPO); the director of that company (and the practical class representative) is Lord David Currie of Marylebone, who was the inaugural Chair of the Competition and Markets Authority.
Kraken, along with Binance, has continued to list controversial “stablecoin” Tether (USDT), which has faced allegations for years that it mints unbacked USD tokens, using them to inflate the prices of BTC and other digital assets.
Whether Powell’s departure from Kraken is simply another case of executive burn-out or investors’ desire for a less controversial leader (or both) remains unclear. The company’s moves in the coming year could be a clearer indication.
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