Media Criticism

What The New York Times Didn't Say About Crypto Firm Kraken's Culture War

An explosive Times report alleged that Kraken CEO Jesse Powell created a "hateful workplace," leading to an employee exodus. Is that what really happened?

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Kraken vs. the New York Times | Illustration: Lex Villena; Deanpictures, Alexander Konoplyov
(Illustration: Lex Villena; Deanpictures, Alexander Konoplyov)

The New York Times published a 1,700-word article Wednesday alleging that the cryptocurrency exchange Kraken had been roiled by an internal culture war, whipped up by CEO Jesse Powell and his penchant for inflammatory speech.

Via Slack, the article said, Powell "challenged the use of preferred pronouns, debated who can use racial slurs and called American women 'brainwashed.'"

"He also questioned [employees'] use of preferred pronouns and led a discussion about 'who can refer to another person as the N word,'" wrote reporters Ryan Mac and David Yaffe-Bellany. They alleged that Powell "told workers that questions about women's intelligence and risk appetite compared with men's were 'not as settled as one might have initially thought'" and that such comments led employees to accuse Powell of cultivating a "hateful workplace."

A workplace so hateful, in fact, that "dozens are considering quitting, said the employees, who did not want to speak publicly for fear of retaliation."

Powell had tweeted a different account of the turmoil at his company (briefly noted 14 paragraphs down in the Times piece):

"As of the time that I made my tweet, it was literally 20 people" who had resigned, stating disagreement with culture or mission or culture document, Powell tells Reason. "That number is now 31," he says, out of a 3,000-person company. He adds that 21 of those people have been at Kraken for six months or less. Most people stick around for years, he adds, but there's also some natural employee churn each month.

Part of the reason for the exodus—if you want to call it that—may be that Powell is offering employees buyouts of four months' severance; for the 21 employees who've been working at the company for less than six months, an extra four months of guaranteed pay to leave may in fact be an attractive deal.

For The New York Times, this small group at Kraken is symptomatic of a larger problem in the crypto space. "Rarely has such angst been actively stoked by the top boss," write Mac and Yaffe-Bellany. "And even in the male-dominated cryptocurrency industry, which is known for a libertarian philosophy that promotes freewheeling speech, Mr. Powell has taken that ethos to an extreme."

The conflict at Kraken shows the difficulty of translating crypto's political ideologies to a modern workplace, said Finn Brunton, a technology studies professor at the University of California, Davis, who wrote a book in 2019 about the history of digital currencies. Many early Bitcoin proponents championed freedom of ideas and disdained government intrusion; more recently, some have rejected identity politics and calls for political correctness.

Individualism is baked into the crypto ethos. Cryptocurrency and the blockchain technology undergirding it, properly understood, aren't particularly valuable as get-rich-quick schemes (especially this week). Crypto is supposed to be a means of storing your wealth away from the prying eyes and hands of the government, and the blockchain is a way of validating contracts via a distributed digital ledger instead of relying on intermediaries. Crypto's value proposition is that it transcends borders and hides from governments, restoring power and privacy to the individual; many people in the developing world already see this, relying on crypto to send remittances or to store wealth when their own currency isn't so stable. But the mainstream media rarely stress crypto's potential for people who aren't rich, white tech bros, and this New York Times piece is no exception.

"I would've done some things differently in hindsight," admits Powell. "We created isolated channels for these debates," with a warning for people not to get upset if they came into the conversations and found themselves uncomfortable. "I think that almost had the effect of attracting people who were gonna be triggered by the content of the channel. People just couldn't help themselves from joining the channel and getting super riled up and offended."

The debates were on things like whether preferred pronoun use should be mandated at the company. Powell clarified elsewhere that "nobody is prohibited from putting their desired pronouns in their workplace bio. Anybody can request any communication preferences they want….It's about what we mandate." It was in this context, Powell says, that he brought up racial slurs—whether anyone can identify as anything they want and thus use in-group terms seen as broadly offensive when used by outsiders.

But "maybe there's just no point in having this debate," Powell says. "What started as an open invitation for people to share their views about company policy and marketing….I thought, oh it would be great to just hear what people think about this." He has now adopted a different policy: If you're an employee who disagrees with company policy, you can submit a written proposal to management, privately suggesting a change.

The New York Times also described an April incident in which a Kraken worker posted a video in Slack that "featured two women who said they preferred $100 in cash over a Bitcoin, which at the time cost more than $40,000. 'But this is how female brain works,' the employee commented."

"Mr. Powell chimed in. He said the debate over women's mental abilities was unsettled. "Most American ladies have been brainwashed in modern times," he added on Slack, in an exchange viewed by The Times.
His comments fueled a furor.
"For the person we look to for leadership and advocacy to joke about us being brainwashed in this context or make light of this situation is hurtful," wrote one female employee.

"I think everyone in the world is brainwashed," Powell says, who also said as much on Slack. (He provided copies of the messages to Reason.) "I was making a joke…about what women find physically attractive." Specifically, "I was joking about [personally] looking like a pirate, saying that I think looking like a pirate is super cool…but that American women have been 'brainwashed' in recent times to think that that's not cool."

The part about women's intelligence, he says, was in the context of people discussing how much gender differences were rooted in nature and how much they were rooted in nurture. "I didn't see anyone say [over the course of 1,000 messages being sent] that women were less intelligent than men; the debate was just whether there are differences."

Last year, the software company Basecamp came under fire for its ban on talking politics at work, after politics had become "a major distraction," according to co-founder Jason Fried; one-third of the company (60 people) accepted buyouts to depart. In September 2020, the cryptocurrency exchange Coinbase offered employees buyouts of four to six months' severance if they weren't there to advance global economic freedom. "We could use our work day debating what to do about various unrelated challenges in the world, but that would not be in service of the company or our own interests as employees and shareholders," wrote CEO Brian Armstrong at the time.

Whatever one thinks of his specific comments, Powell probably should have more thoroughly considered the prudence of creating Slack channels for policy debate. He has also, in the past, come under fire for attempting to get Glassdoor to reveal the identity of anonymous commenters who had left negative reviews of the company and allegedly revealed information in breach of confidentiality agreements, an effort that could strike some libertarians as inconsistent. ("I have no speech hang ups with voluntary contract enforcement," he says.)

Is Powell guilty of cultivating a "hateful workplace"? The New York Times seems to think so, but the evidence is weak.