Kraken’s Jesse Powell joins ‘crypto’ CEO Skedaddle

Jesse Powell, the controversial co-founder of digital asset exchange Kraken, is the latest “crypto” CEO to relinquish the reins of power as market reservoirs and authorities investigate financial wrongdoing.

On Wednesday, Kraken announced a ‘management succession plan’ which will see Powell stepping down as CEO to make way for David Ripley, the company’s chief operating officer for the past six years. Ripley will assume the role of CEO once a replacement COO has been identified, a process that is expected to take a few months.

Powell expressed his “great confidence” in Ripley’s ability “to lead Kraken into its next era of growth”. Ripley backtracked, stating that “my vision, along with the rest of the leadership team, aligns with Jesse’s – to accelerate cryptocurrency adoption.”

Kraken quoted Powell as saying he was looking forward to spending more time undermining the authority of governments around the world to fulfill his lifelong anarchic fantasies, uh, sorry, just “spend more time on the products of enterprise, user experience and broader industry advocacy.

Again, Powell (seriously) tweeted that he might consider filling his free time by running for Governor of California, perhaps because he was previously suggested governors should be paid the same as CEOs of Amazon or Google. Perhaps also because Powell tweeted in May that he had “spent half of my available capital to buy BTC at $30,000 in July [2021]”, then, you know, public pacifier suckling suddenly seems much more appealing.

Fittingly, Powell’s resignation was announced the day the value of the BTC token fell below $18,300, barely higher than the previous 2022 low in June. The broader crypto market was hit hard on Wednesday after the US Federal Reserve…a longtime enemy of Powell (and currently led by another J. Powell) – raised interest rates to 3.25%. But remember kids, BTC is freedom money, even though its value can be periodically decimated by the whims of central bankers.

BTC maxis just wanna have fun

Powell was more candid about his reasons for coming out in an interview with Bloomberg, saying that as Kraken’s payroll reached some 3,300 bodies, “it just got more exhausting for me, less fun.” Especially when some of those employees don’t share a desire to be offended by the so-called Kraken culture on a daily basis.

To call Powell’s views controversial is a serious understatement, at least for anyone who hasn’t drunk the Kraken Kool-Aid. Powell seems to have decided to surround himself with freethinkers, as everyone at Kraken is free to think exactly like Powell. Those who don’t are free to think about leaving.

Powell claimed that he privately informed Kraken’s board of directors of his intention to step down as CEO more than a year ago, around the time he was considering publicly taking Kraken public in 2022. But then the market fell and Coinbase’s share price traded. stocked up on it, wiping out around three-quarters of its market capitalization.

Powell told Bloomberg that an initial public offering was still possible, but gave no details as to when these glorious founders’ payday might arrive. Kraken’s delay in following Coinbase on the Nasdaq likely suppressed some of the surging bloom, as Kraken lost significant market share to rivals during this period.

Powell’s exit from a day-to-day operational role in Kraken may also be intended to allay concerns among institutional investors about the divisive attitudes toward regulators, city officials and other authorities that regularly emerge from Powell’s Twitter feed. Then again, the fact that Ripley said her “vision” was identical to Powell’s might not do much to allay those concerns.

Last out of the pool has to kiss Craig

Powell is the latest in a growing line of CEOs who have headed for the hills this crypto winter. Jack Dorsey quit Twitter last November and quit its board in May – despite/because of the social media platform’s egregious security issues – to focus on its BTC-focused payment processor, Block (formerly Square). Not that it helped. Last month, Block was hit by a class action after a former employee was able to steal the data of 8.2 million users after leaving the company.

Block is currently trading around $56, around a fifth of its value just a year ago. This week, the investment bank Mizuho Block’s rating was downgradedciting “user fatigue” and the fact that BTC’s daily struggles “seem to disproportionately preoccupy management’s attention.”

More recently, Sam Trabucco, co-CEO of market maker FTX Alameda Research, announced his resignation in August, saying he wanted to spend more time relaxing on his new boat. Caroline Ellison, Alameda’s other co-CEO, now steers the ship that Trabucco abandoned on her own.

Trabucco’s sail into the sunset came as the spotlight intensified on Alameda’s oversized role in the ongoing Tether scandal. Alameda is the largest recipient of the allegedly unbacked USDT stablecoin (which is tied to artificial BTC inflation), and Alameda sent 82% of that $36.7 billion to FTX.

(Speaking of FTX, the supposedly hugely profitable exchange is again looking to raise another billion dollars venture capital funds rather than dip into its own reserves, almost as if those profits were vastly overstated and its reserves non-existent. But we digress…)

Michael Moro, CEO of Digital Currency Group-owned Genesis Global Trading, fled the crypto scene in August after making $2.36 billion in ill-advised loans to Three Arrows Capital, the hedge fund whose collapse this been helped fuel a hell of affiliate insolvencies.

Moro’s CEO seat is held on an interim basis by COO Derar Islim while the search for a permanent successor continues. Genesis stated the obvious by saying future hires would focus on “strengthening the company’s overall risk management.”

Finally, MicroStrategy’s Michael Saylor stepped down as CEO in August after his company posted a net loss of over $1 billion due to Saylor’s big bad bet on indefinite BTC growth. Like Powell, Saylor opted to stay on as chairman while touting plans to engage in BTC-related “advocacy initiatives.”

Just days after Saylor resigned, he was sued for tax evasion by the District of Columbia Attorney General’s Office. Presumably, Saylor figured out the legal ax was about to drop before pulling the plug.

Do you sense a pattern here? Ineptitude? Mismanagement? Crime? Continue reading…

Like Saylor, Powell has recently found himself in the crosshairs of the government. In July, the New York Times reported that the US Treasury Department’s Office of Foreign Assets Control (OFAC) is investigating Kraken for allegedly allowing clients in Iran to trade on the exchange and thereby evade US economic sanctions.

In 2021, the US Commodity Futures Trading Commission (CFTC) fined Kraken $1.25 million for offering unlicensed illegal margin digital currency products. In the same year, UK bank TSB publicly denounced Kraken for not doing enough to protect consumers from fraud, prompting furious denials from Kraken’s management, who clearly failed to see the Powell’s tweets about how he personally engaged in money laundering tactics when US financial institutions temporarily froze Kraken’s accounts.

Nozzles of a feather

News of Powell’s resignation drew praise on Twitter from several of his peers, including the Binance boss Changpeng ‘CZ’ ZhaoCoinbase CEO Brian Armstrong and Shapeshift’s Erik Voorhees. Binance and Shapeshift were among the exchanges that agreed to delist Bitcoin SV (BSV) in 2019 after Dr. Craig Wright decided he had received enough libelous insults from BTC maximalist Magnus” Hodlonaut” Granath.

Powell’s decision to follow Binance’s lead in delisting BSV reportedly came after a Twitter poll, but the exchange unfairly labeled BSV as “an extremely risky investment” when it initially listed the token. Powell’s hypocrisy was on full display in June when Kraken decided to list the new token that emerged from Terra’s collapse this spring. After briefly surging to $10, the new token quickly lost 75% of its value. But you know, everyone has a different definition of “risky”.

Kraken, Binance and Shapeshift were among exchanges named in a £9.9bn class action lawsuit filed in the UK last month that seeks justice on behalf of the approximately 240,000 BSV investors who have suffered financial loss due to collective radiation.

Kraken and Coinbase are also the subject of another lawsuit filed in May in the English High Court which accuses the exchanges of “passing off” the BTC token as Bitcoin despite BTC’s code having undergone changes that eliminate any resemblance to it. the bitcoin described in Satoshi Nakamoto’s 2008 white paper.

Powell is Kraken’s largest shareholder, so any financial judgments against the exchange will undoubtedly hurt his portfolio. But it could prove a key deterrent to would-be investors deciding whether Kraken — with or without Powell behind the wheel — is worth the risk.

Follow CoinGeek’s Crypto Crime Cartel series, which dives into the stream of groups from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether, which co-opted the digital asset revolution and turned the industry into a minefield for naive (and even experienced) market players.

New to Bitcoin? Discover CoinGeek bitcoin for beginners section, the ultimate resource guide to learn more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.

Comments are closed.