Why Are So Many Crypto Execs Leaving?

A spate of high-profile resignations across the blockchain industry show the challenges of leading in such a chaotic industry.

AccessTimeIconOct 17, 2022 at 4:49 p.m. UTC
Updated Oct 17, 2022 at 5:09 p.m. UTC
AccessTimeIconOct 17, 2022 at 4:49 p.m. UTCUpdated Oct 17, 2022 at 5:09 p.m. UTCLayer 2
AccessTimeIconOct 17, 2022 at 4:49 p.m. UTCUpdated Oct 17, 2022 at 5:09 p.m. UTCLayer 2

Management shake-ups are hitting crypto in what some are calling crypto’s “great resignation.”

On Monday it was announced Gemini co-founder Cameron Winklevoss – twin of Tyler – is stepping back as a director of Gemini Europe. The news, announced in a U.K. regulatory filing, comes as the wholly owned Gemini subsidiary maps out its expansion into known tax haven Ireland.

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No formal reason was given for Winklevoss’ move, but it comes amid a wave of C-Suite shuffling across the digital asset industry. Growing regulatory challenges as well as a multi-month long market rout have led to a number of resignations.

Among the most notable departures or downsizings, for very different reasons, are Genesis CEO Michael Moro, MicroStrategy CEO Michael Saylor, Kraken CEO Jesse Powell, all announced in recent weeks. Alameda Research co-CEO Sam Trabucco also stepped down, as did FTX.US President Brett Harrison.

Then there’s Celsius’ Alex Mashinsky and Daniel Leon, who served as the now-bankrupt crypto neobank’s chief executive and chief strategy officer, respectively. The crypto lender is going through a difficult Chapter 11 restructuring, and it seems likely that Mashinsky could face lawsuits.

The reasons for these exoduses vary on a case by case basis. In many instances it seems like individual attempts to save face after making bad business decisions, or a result of pressure from a company’s board or owners.

Moro threw in the towel, for instance, after Genesis got in bed with the overzealous and potentially criminal hedge fund Three Arrows Capital, which apparently lost the institutional-facing lending firm Genesis a whopping $1.2 billion. Genesis, like CoinDesk, is owned by Digital Currency Group.

Michael Saylor, the long-time CEO of business intelligence company MicroStrategy, directed the firm’s first bitcoin purchase in 2020 and essentially transformed the firm into a BTC investment trust.

MicroStrategy’s BTC buys seemed prescient in 2020, ahead of the bull run – and was even said to catalyze other corporate entities into holding bitcoin “on the balance sheet” as a hedge against inflation – but are now deeply in the red. Saylor kept buying, even as the market turned against him, while most other publicly listed firms have not. He remains at MicroStrategy as executive chairman.

Kraken’s Powell founded the exchange in 2011 and has long been known as one of crypto’s most ideologically driven executives. This year, the libertarian-leaning former CEO was accused of fostering a toxic workplace culture after making offhand remarks and setting “anti-Woke” policies.

Powell, like Saylor, said he’s stepping down as CEO to continue focusing on crypto advocacy. In some cases, these shifts work out. David Marcus, who oversaw the Libra project at Facebook, before both were renamed, has emerged as a thoughtful industry commentator and CEO of Bitcoin Lightning-focused Lightspark.

Like the broader tech industry, several crypto firms have put hiring-freezes in place and started rounds of layoffs. Bear markets, where the goal is to merely survive as users and capital flood out, require an entirely different set of managerial skills than bull markets, where growth and market dominance seem to be all that matters.

The tricky thing with crypto, however, is that management can be hard to hire. Many companies, particularly Coinbase, have relied on hiring from within due to the complexities of the industry. Decent managers need to have an understanding of crypto’s technicalities as well as the gumption to lead in such a volatile market.

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Daniel Kuhn

Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.