Jesse Powell, the controversial co-founder of the Kraken digital asset exchange, is the latest ‘crypto’ CEO to surrender the reins of power as the market tanks and authorities probe financial wrongdoing.

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

Powell expressed “great confidence” in Ripley’s ability “to lead Kraken through its next era of growth.” Ripley logrolled back, saying “my vision, along with the rest of the leadership team, is in lockstep with Jesse’s – to accelerate the adoption of cryptocurrency.”

Kraken quoted Powell saying he was looking forward to spending more time undermining the authority of governments everywhere to fulfill his lifelong anarchic fantasies, er, sorry, make that “spending more of my time on the company’s products, user experience and broader industry advocacy.”

Then again, Powell (seriously) tweeted that he might consider filling his free time by running for Governor of California, possibly because he’s previously suggested governors should be paid the same as CEOs of Amazon or Google. Also possibly because Powell tweeted in May that he’d “spent half my available capital to buy BTC at $30k in July [2021],” so, you know, suckling the public teat is suddenly looking a lot more appealing.

Fittingly, Powell’s resignation was announced the day that the value of the BTC token tumbled below $18,300, only slightly higher than 2022’s previous low in June. The broader crypto market was hit hard Wednesday after the U.S. Federal Reserve—a longtime nemesis of Powell’s (and currently led by a different J. Powell)—hiked interest rates to 3.25%. But remember kids, BTC is freedom money, even if its value can be periodically decimated by the whims of central bankers.

BTC maxis just wanna have fun

Powell was more candid about the reasons for his exit in an interview with Bloomberg, saying that as Kraken’s payroll grew to some 3,300 bodies, “it’s just gotten to be more draining on me, less fun.” Particularly when some of those employees don’t share the desire to be offended daily by the so-called Kraken Culture.

To label Powell’s views as controversial is a serious understatement, at least, for anyone who hasn’t quaffed the Kraken Kool-Aid. Powell seems to have set out to surround himself with freethinkers, in that everyone at Kraken is free to think exactly as Powell does. Those that don’t are free to think about leaving.

Powell claimed that he’d privately informed Kraken’s board of directors of his intention to step down as CEO over a year ago, around the time he was publicly musing about taking Kraken public in 2022. But then the market tanked and rival exchange Coinbase’s share price tanked along with it, erasing around three-quarters of its market cap.

Powell told Bloomberg that an initial public offering was still possible but offered no specifics as to when that glorious founders’ payday might arrive. Kraken’s delay in following Coinbase onto the Nasdaq has likely taken some of the bloom off that rose, as Kraken has lost significant market share to its rivals over that span.

Powell’s exit from a day-to-day operational role in Kraken may also be intended to soothe institutional investors’ concerns about the confrontational attitudes toward regulators, civic officials and other authorities that routinely emerge from Powell’s Twitter feed. Then again, the fact that Ripley has declared his ‘vision’ to be identical to Powell’s might not do much to alleviate those concerns.

Last one out of the pool has to kiss Craig

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

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

More recently, Sam Trabucco, co-CEO of FTX market-maker Alameda Research, announced his resignation in August, claiming to want to spend more time relaxing on his new boat. Caroline Ellison, Alameda’s other co-CEO, is now solo-steering the ship Trabucco abandoned.

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

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

Michael Moro, CEO of the 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 summer helped fuel an inferno of affiliated insolvencies.

Moro’s CEO seat is being held on an interim basis by COO Derar Islim while the search for a permanent successor proceeds. Genesis stated the obvious by declaring that 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 BTC’s number going up forever. Like Powell, Saylor opted to stay on as chairman while touting plans to engage in BTC-related “advocacy initiatives.”

Only a few days after Saylor’s resignation, he was sued for tax fraud by the District of Columbia Attorney General’s office. Presumably, Saylor understood the legal axe was about to fall before he pulled the plug.

Do you sense a pattern here? Ineptitude? Mismanagement? Criminality? Read on…

Like Saylor, Powell has of late found himself in the government’s crosshairs. In July, the New York Times reported that the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) was probing Kraken for allegedly allowing customers in Iran to trade on the exchange and thus evade U.S. economic sanctions.

In 2021, the U.S. Commodity Futures Trading Commission (CFTC) fined Kraken $1.25 million for offering illegal margined digital currency products without a license. That same year, the U.K.’s TSB Bank publicly called out Kraken for not doing enough to protect consumers from fraud, prompting angry denials from Kraken management, who clearly didn’t see Powell’s tweets about how he personally engaged in money laundering tactics when U.S. financial institutions temporarily froze Kraken’s accounts.

Buzzards of a feather

Powell’s resignation announcement prompted Twitter plaudits from many of his peers, including Binance boss Changpeng ‘CZ’ Zhao, Coinbase CEO Brian Armstrong and Shapeshift’s Erik Voorhees. Binance and Shapeshift were among the exchanges that colluded in the 2019 delisting of Bitcoin SV (BSV) after Dr. Craig Wright decided he’d taken enough defamatory insults from BTC maximalist Magnus ‘Hodlonaut’ Granath.

Powell’s decision to follow Binance’s lead in delisting BSV purportedly came after a Twitter poll but the exchange had unfairly tagged BSV as “an extremely risky investment” when it originally listed the token. Powell’s hypocrisy was on full display this June when Kraken decided to list the new token that emerged from this spring’s collapse of Terra. After briefly soaring 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 the exchanges named in a £9.9 billion class action lawsuit filed in the U.K. last month that seeks justice on behalf of the estimated 240,000 BSV investors who suffered financial losses due to the collective delisting.

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

Powell is Kraken’s single largest shareholder so any financial judgment against the exchange will undoubtedly hurt his pocketbook. But it could prove a critical deterrent for prospective investors deciding whether Kraken – with or without Powell at the wheel – is worth the risk.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,


Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

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