Crypto CXOs step down as market downturn extends – TechCircle



23 Sep, 2022

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The crypto downturn since April this year has wiped out about $2 trillion in value from the crypto industry, a meteoric fall from the $2.9 trillion peak in November 2021. As the rout in digital currencies deepens, crypto companies have been laying-off hundreds and thousands of their employees. But the so-called crypto winter is now hitting the top brass too. In recent months, the industry has seen several high-profile exits. 

Here are the five big names in the crypto market who have stepped down in the last one month from the leadership position, leaving a greater void — and apprehension — among crypto investors.  

Robert Bogucki moves out of Galaxy Digital  

Photo Credit: LinkedIn

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New York-based digital asset and blockchain company Galaxy Digital’s co-head of trading Robert Bogucki has, today, reportedly left the firm to join investment firm Brevan Howard’s crypto arm BH Digital, according to a report from Axios.    

Bogucki joined Galaxy Digital in 2021 and worked alongside Jason Urban as co-head of trading. He previously worked in managing director roles at several banks, such as Barclays, Merill Lynch and Lehman Brothers, according to LinkedIn.   

He is not the only executive quitting Galaxy Digital. Michael Jordan, the firm’s co-head of investments, is set to exit the firm to launch a new crypto fund called DBA Crypto.   

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Galaxy Digital reported a $554.7 million net loss for the second quarter; roughly triple its losses for the same stretch in 2021, reported Business Insider. It also reported preliminary assets under management of almost $1.7 billion for the end of the second quarter, a 40% decrease compared to the first quarter.   

In August 17, Crypto broker Genesis Trading announced that the firm’s CEO Michael Moro would step down from his role. The firm has also cut 20% of its 260-person workforce to reduce costs, reported Bloomberg.  

Jesse Powell, CEO Kraken steps down 

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Kraken cofounder and chief executive Jesse Powell said that he is stepping down in September 20. Powell, an pioneer of digital currencies, started Kraken as a bitcoin exchange in 2011. Kraken is currently the fourth-largest crypto exchange, after Binance, FTX and Coinbase, according to CoinMarketCap. While the company managed to weather the storm like some of its major crypto peers, Powell found himself in the hot seat over allegations that he made insensitive comments on gender and race that sparked heated conversations within the company. The New York Times reported about the company’s internal strife and toxic-male tech culture.   

Powell thereafter took to Twitter justifying, “When things were rosy, everybody got along,” post that’s now being widely discussed. “When things started to look grim, sensitivities and the misalignment came through. People focused on minor slights, first world problems rather than our really big, important mission to help billions of people.”   

These conversations sparked a lot of debate in the business community and the CEO also acknowledged, “I honestly don’t consider myself to be an amazing manager.”   

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As of now, he’s remaining as board chair and will focus on Kraken’s product development and on advocacy related to crypto regulations. However, what needs attention is that Powell is giving up the CEO post at a critical time when the crypto industry is still reeling from a major downturn that wiped out about $2 trillion in value.   

Steve Cohen stops investing in Radkl 

Photo Credit: Twitter

On August 2, it was reported that Steve Cohen, hedge fund billionaire and owner of American multi-strategy hedge fund Point72 Asset Management, abandoned his investment in crypto trading firm Radkl. He reportedly “lost confidence in Radkl, and has therefore rescinded his investment in the crypto startup,” stated Bloomberg, adding that the one-year-old Radkl has lost two managing directors this year, including Jim Greco, who quit in January this year to become a General Partner at F9 Research, and Beatrice O’Carroll, who also quit recently. The team listed on Radkl’s website has now shrunk to four members.    

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In September 2021, Radkl made big headlines when it received support from Cohen. According to statements made at the time, Cohen intended to “make investments in the crypto world through various avenues” without getting involved in the day-to-day operations of the start-up itself. Nonetheless, Radkl, was known popularly as a “Cohen-backed crypto venture,” that gained significant media attention for breaking ground with its “sophisticated, high-speed, computerised trading models” for investing in cryptocurrencies, digital assets and decentralised finance. However, after losing Cohen, Radkl potentially finds itself in a tough position, according to report by Crunchbase, a popular platform listing the business information of both public and private companies, who said, “Radkl has lost its sole investor”.   

Michael Moro exits from Genesis Trading  

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On August 17, Crypto broker Genesis Trading announced that the firm’s CEO Michael Moro would step down from his role. The firm has also cut 20% of its 260-person workforce to reduce costs, reported Bloomberg.  

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Moro, who led the Crypto brokerage arm of Digital Currency Group (DCG) for about seven years, may have fallen out of favour with the company following losses incurred from the Three Arrows Capital (3AC) exposure. Genesis trading was badly hit following 3AC’s collapse. 3AC owed the trading firm about $2.36 billion, which it failed to repay even after its margin call was due. To cut the losses, Moro said the trading firm had to liquidate 3AC’s collateral, though it failed to cover the loan amount. As a result, the parent company DCG had to assume certain liabilities to ensure the continued operation of the firm.   

The financial burden that the 3AC incurred on DCG and recent weak financial reports could be pointers to why the company has decided to try a new breed of executives.   

The leadership reshuffle also saw Genesis hire several key executives, who, as the company hopes, will “further strengthen its governance and position the firm for the future.”   

The firm, however, admitted that “it was not immune to the market drop and the damage to overall sentiment.    

Michael Saylor Quits CEO Role  

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Another big shakeup in the crypto industry was Michael Saylor, co-founder and CEO of MicroStrategy, who stepped down from his CEO role last month. MicroStrategy that provides business intelligence, mobile software, and cloud-based services also invests in Bitcoin.   

However, MicroStrategy’s total revenues fell 2.6% year-over-year to $122.07 million and missed the analyst estimates of $123.25 million, as per its Q2 results. The huge loss was mainly due to the digital asset impairment charges.   

Phong Le, President of the company, will take over the role of CEO and also join the Board of Directors. Saylor believes that splitting the CEO and Chairman roles will improve MSTR’s two major corporate strategies, which are bitcoin acquisition and growing its enterprise analytics software business. As Saylor noted, “As global adoption of digital assets accelerates, this is becoming an ever more expansive job, and I’m comforted increasing the scope of my advocacy efforts knowing that the execution of the MicroStrategy business plan rests in the capable hands of Phong, Andrew and the rest of our executive team.”