Distributed Ledger: Crypto CEOs are leaving their jobs. Here’s why

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Crypto in a snap

Bitcoin
BTCUSD,
-0.71%
went down about 5.6% over the past seven days, and was trading at around $19,159 on Thursday, according to CoinDesk data. Ether
ETHUSD,
-1.16%
lost 18% over the seven-day stretch to around $1,306. Meme token Dogecoin
DOGEUSD,
-1.18%
tanked 2.8% while another dog-themed token, Shiba Inu
SHIBUSD,
-1.60,
traded 8% lower from seven days ago.

Crypto Metrics

Exodus of crypto CEOs

The crypto sector has seen an exodus of chief executives from major companies, as the slump in valuations this year hook the industry.

Early August, Michael Saylor dropped the CEO title at MicroStrategy and took on a new role as executive chairman. In the same month, Michael Moro left the chief executive position at crypto lender Genesis, after its parent company Digital Currency Group filed a $1.2 billion claim against bankrupt digital asset hedge fund Three Arrows. Meanwhile, Sam Trabucco quitted his role as the co-CEO at Alameda Research, crypto billionaire Sam Bankman-Fried’s hedge fund. 

Earlier this month, Jesse Powell, co-founder of crypto exchange Kraken, stepped down as the company’s chief executive. 

On Tuesday, Alex Mashinsky, chief executive at crypto lender Celsius, resigned from his post, amid the bankruptcy proceedings of the company. On the same day, Brett Harrison, president of FTX US, said he is leaving the role. 

Reasons behind the moves may vary, with each company in a different position during the market downturn. Bankman-Fried’s FTX and Alameda have been aggressively acquiring several distressed crypto companies and assets, while some others, such as Celsius, filed for bankruptcy. 

Still, a shakeout of C-suites at such a scale reflected changes in the overall crypto industry. 

First comes the market conditions. For C-suite members who took the reins one or two years ago, when digital assets were on a bull run, they now face different challenges, as bitcoin lost almost 60% of its value year-to-date.

“Obviously in the downturn things become a bit trickier. You need a different type of management mindset, to weather the storm and a variety of crypto companies are going through the experience in a massively different way,” noted Farrokhnia.

Meanwhile, the crypto industry, born in 2009, has become more developed, with increasing institutional adoption and also regulatory attention. “That requires a different level of professionalism and maturity in senior leadership,” noted Farrokhnia. Some early adopters of crypto, who hold strong, libertarian values, may have found their views clash with new comers.

Furthermore, complexity of the crypto space added to the difficulty of finding new leaders outside of the industry. It explained why, in most cases, successors are insiders of the companies, Farrokhnia said.

The Ethereum ‘vanity address’ hack

Roughly $950,000 in crypto was stolen on Sept. 25 in an attack using a vanity-address generator called Profanity, according to a blockchain security firm PeckShield.

A “vanity address” is a personalized cryptocurrency address created by the users. As such addresses are human-generated, instead of being a random string of letters and numbers created by a machine, they are more vulnerable to brute force attacks.

The hackers took a total of 732 ether on Sep. 25 before moving the funds to the U.S. government sanctioned crypto mixer Tornado Cash, according to a tweet from blockchain security company PeckShield.

The attack resembles a recent $160 million attack on Wintermute, a major crypto market maker.

MarketWatch’s Anushree Dave wrote more about it here.

Crypto companies, funds

Shares of Coinbase Global Inc.
COIN,
-7.98%
plunged 9% to $61.27 on Thursday, and were down 2.7% over the past five trading sessions. Michael Saylor’s MicroStrategy Inc.
MSTR,
-3.92%
shares dropped 4.8% Thursday to $209.90, while they are up 9% over the past five days.

Mining company Riot Blockchain Inc.
RIOT,
-3.41%
shares declined 4.3% to $7.03 Thursday, and they were up 10.8% over the past five days. Shares of Marathon Digital Holdings Inc.
MARA,
-1.64%
dipped 2.5% to $10.68, while up 1.2% over the past five days. Another miner, Ebang International Holdings Inc.
EBON,
+3.76%
saw shares up 0.8% to $0.40 on Thursday, while down 0.4% over the past five days.

Overstock.com Inc.
OSTK,
-2.15%’s
shares slipped 2% to $24.54. The shares traded 2.9% higher over the five-session period.

Shares of Block Inc.
SQ,
-5.37%,
formerly known as Square, declined 5.5% to $55.85 and were down 0.2% for the week. Tesla Inc.
TSLA,
-6.81%
shares decreased 6.7% to $268.59, down 6.9% over the past five days.

PayPal Holdings Inc.
PYPL,
-2.66%
eased 2.8% to $88.55, with a 0.9% gain over the five-session stretch. Nvidia Corp.
NVDA,
-4.05%
shares tumbled 4.5% to $121.65, looking at a 3.1% loss for the past week.

Advanced Micro Devices Inc.
AMD,
-6.17%
shares tanked 6.5% to $63.77 on Thursday, down 8% from five trading days ago.

Among crypto funds, ProShares Bitcoin Strategy ETF
BITO,
-0.75%
lost 0.5% to $11.99 Thursday, while its Short Bitcoin Strategy ETF
BITI,
+1.02%
added 0.8% to $38.34. Valkyrie Bitcoin Strategy ETF
BTF,
-0.72%
traded 1.1% lower to $7.44, while VanEck Bitcoin Strategy ETF
XBTF,
-0.69%
cut 1.4% to $18.82.

Grayscale Bitcoin Trust
GBTC,
-3.00%
retreated 2.3% to $11.42.

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