Inside The Employee Revolt At Coinbase

An employee revolt is underway at Coinbase and leadership positions within the company are at stake. And worse... There are questions about the security of the crypto assets at the largest American cryptocurrency exchange.

On Thursday, an anonymous group of employees at Coinbase challenged their leadership in what they are calling a "no-confidence vote." They are singling out three C-suite executives for mismanagement: COO Emilie Choi, Chief Product Officer Surojit Chatterjee, and Chief People Officer LJ Brock. 

The revolting employees lodged a laundry list of complaints against the executives, mostly regarding lack of product focus and bad company morale. However, one criticism that stood out was the recent news that Coinbase rescinded several job offers in a sort of retroactive hiring freeze:

"6. Rescinding offers to new employees despite promising them that their offers would not be rescinded two weeks earlier, leading to a massive negative reception from the public and the industry at-large"

It's currently unknown how many employees are involved with this letter, or if the letter is gaining traction among other employees. As of right now, it seems unlikely that any leadership changes will take place.  Coinbase CEO Brian Armstrong took to Twitter to respond in a lengthy thread on Friday:

The anonymous employees also listed several consequences of the bad management, writing, "Their actions have hurt multiple parties." The bullet that most interested me was the last one:

"4. The company’s reputation to the public, where people are less likely to view Coinbase as a trustworthy and reliable crypto exchange to do business with"

Trustworthiness among the public is becoming more important, as the public becomes more aware of the risks of losing their coins. Cryptocurrency exchanges have always been a liability for customers who keep their coins on exchanges. Coinbase in particular alarmed its customers earlier this year, telling regulators, "The crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings." In other words, if Coinbase's bad investments (such as those their employees are complaining about) are fatal to the company, customers could lose all of their money. 

At the Crypto Christian, we hold to the Bitcoiner mantra of "Not your keys, not your coins." In other words, if you allow the companies you buy bitcoin from to hold the private keys of your wallet, then you are subject to third-party risks outside of your control, such as potentially losing all of your bitcoin. If you keep bitcoin on an exchange like Coinbase, you do not control your private keys. Although it can be scary to self-custody your private keys, we believe this is not only the best practice, but the only recommended practice.

Fortunately, there are a number of new companies emerging which can help guide you through this process. Tim and Patrick both use Unchained Capital's concierge onboarding. There are other options as well, such as Casa. Wherever you are in your crypto journey, we started Crypto Christian to help people like you, so if you have a question, please reach out to us!