NEW YORK - The cryptocurrency industry's epic shake-out, having cost thousands of jobs and set off a round of consolidation, is reaching the corner office.
Crypto exchange Kraken announced on Wednesday that co-founder Jesse Powell will step down as chief executive officer, to be replaced by chief operating officer David Ripley. The reshuffle comes shortly after Genesis' Michael Moro and Bitcoin evangelist Michael Saylor, along with Alameda Research's Sam Trabucco, relinquished top positions.
The raft of successions sets the stage for a changing of the guard in the roughly decade-old industry.
Many of crypto's most prominent leaders, like Mr Powell, are technologists who discovered digital assets early, cultivated devout Twitter followings and did not hesitate to engage their detractors in online battles.
With the sector reeling from a slump that has shaved off roughly US$2 trillion (S$2.8 trillion) from cryptocurrencies' market value and landed some bosses in bankruptcy court, regulators' cross hairs or worse, boards, are starting to look for different skills.
"If there is a firm in complete crisis and meltdown, you need an adult in the room, and you need that adult in the room to understand regulation and compliance," said Ms Deepali Vyas, who leads executive search for areas including crypto at Korn Ferry.
Ms Vyas is currently looking for CEOs for a crypto exchange and a crypto miner, which she declined to identify, and she expects more C-suite changes throughout the industry in autumn.
The wave of changes started in earnest in early August with Mr Saylor, who founded MicroStrategy in 1989, giving up his CEO title to focus more on Bitcoin - even after his buying of the token led to a US$918 million second-quarter impairment charge. Two weeks later, Mr Moro stepped down as CEO of Genesis, the crypto brokerage stung by exposure to defunct hedge fund Three Arrows Capital.
On Aug 24, Mr Trabucco, the co-CEO of Alameda, announced that he was stepping down to "prioritise other things". Like at Kraken, insiders are taking over at MicroStrategy and Alameda. Genesis appointed COO Derar Islim as interim CEO while it searches for a permanent replacement.
Mr Powell, 42, said his decision to step down was more than a year in the making, and driven in part by a desire to deal with "personal stuff". He plans to devote "maybe 40 hours a week instead of 80 hours" to Kraken, he said in an interview, adding that he will focus more on products and advocacy and less on management.
In June, The New York Times published an article that said Mr Powell had "ignited a culture war" among Kraken's employees through comments that some saw as "hurtful". On June 15, the day the Times' story ran, Mr Powell published a Twitter thread that said, among other things, about 20 Kraken workers were "totally not on board" with its corporate culture.
Replacing founders carries its own set of risks.
"They tend to have this incredible ability to influence the community or engage developers. That is very important in crypto," said Mr Stefan Cohen, a partner at Bain Capital Crypto, an investment fund focused on early-stage protocol projects and investor in BlockFi and MakerDAO. "It is very hard to move these people out and I don't think you would really want to."
Most crypto board members and investors are used to the volatile nature of the asset class and so tend to be less inclined to blame management in a "down cycle", Mr Cohen said.
That said, crypto is changing in ways that will likely drive further changes in companies' top ranks. After market calamities ranging from the implosion of a major stablecoin in May to several crypto lenders around the world going bankrupt in the following months, regulators are determined to tame the industry and pre-empt what they perceive as potential risks to the wider financial system.
One job that might need filling in the next few years: running Binance Holdings, operator of the world's biggest crypto exchange.
Binance's billionaire CEO and co-founder Zhao Changpeng has indicated that he may step aside within five years to become chairman.
He said on a July podcast with Bankless that he has been CEO of Binance for five years and one should not remain in the role for longer than 10 years.
"So I think somewhere between now and five years later, I should retire," he added.
Asked about Coinbase Global CEO Brian Armstrong's succession plan, a spokesman for the crypto exchange pointed to the company's April proxy statement, which says the board's nominating and corporate governance committee regularly evaluates succession planning for senior positions, including that of the CEO.
FTX declined to comment on succession plans for CEO Sam Bankman-Fried.