Coinbase Workers Rattled by Politics Ban and Fear Being Muzzled

(Bloomberg) -- Coinbase Inc.'s clampdown on discussing politics and activism at work -- and the offer of severance packages to employees who don't want to comply -- continues to ripple through the cryptocurrency exchange and Silicon Valley.

Many employees were shocked by Chief Executive Officer Brian Armstrong's blog post imposing the rules Sunday, and some are concerned that he is trying to stymie discourse that should be happening, according to two people familiar with the situation who asked not to be identified. Neither knew of anyone taking an exit package from the San Francisco-based company, but employees have until Oct. 7 to apply.

Jack Dorsey, Twitter Inc.'s CEO and a noted Bitcoin advocate, criticized Armstrong's ban on politics, saying late Wednesday the change runs counter to the core principles of cryptocurrencies. Other veterans of the digital-asset industry suggested Armstrong's stance represents a broader shift taking place in a sector that was founded by computer hackers and libertarian-leaning programmers.

Twitter's former CEO, Dick Costolo, also weighed in, tweeting that “me-first capitalists who think you can separate society from business are going to be the first people lined up against the wall and shot in the revolution.”

Read more: Coinbase's no-politics stance rankles Silicon Valley

The polarizing 2020 campaign, epitomized by the chaotic debate this week between President Donald Trump and Democratic challenger Joe Biden, has left many companies struggling with how to stay above the fray. But the cryptocurrency industry, built on iconoclastic ideas, faces its own challenges.

“This is highlighting an evolution in crypto culture,” said Adam Draper, a venture capitalist who was an early investor in Coinbase. “Crypto is about the innovation in finance and connecting the world's financial infrastructure. The culture of the early adopter was idealist and anarchist (which makes it the most vibrant one ever). In order to deliver on the vision of a crypto world, though, we need everyone to be working in it -- it needs to transcend idealism and anarchy.”

Since its start in late 2008, Bitcoin has enabled use of money without the help of -- or censure from -- central authorities like banks or governments. Many of the early advocates still exercise an outsize influence through their large coin holdings and crypto startup investments.

Then there's the Silicon Valley tech culture: working long hours -- essentially, putting everything else second to focus on the job. This extreme drive to succeed has produced world-changing companies such as Google and Facebook Inc., though Armstrong cited them as examples of enterprises now being hampered by politics and activism.

Coinbase has tried to navigate the two cultures since Armstrong, 37, co-founded the company in 2012. The firm grew to become the biggest U.S. cryptocurrency spot exchange, spurring speculation that it will pursue an initial public offering.

In the post, Armstrong said employees shouldn't debate political candidates internally, expect the company to represent their core beliefs or engage in activism at work.

“I want Coinbase to be laser focused on achieving its mission, because I believe that this is the way that we can have the biggest impact on the world,” he said, adding, “I recognize that our approach is not for everyone, and may be controversial. I know that many people may not agree, and some employees may resign.”

Armstrong sent out a subsequent internal email, offering exit packages to employees who disagree.

“It is very difficult to lead a large company and keep employees focused when everyone is working from home in the middle of a pandemic,” said Micha Benoliel, a Silicon Valley entrepreneur who runs the startup Nodle. Yet, he noted, “Coinbase is attracting diverse talent with people who want to have an impact. The first sentence you hear when you come to SV is, ‘This is the place where you can change the world from.'”

©2020 Bloomberg L.P.