On Thursday, Coinbase attempted to outrun a “negative story” that was about to be published by The New York Times. We now know why.
Nathaniel Popper, a cryptocurrency and technology reporter at the Gray Lady, has written a damning exposé that claims the exchange “has long struggled with its management of black employees.” The title of his investigation? “Tokenized.”
Speaking to 23 current and former Coinbase employees, the story claims:
- At least 11 complained to their HR department or managers about racist or discriminatory treatment
- A manager suggested that a black colleague was dealing drugs and carrying a gun, in a conversation carried out in front of her co-workers
- Black employees “were broadly described as less capable” at a recruitment meeting
- Just 3% of Coinbase employees are black—half the average across most of tech
- One black woman said she faced “constant condescension” and felt she was being bullied every day at work—once being told she didn’t “have the right brain for this”
Popper’s report paints a picture of a company determined to build an “all-star team” that mainly consisted of young white and Asian men. Although black employees were encouraged to be present on days when reporters and photographers came in, those who spoke on the record claimed that they weren’t treated the same way as their white colleagues.
Alysa Butler, who resigned from Coinbase in April 2019, told the Times: “Most people of color working in tech know that there’s a diversity problem. But I’ve never experienced anything like Coinbase.”
And Cleve Mesidor, the founder of the National Policy Network of Women of Color in Blockchain, claimed Armstrong “was never committed” to increasing the number of black employees in a meaningful way.
Coinbase’s new stance falls flat
Popper’s reporting also revealed that black employees were hurt by Armstrong’s silence about the Black Lives Matter movement following the killing of George Floyd—and Coinbase’s decision to remain “apolitical” on social issues.
Back in October, as reported by Modern Consensus, 60 Coinbase employees decided to take a generous exit package that was offered by Armstrong for those who felt uncomfortable with the company’s new direction. Armstrong said he had been comforted by how many people decided to stay—but one black employee replied that this shouldn’t be seen as “reassuring.” In a message that was liked by more than 150 people on Slack, she wrote that this wasn’t about endorsing the exchange’s policies… it was just unwise to leave at a moment of high unemployment and economic uncertainty.
Discrimination treated ‘very seriously’
Coinbase said all claims of discrimination are treated very seriously. The company added that just three official complaints had been made in 2018-19, the period when many of the people who spoke to the New York Times worked at the exchange. Alsya Butler, who went on the record talking about her experience, was not among those official complaints—she said she was never told how to make one.
A Coinbase spokeswoman added that “no evidence of structural bias” was found during a consultant’s investigation over the summer—but this doesn’t tally with a report written by the customer support team last month, where many black employees work. Executives were warned that they haven’t “learned anything from the amount of time and labor put into listening sessions or the vulnerability expressed by black employees.”
The pre-emptive Coinbase blog post on Nov. 26 included an internal email that was sent to the exchange’s staff, which revealed that Coinbase CEO Brian Armstrong has met with a group of employees to discuss their questions and concerns.
“We don’t care what the New York Times thinks. The most important thing we care about is you, our employees, and what you think,” the email said.
The exchange went on to describe allegations that black employees were discriminated against as a result of organizational changes as false. Of the three complaints, it added:
“All of those complaints were thoroughly investigated, one through an internal investigation and two by separate third-party investigators, all of whom found no evidence of wrongdoing and concluded the claims were unsubstantiated. We have shared this information with the reporter.”
Coinbase added that it anticipated the story “will paint an inaccurate picture that lacks complete information and context,” even though it participated in a fact-checking process. The exchange went on to stress that it is committed to “maintaining an environment that is safe, supportive and welcoming to employees of all backgrounds”—adding that intolerant behavior is never acceptable.
Although the company went to great pains to cast doubt over the allegations set out in the article, it’s clear that Coinbase was anxious about some form of PR backlash.
The New York Times report is the latest setback in an annus horribilis for Coinbase.
Armstrong attracted controversy earlier this year when he said the company will strive to be “apolitical,” meaning that it wouldn’t engage with topics such as the Black Lives Matter movement.
But despite his desire to keep Coinbase apolitical—amid concerns it is a “distraction” from the company’s mission—Armstrong appeared to violate his own policy in the run-up to the U.S. election.
In late October, the CEO tweeted about an “epic post” where a founder of a meal replacement brand set out why he was voting for Kanye West. Armstrong quickly deleted the message.
That said, he did address Black Lives Matter in a thread on his personal Twitter account back on June 4 that began “I want to say unequivocally Black Lives Matter.” It went on to say, “I feel an obligation to support all employees at Coinbase, especially our Black employees right now, who are experiencing something I will never fully understand.”
The company has also faced a backlash for suffering outages which appear to coincide with major movements in the price of major cryptocurrencies such as Bitcoin.
During one of the more recent bouts of disruption back in June, the founder of Crypto Capital Venture, Dan Gambardello, tweeted:
“Dear @coinbase, I ask this with much respect – How does an exchange with an $8 billion valuation crash every time Bitcoin pumps 5%? I genuinely would like to know.”
Reports have previously suggested that Coinbase may be planning to pursue an initial public offering, in a move that would make it one of the first exchanges to be listed on the stock market. However, the New York Times article could contribute to much greater scrutiny about the company’s culture.
Armstrong has yet to publicly address Popper’s investigation on Twitter. Instead, he has pinned a Coinbase message directing customers to the blog post concerning the allegations. Coinbase replied to a request for comment from Modern Consensus with a link to that blog post.
It remains to be seen what action, if any, the exchange intends to take following the article. But given just 31 of Coinbase’s 1,000 employees are black, the scrutiny engulfing the company right now might be here to stay.