The crypto market spent 2021 riding high on major investments and larger-than-life valuations. Several crypto billionaires were minted in 2021, and the first nonfungible token (NFT) billionaires followed in early 2022.
The Federal Reserve in March boosted interest rates for the first time since 2018, while war blossomed between Russia and Ukraine. Two months later, TerraUSD, a stablecoin designed to reduce volatility in the market by maintaining a fixed value, imploded. Unlike other stablecoins, Terra wasn’t backed by a stable reserve asset.
After the collapse, more than $200 billion was erased from the crypto market in a single 24-hour period.
In the months since, the slump has amounted to $2 trillion in total.
Amid a rapid slew of executive moves in late September — punctuated by high-level departures at Celsius, FTX and Kraken — FTX Digital Markets co-CEO Ryan Salame tweeted: “Probably just easier for everyone who’s not stepping down from their role this month to raise their hand!”
Sam Trabucco, former co-CEO of crypto trading firm Alameda Research, who himself stepped down in August, retweeted Salame 58 seconds later.
Tyrone Ross, a California-based financial adviser and wealth manager with a longtime focus on crypto, noted that not every resignation should be chalked up to the downturn. In the case of Celsius, for example, the resignations may not have happened without their legal woes.
For some companies, pending regulation will soon provide a framework that hasn’t yet existed, so they may be looking to elevate someone with regulatory chops. (Binance.US, for example, tapped former Acting Comptroller of the Currency Brian Brooks to become its CEO in 2021. He would resign three months later but move to another crypto firm, Bitfury, where he remains CEO.)
But for the shake-ups resulting directly from the downturn, changes in the C-suite represent changes in strategy.
“CEOs that get companies to certain points are not always the CEOs to walk them through tumultuous times, and not always the ones to handle downsizing or revaluation of the company,” Ross said.
He noted, too, that being a CEO “sucks.”
“It sucks even when the market is going straight up — especially in crypto, where you have to fight for everything because it’s still illegitimate to the masses,” Ross said.
Matt Sherman, a financial analyst with Merchant Maverick, told Banking Dive that as the federal government ekes closer to regulating crypto, some executives “feel like increased rules and scrutiny is not what the cryptocurrency industry is supposed to be about.”
Mirroring Ross’s sentiment, Sherman said the bear market has forced companies to mitigate losses and (potentially) capitalize on acquisitions, which “requires a different skill set than managing a company in a bull market.”
Some executives opt for more of a back-seat position, joining boards or staying on in an advisory role.
Given the early November implosion of crypto exchange FTX, more may come. Our tracker will keep you up to date on who’s gone and, if it’s known, what’s up next.