Oct 5, 2020 7:00 AM

The Turmoil Over ‘Black Lives Matter’ and Political Speech at Coinbase

The CEO of the cryptocurrency pioneer declared political discussions out of bounds—then gave employees a week to agree or leave.

In early June, a week after George Floyd was killed by Minneapolis police, employees at Coinbase gathered, virtually, for an emotional meeting. In the previous few days, mirroring workplaces elsewhere, the company’s Slack channels had been filled with comments about the nationwide protests and demands for more support for Black employees. In the background hovered a specific question: Would Coinbase and its CEO, Brian Armstrong, make a public statement about Black Lives Matter and the racial justice movement, as so many Silicon Valley companies had? In an earlier email, Armstrong had told employees that he was hurting along with his employees, but stopped short of that commitment. “It’s hard to know how to respond in a moment like this,” he wrote. So that day, Armstrong was there to listen.

Many of the speakers were members of Colorblock, the company’s internal resource group that includes many Black employees. Attendees describe the conversation as raw, with speakers and viewers in tears. Black employees described feeling invisible at a company that had not publicly acknowledged their pain, and like “a clown” for trying to defend Coinbase’s inaction to outsiders. Coinbase, an exchange for buying and selling cryptocurrency, is not necessarily a household name. But it had grown into an influential force in Silicon Valley, especially in the past three years as bitcoin and other cryptocurrencies went more mainstream. And the company’s stance mattered to many of its more than 1,000 employees.

The next day, Armstrong attempted to address the subject in a company all-hands meeting. The effort quickly unraveled. The CEO began by acknowledging the pain of the speakers the previous day, but then turned to a discussion of Coinbase’s mission of “economic freedom” and its “apolitical” culture. His waffling in response to a question of whether racism was linked to that mission appeared to light a fire. Pressed on whether the company would say the words “Black Lives Matter,” Armstrong again demurred. “TBD,” he said, adding that language had been drafted but that he had more to learn about what such a statement would mean.

The reaction was swift. Dozens of employees began posting “Black Lives Matter” in internal Slack channels, and executives in the meeting, including Armstrong, hastily added that they did personally believe that “Black Lives Matter.” But a virtual “walkout” had already begun to spread—through the customer experience team, the employee resource groups, like Colorblock, and the engineering teams. Senior engineers encouraged junior staff to close their laptops in solidarity.

The sudden work stoppage appeared to speed up Armstrong’s education. Within hours, a lengthy Twitter thread appeared on his personal account. He wrote the words “Black Lives Matter,” reiterated his support for Black employees at the company, and announced plans for Coinbase to donate to causes chosen by staff. “I really did not know what to say about it for a long time, and I'm still not sure I do. But I've been getting educated,” he wrote. In an apologetic email to staff the next day, Armstrong also announced measures to improve diversity and inclusion at Coinbase, including more listening sessions with employees and a commitment that 20 percent of engineers hired out of college would be from underrepresented groups. (In 2020, by that point, it was 3 percent, according to the email.) There was more work to do, but the matter appeared relatively settled. “I was feeling hopeful,” one employee says.

But in subsequent weeks, the tone changed, past and current employees say. The first moves were subtle. Executives tightened control on internal communications, eliminating the popular all-hands format in which staff could openly question executives. In August, they issued new guidelines for discussion of political causes at work ahead of the presidential election.

Then, at another all-hands meeting in late September, and in a later blog post, Armstrong took a firmer stand. Coinbase would not engage in “social activism,” he wrote, outside of the company’s core mission of “building an open financial system,” arguing that strife attributable to activism had hurt productivity at companies like Google and Facebook. “Coinbase has had its own challenges here, including employee walkouts,” he wrote, in a direct reference to June.

On Tuesday, Armstrong further upped the ante, offering severance packages for any employees who disagreed with the company’s “new direction.” (The email was first published by The Block.) Staff were given one week to either jump ship or get on board with the vision, however they interpreted it.

Those actions—taken, in large part, with public flourish—have made Armstrong a lightning rod in a Silicon Valley culture war, set against a broader American one. Ironically, they’ve put Coinbase and its employees in the thick of a political debate far outside the bounds of the company’s core mission—precisely what Armstrong said he hoped to avoid.

To many, the move to limit activism clashed with Silicon Valley’s long tradition of free speech, and recent employee protests at tech giants. These people also fear Armstrong’s stand—and potentially copycats it may inspire—will slow or reverse the tech industry’s small gains to be more inclusive to women and minorities. Plus, drawing lines about speech is simply impractical, they say, especially at a company whose mission involves financial access. But for others—most prominently, some start-up founders and venture capitalists, some of whom have long railed against workplace activism and “cancel culture” in Silicon Valley—it articulated what had made the tech industry successful: a pure, inward focus on the product.

Within the company, the lines are more blurred. Some workers have cheered Armstrong’s decision, often quietly for fear of pushback from colleagues. (The “silent majority,” Armstrong called them at a company all-hands Thursday, according to an attendee.) Others have taken Armstrong’s offer and quit, or are actively discussing whether to do so with their colleagues.

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But for many, the reaction has been fear and confusion. The CEO’s apparent redefinition of company culture felt personal, hinging on the pressure Armstrong felt from employees to say Black Lives Matter. They view the statement as moral, not political or activist. “A lot of people feel that saying Black lives matter is an ethical statement. They feel it should be an easy thing to say,” one engineer says. Armstrong said in June that he agreed with the statement, and that police brutality was a problem. But he wavered on whether a statement that included “Black Lives Matter” would mean endorsing BLM as an organization and set of policies, like defunding police. Armstrong and Coinbase declined to comment for this article.

Employees say the public meltdown has been strange because Coinbase was not a particularly “activist” environment in the first place. Political discussion was rare at work outside the context of the George Floyd protests, and had largely died down before the CEO resurrected the issue. As one person put it, many agreed with the blog post’s principle of work as a refuge from outside political strife. But with a sudden demand to get on board with the message or leave in a week, even employees who did not feel particularly strongly about discussing politics at work now face a question: What does getting on board mean? Does it bar discussion of racial justice generally? What about sexism? Or affirming the rights of LGBTQ employees? What would the company say when the next George Floyd moment arrives, as it inevitably will?

Subsequent meetings and emails to staff have emphasized the importance of “inclusion and belonging” at Coinbase, and that employees can still mutually agree to have political conversations. The company, by all indications, will not make another public statement like the one Armstrong issued during the George Floyd protests. But employees say the lines remain blurry.“The message for me is it feels like they're telling me I'm not wanted,” says one employee who agrees with much of what Armstrong wrote.

Employees say the new guidelines, and the buyout offer, appear to be part of a long-held desire by Armstrong for a cultural reset. Coinbase has changed significantly in recent years. Founded in 2012, employees say the company initially reflected the crypto industry: primarily white, male, and with a libertarian bent—even more so than the broader tech industry. But when the price of bitcoin soared in late 2017 and crypto went more mainstream, the company went with it. The number of employees tripled within a year, with heavy recruitment from firms like LinkedIn, Facebook, and Google—the very companies whose “divisive” culture Armstrong calls out in the blog post. The pitch to future employees included a social mission of empowering unbanked people around the world, through cryptocurrency, and a company culture to match. Coinbase has long been rumored to consider an IPO in 2021; the company made its first investor presentation, seen as a precursor to going public, in August.

The result of that growth was an increasingly disconnected culture, as Armstrong himself has written. Employees say they saw that disconnect in specific ways. It was visible in leadership’s apparent disinterest in developing employee resource groups, which were led by volunteers whose efforts went largely unacknowledged. (Company executives promised to be more active in the groups in June.) Others point to conflicts within the workplace, like whether to explicitly label bathrooms at the company’s San Francisco office as gender inclusive—an incident known within the company as “bathroomgate.”

In March 2019, Armstrong posted a public version of the company’s “culture doc.” He introduced the document as a “reset of expectations” for a culture that had “drifted significantly” as the company grew. Drafting the culture doc had been a lengthy, and hotly debated, process. The final product contained vague language about inclusion, but employees involved in the process said it was a fight to include values about diversity in the document at all.

When employees in June closed their laptops to protest the company’s lack of a stance on racial justice, it seemed to bring those divisions home.

Soon after, employees say there were rumblings that not all had been settled. In a staff-wide email later that month, Armstrong announced a change to the format of the all-hands meetings. For years, employees had submitted questions to the executive team via Slack in a channel called #ask-OG, and could freely ask follow-ups during the meeting. Under the new system, employees would vote on questions ahead of time. The rationale was that Coinbase, now with over 1,000 employees working remotely around the world, had grown too large for open discussion, and that the changes had been underway for a long time. But employees saw it as a response to the events earlier that month. The shift was dramatic for longtime employees, who saw the all-hands meetings as symbols of the company’s values and accessibility.

Still, Armstrong’s actions last week caught some employees off-guard. Employees note the public blog post was more measured than the message conveyed verbally to staff at an all-hands meeting. There, Armstrong referred more explicitly to the events in June, they say, accusing some employees of failing to act as members of the company’s “championship team.” Individuals who had previously spoken out say they now feel like targets of a CEO who had been stewing for months. The company asked employees to delete posts questioning the policy from the all-company Slack channel, though discussion is still allowed in a channel related to belonging and inclusion.

It’s unclear how many employees will take the offer to leave in the middle of a pandemic. Debates about the blog post’s meaning means—and what employees are agreeing to if they stay—are still raging within the company, with a deadline of Wednesday to decide whether to leave or stay. Many Coinbase employees are in-demand software engineers and data scientists who likely could find other jobs quickly. But the staff also includes many in positions like customer support, who face a more difficult choice. Some employees described the arrangement as “cruel” given the circumstances, and described the situation as a “bait-and-switch.” Newer employees had arrived expecting one culture, or at least the opportunity to shape a culture into one that was more open and inclusive; the invitation to exit now told them the opposite.

Others were frustrated that the dispute had spilled into public view—on Armstrong’s terms. “For me this was an opportunity not for Coinbase to be an activist company but to say no we support Black lives and we’re not a bunch of crypto bros,” one engineer says. “Essentially Brian said, ‘no we’re crypto bros.’ To me that’s a waste.”