Mad Crypto: A look at Coinbase's changing of the guard

This post first appeared in Frank Chaparro’s weekly column “Mad Crypto,” which is sent to Genesis members’ inbox every Monday morning. 

At this point, it seems like each week brings a new executive exit from Coinbase's C-Suite. 

As The Block reported last week, Asiff Hirji, the former COO and president of the San Francisco cryptocurrency exchange, stepped down, following the exit of other top brass including Dan Romero, Balaji Srinivasan, and Christine Sandler. Emilie Choi, the former M&A lead at LinkedIn and investment banker, has stepped into Hirji's position. 

There's no doubt Coinbase looks different than it did a year ago, when headlines and pundits suggested it was the "Goldman Sachs of cryptocurrency." Over the last year, the firm scrapped a project in Chicago to revamp its matching engine, scaled back its ambitions to build out a full-scale prime broker business, while seeing Wall Street-grade talent flee. The writing has been on the wall for a while that this shift from finance-centric to tech-centric has been underway, but the passing of the torch from Hirji, former COO of TD Ameritrade, to a former LinkedIn executive cements this shift.

Indeed, Choi's appointment marks a new direction for the firm. For starters, an insider says it will allow CEO Brian Armstrong to take a more hands-on approach in leading the business. The person, who described the chemistry between Choi and Armstrong as great, added that Choi's appointment will allow Coinbase's CEO to take on a lot of the product experience and development work that was once delegated to Balaji and Asiff. In a sense, you can think of Armstrong as the creative brain behind Coinbase and Choi as the executor-in-chief.

As for what aspects of the business will be prioritized under an Armstrong-Choi led regime, readers of this column can look no further than The Block's podcast, The Scoop, for some hints. 

1. Earn: Choi emphasized the importance of its Coinbase Earn platform, which enables customers to earn cryptocurrency from learning about them, during an episode with The Scoop, noting that the unit paid for itself "multi-fold" since they acquired it and that it "bolsters" its trading and custody businesses. "We’re going to continue to see massive amounts of value from it," Choi said. "I don’t necessarily think the ecosystem understands the value of it now."
2. International: A source familiar with the company's business confirmed that Choi's appointment signals the firm is going to start taking a more international approach to running its business. Choi previously ran the international business for the firm, a position she took on from Romero. 
3. "Tuck-ins." Choi told The Block that the firm will focus its M&A activity on "talent and technology tuck-ins." Such acquisitions will be akin to: "acqui-hires but it also includes like maybe for example if somebody is doing some amazing thing in staking that we haven’t yet built and they just started building it and they have a proof of concept and then we want to bring that in and help them rebuild it because they’ve already been thinking about that problem forever."