“Crypto Dad” Giancarlo to Quit BlockFi’s Board After 4 Months. Actually, the departure coincides with BlockFi falling under legal pressure regarding its flagship interest-bearing accounts.
Following only four months on the board of directors, former U.S. commodities regulator Christopher Giancarlo stepped down. Moreover, there were no immediate details on why Giancarlo is leaving the board of the cryptocurrency lender. No comment was received from him despite multiple requests.
According to a press release from BlockFi, Ellen-Blair Chube has replaced Giancarlo. However, as a consultant to BlockFi, Giancarlo will continue to provide strategic counsel to the company.
During his time as chairman of the U.S Commodity Futures Trading Commission (CFTC), “Crypto Dad,” as the Digital Dollar Project co-founder was known, was the first independent director of the BlockFi board. His abrupt exit occurs at a critical setback for BlockFi.
In parallel with fighting legal threats, the company is readjusting from a messy $500 million funding round. As well, strategizing for a stock market debut set for as early as 2022.
A legal dispute over BlockFi’s interest-bearing crypto accounts is likely to be the biggest hurdle facing the company. A number of U.S. states, including New Jersey, claimed in July that BlockFi’s interest-bearing accounts (BIAs) were unregistered securities.
BlockFi forewarned customers in case it does not solve the New Jersey Case, the company could be obliged to stop onboarding new interest accounts “globally”. On Sept. 30, a cease-and-desist order goes into effect after three delays.
A tsunami of negative press put BlockFi into crisis mode right before it completed a massive round of funding at a nearly $5 billion valuation. According to venture capital reporter Eric Newcomer, the lead investor Third Point LLC soon backed out.
One month later, and the independent director is quitting as well. On the other hand, Professor Matthew Semadeni, from Arizona State University who also studies corporate governance, stated that if an independent director leaves, it represents a significant indicator.
Semadeni explained that Giancarlo’s status as a former regulator offered BlockFi an advantage. Stating that independent directors have the ability to give a board legitimacy.
After Giancarlo’s April arrival, BlockFi’s boardroom gained gravitas. Since he did not own BlockFi stock, he became the only independent voice among company insiders and investors. The Company described Giancarlo’s addition at the time as a part of a board expansion to support a public market-ready governance model.
After Giancarlo’s resignation, BlockFi hopes that Chube, a managing director at William Blair, will be more driven to remain.
During Giancarlo’s brief tenure, Semadeni compared his actions to someone making an offer on a home. Making an inspection, going over the results. Then saying, “I’ll pass on this house”.