Crypto Exchange Kraken’s New CFO Previously Paid $65,000 Penalty For Misleading Investors And Breaching Fiduciary Duty

The new chief financial officer of $10 billion cryptocurrency exchange Kraken, Carrie Dolan, has a long history of not only helping run wildly successful fintech startups, but being at the center of one headline stealing collapse.

After rising through the ranks of Chevron and Charles Schwab in the 1980s, 90s and 2010s, she joined rising star peer-to-peer lending startup Lending Club, led by Renaud Laplanche, and kept its books balanced as CFO during the San Francisco-based firm’s meteoric rise to an $8.5 billion IPO in 2014. Four years later she and two others settled fraud charges with the SEC for using Lending Club customer funds to make company purchases.

Despite this blemish, Dolan’s experience helping companies raise capital and go public could prove just what Kraken needs to finally partake of its own public offering, which CEO Jesse Powell said last June is on the firm’s radar, possibly by the end of this year. If Dolan can make the successful side of her history repeat itself, Kraken could join competitor Coinbase, with which it tied for the top place in Forbes’ inaugural rankings of the world’s best crypto exchanges, and which went public last year.

“I’m excited to join this incredible company at a pivotal time,” Dolan said in a statement released by Kraken earlier this morning. “And work with the rest of the team to continue delivering on Kraken’s mission to drive mainstream adoption by making sure crypto is understood, easily accessible and trusted.”

The statement further says she will play a “key role” in helping Kraken become the “portal of choice” for retail and professional investors.

Dolan started her career in 1987 as an accountant in Chevron’s Natural Gas Accounting group, according to her LinkedIn profile, and stayed with the gas giant for 12 years, being promoted to CFO and director of Chevron Credit bank. In January 2010 she concluded a 10-year career at Charles Schwab as the CFO of Schwab Bank and joined Lending Club later that year when it had 40 employees, according to her LinkedIn profile.

During her time at Lending Club (NYSE: LC) the firm helped define the peer-to-peer lending space, before going public in December 2014. Then, nearly two years after she left the company in September 2016 the U.S. Securities and Exchange Commission charged her and Laplanche with improperly adjusting fund returns to improve the returns they reported to investors.

Though she didn’t admit or deny the charges as part of her settlement, she agreed to pay $65,000 of a larger $4.2 million penalty against Lending Club itself and LaPlanche, who was barred from the securities industry as part of the penalty. Though Lending Club still exists today, it is a shadow of its former self, valued at $1.7 billion.

“Investors depend on fund advisers to give them the straight scoop on performance so they can make informed investment decisions,” said Jina Choi, director of the SEC’s San Francisco Regional Office in a statement at the time of the settlement. “Advisers who adjust their valuation processes to boost results are in breach of their duties to investors.”

Since then, Dolan has continued a seemingly successful career as the financial boss at San Francisco-based supply chain finance startup Tradeshift during a time when it raised $200 million at a reported $2.7 billion valuation. The capital raise was also reportedly part of a planned IPO.

Dolan replaces Kraken’s previous CFO, Kaiser Ng, who had the position for five years, until January 2022, when he left to join an unnamed “crypto-native remote-first organization,” according to his LinkedIn. In November 2019, a former Kraken employee sued Kraken parent company Payward and Ng in the San Franscico Superior Court, alleging that the CFO offered to pay him rent in exchange for using his address in certain legal documents. A countersuit filed by Kraken was dismissed in 2020, and after a confidential settlement was reached in September 2021, the action was dismissed with prejudice.

“Carrie has a strong risk management track record,” said a Kraken spokesperson. “We’re confident in her abilities to expand our business and lay the foundation for the next growth stage for our company.”