From SoFi Scandal to Blockchain Unicorn: Cryptocurrency’s Forgiveness of Sexual Misdeeds
Mike Cagney left SoFi under a dark cloud. He's found a welcoming home in blockchain.
The news last week that Figure, a lending startup based on blockchain technology, had raised $103 million with a unicorn valuation of $1.2 billion, wasn’t just proof that the blockchain industry is still very much alive and well. It also cemented the comeback story of Mike Cagney, who co-founded Figure after resigning as the CEO of SoFi a little more than two years ago amid sexual harassment allegations against him and the fintech company.
The blockchain and cryptocurrency industry has a bit of a reputation, in its short history, for insensitivity to women, at best, and at worst, a tolerance for misconduct. Even at the height of the Bitcoin bubble in 2017, the proportion of female cryptocurrency investors was estimated to be as little as 4%. Afterparties for major U.S. crypto conferences have been held at burlesque and strip clubs. At blockchain events, women have reported being groped while onlookers said nothing, and even unwittingly drugged. You get the picture.
At the same time, a certain segment of the crypto community—perhaps the same segment that despises all manner of government oversight and regulation—seems uninterested if not opposed to advancing gender diversity in the industry. Take, for example, the time I tweeted about Coinbase’s hire of a second top female executive last year. Of the 70 odd people who replied, the bulk of them seemed to share the views of @AmkoMehmi, who tweeted back, “Who gives a F about gender?”
That’s all to say that if ever there were an industry poised to embrace Cagney despite his mistakes, it would be this one—though Cagney and his backers, for their part, say they actually do give a F about creating a workplace where women feel welcome.
“At SoFi is it was a very much performance-oriented culture, and unfortunately it was a performance-at-all-costs culture, and I in particular tolerated some bad behavior,” Cagney tells Fortune. “At Figure, we put culture first, which was never something we’d done at the previous company.” For example, Cagney’s other four co-founders at Figure are all women (including his wife, June Ou), as well as about half of the company’s senior executives, though that wasn’t necessarily intentional, he adds. “It’s not out of any particular objective or trying to hit a ratio—it was just trying to hire the best people,” says Cagney.
Figure itself specializes in home equity lines of credit and recently expanded into mortgage and student loan refinancing; so far it has originated more than $700 million in such loans on a blockchain, using smart contract technology to automate the process of verifying credit and financial information.
Anthony Pompliano, whose firm Morgan Creek Digital led the investment round and who is joining the board of Figure, says he didn’t meet Cagney until after the CEO had resigned from SoFi. But Figure’s executives and board are engaged in a “constant conversation around culture and ethics,” and the subject of preventing harassment “came up multiple times” at the most recent board meeting, says Pompliano: “Everyone is committed to making sure that those mistakes don’t get repeated here.” (Pompliano is the fiancé of a Fortune writer.)
The company aims to originate at least $3.5 billion in loans in 2020, and is also looking at other potential applications for the blockchain (called Provenance) upon which Figure relies. That could include government bond issuance as well as institutional deposit taking and lending, says Cagney, adding that Figure is in discussions with “more than one” central bank—though he declined to specify which ones.
Jen Wieczner