Some employees at Bitget’s new blockchain, Morph, initially thought of the L2 network as a potential future rival to Coinbase’s Base.
But sources familiar with the project tell Blockworks that Morph has been stymied by internal dysfunction. Sources claim that since a $20 million seed raise in March of last year, team conflicts, flashy spending and a mysterious “shadow CEO” have led to layoffs, delays and a loss of direction.
Blockworks spoke with a dozen current and former employees who were granted anonymity to share candid details of what went wrong inside one of Bitget’s most public bets.
Morph’s beginnings
Exchanges are crypto’s largest apps. One way these digital asset titans capitalize on their popularity is by launching their own blockchains.
Binance first launched the BNB Chain in 2020. Coinbase launched an Ethereum layer-2 named Base in 2023. Kraken, OKX, and Gate.io have all built or are building blockchains.
These chains can be lucrative. Base generated $76 million in gross profit in 2024, per Blockworks Research.
It was in this context that an L2 named Morph became a hot ticket after being incubated by Bitget, the 10th largest exchange by spot volume. But instead of following a more classic startup model where two co-founders come together with a single idea, Morph saw two co-founders who didn’t know each other become paired together.
The team behind Morph brought in Azeem Khan — who lives in the US and was previously head of impact at Gitcoin — and Cecilia Hsueh, who is based in Singapore, according to her LinkedIn. Hsueh was formerly chief marketing officer and, briefly, the CEO of the crypto exchange Phemex. She was tapped as CEO of Morph, while Khan became chief operating officer.
Things looked bright at first. As crypto fundraising began to recover, Morph raised $20 million in seed funding from US-based venture firm Dragonfly. Other investors included Pantera, MEXC Group, Bitget’s venture arm Foresight Ventures, and Spartan Group.
Bitget and Foresight didn’t return multiple requests for comment on Morph. Dragonfly and Pantera declined to comment when reached.
Morph’s mainnet went live in late October of last year. According to Morph’s block explorer, the L2 had roughly 16,000 transactions on Monday, May 12. To put those numbers in perspective, Base averages several million daily transactions, per a Blockworks Research dashboard.
The launch was only half the battle. The other big goal was to launch a token, former employees recounted, but this has yet to materialize.
Last month, Morph teased that folks who mint so-called Platinum NFTs would be “securing their position in the ecosystem at a $500 million FDV valuation, with 50% token unlock at TGE.”
The seed round had put Morph at a $125 million valuation in March 2024, according to a person familiar.
Since the raise, however, Bitget’s layer-2 has experienced a turbulent year.
‘Ghost founder’
As Morph staffed up and tried to bring a working blockchain to market, cracks emerged among its leadership.
People familiar described tension between Hsueh and Khan, who did not know each other before being tapped as co-founders.
Khan declined to comment when reached by Blockworks.
Bitget, which is not available in the US, has seen strong growth the past few years in Africa, South Asia and Southeast Asia, according to company data. Morph initially aimed to reach users in the Global South who are not being served by other exchange blockchains, as co-founder Azeem Khan explained in a CoinDesk interview last year.
Strategically, Khan and Hsueh were not always aligned, per several sources. While Khan talked about emerging markets in press appearances, those initiatives were slow to materialize internally, former employees recounted. A team that spent months planning out activations in those markets was told they wouldn’t receive a budget, a source said.
Stranger still, employees who spoke to Blockworks sensed that neither Khan nor CEO Hsueh seemed to always have the final say on things.
One employee described Khan as being more like a “ghost founder” than an actual co-founder, and noted they’d never seen anything like it throughout their crypto career.
A lot of decision-making power seemed to rest with Forest Bai, a co-founder and partner of Foresight Ventures (Bitget’s venture arm and an investor in Morph) as well as chair of The Block. Multiple people confirmed that Bai was like a “shadow CEO.” Sources noted that he had oversight on things like spending and company strategy.
Khan announced that he was leaving Morph in March, noting in an X post that stepping down was “the best path forward for me.” He’s since emerged as a co-founder of a different blockchain named Miden.
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The lack of alignment and independent decision-making power contributed to Khan’s departure, according to multiple people familiar.
Hsueh has stayed on as CEO — although her power internally has allegedly waned further in recent months, three people told Blockworks.
Who’s really in charge?
Nearly everyone Blockworks spoke to described Hsueh as having a limited understanding of the technical ins and outs of blockchain. While it’s not a prerequisite for an executive to be crypto-native, sources claimed that Hsueh was out of touch with blockchain users and didn’t show an interest in learning about the technology, creating a feeling that Morph lacked clear strategic direction.
Instead, Hsueh was preoccupied with growing her online presence, sources said. Three ex-employees recounted being asked to engage with her posts. Others added that Hsueh would prioritize announcements about Morph on her personal account over the official account.
At one point, Hsueh took to posting pictures of her feet on X.
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It’s unclear how much power Hsueh still holds, though an ex-employee described her as being “teflon.”
While she’s listed as the CEO in company documents, Foresight Ventures co-founder Forest Bai’s name appears next to hers on an internal organization chart shared with Blockworks.
Neither Hsueh nor Bai returned emails or messages requesting comments.
While Bai has taken more control in recent months — having been officially added to the company Slack, per three sources familiar — others noted that he held sway over both Khan and Hsueh before Khan’s departure. Officially, Bai is listed as a consultant in internal Slack messages seen by Blockworks.
Another internal Slack message shared with Blockworks requested Bai’s presence in ecosystem and marketing team meetings.
Deal or no deal?
In 2024, Morph was a big spender, four people said. Granted, the company had just finalized a $20 million raise.
But the spending included events with K-pop band tripleS, where Morph allegedly covered the group’s travel and accommodations, one source told Blockworks. An invite on Lu.ma, a popular website utilized by projects planning post-conference events, teased a “special performance” by tripleS in April of last year. The event was hosted by Zircuit, Bitget, Morph, Foresight Ventures and Quantstamp.
Multiple sources discussed Morph spending hundreds of thousands of dollars on events at crypto conferences. At Token2049 in Singapore, Morph hosted an all-day side event at Singapore’s ArtScience Museum, sources noted. A Lu.ma invite shows that the event was attended by the likes of Vitalik Buterin, Avara’s Stani Kulechov and Aptos’ Mo Shaikh, with popular South Korean performer DJ SODA as the main act at the afterparty.
The large event spending didn’t align with the return on investment or bottom line, another source noted. And, while events seemed to get money, Hsueh seemed reluctant to greenlight actual business deals, people familiar told Blockworks.
The bright side of the company’s spending, per a source familiar, was that Morph initially compensated its employees competitively.
Outside of events, there were discussions for a physical office in New York City that culminated in a space on One World Trade Center’s 77th floor, three sources told Blockworks.
The office is also shared with Foresight and The Block, though it’s unclear who’s on the lease.
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On the developer side, Morph once paid a team of developers over $200,000 to build a fork of Uniswap v2, according to multiple sources. Since Uniswap’s code is open source, one ex-employee felt that the project overpaid for the DEX, which became known as BulbaSwap. BulbaSwap currently holds around $93 million in total value locked, according to DeFiLlama, making it around the 200th-largest DEX by that metric.
The ‘dark arts’
Morph’s burn rate may have been offset by a planned Series A fundraise, but a fresh funding round is yet to materialize.
“We are looking for our next round,” Hsueh said in an interview with Web3TV in September, noting that “running a chain is very expensive,” and the company was looking to grow its headcount.
However, people familiar noted that there were tensions around a Series A prior to Khan’s departure. Bai, two people familiar said, pushed for Morph to raise another round.
Blockworks was unable to determine the current status of the Series A.
Even without the raise, a source familiar told Blockworks that Morph isn’t out of money yet, and it’s still backed by Bitget.
Morph didn’t return multiple requests for comment.
Meanwhile, Morph has had some trouble retaining talent. One ex-employee said it’s faced a “crazy amount” of turnover, from departures to layoffs. Some employees have also taken salary cuts, others noted.
Multiple employees said they didn’t receive token contracts. According to one source, Morph attempted to force some employees who did receive contracts to sign new ones in May of last year which would have changed their vesting periods.
Another source told Blockworks that the departures have left some teams depleted, and some Slack channels have little to no activity. Despite the hardships, Morph still plans to launch its token by the end of this year, a person familiar said.
For investors, Morph’s saving grace may be its connection to Bitget, which may yet be keen to list Morph’s forthcoming token at launch.
Bitget understands the “dark arts” of facilitating trading around tokens that may have questionable value, said an ex-employee.
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