(Bloomberg) — A former Wall Street trader who became the head of a major crypto company has been caught up in allegations about drug use and his relationship with a 19-year-old intern at a Bitcoin conference last year as part of a lawsuit filed by a former colleague.
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Phillip Gillespie, 40, the former co-chief executive officer of B2C2, was accused of excessive drinking, taking cocaine and hallucinogens, as well as giving the drugs to others, including the intern. The allegations surfaced in a Sept. 1 lawsuit in New Jersey against B2C2 by its former global head of options trading, Bradley Nagela, who said he was fired in retaliation for raising concerns about Gillespie’s behavior.
Gillespie, who stepped down as B2C2 CEO last November, said the allegations are “pure hearsay” and that Nagela wasn’t “in attendance at the conference in question.”
“Brad Nagela and I have never once met in person and our interaction was limited to a few calls,” Gillespie, who wasn’t sued as part of the lawsuit, said in an email to Bloomberg News.
The lawsuit offers a rare glimpse into personnel disputes in the crypto industry, which is still reeling from the falling price of Bitcoin tokens and the collapse of multiple companies.
It is also the latest fallout from the crypto industry’s notorious partying scene. The mood at Bitcoin 2022 — one of the industry’s biggest annual extravaganzas — remained feverish, drawing more than 25,000 attendees, including Michael Novogratz and Peter Thiel. Crypto dignitaries and devotees made the pilgrimage to Miami from all over the world, and so many after-parties were thrown that an Excel spreadsheet was passed around by conference-goers to plan accordingly.
Read More: Bitcoin Extravaganza Is ‘All About Eye-Catching’ Post-Pandemic
In the lawsuit, Nagela said he became alarmed after the company received an email from the father of the intern, who expressed concerns about the authenticity of the invitation for his daughter to travel to Miami from her home in Thailand, saying she is “too young” and worrying that it is “something related to prostitution.”
B2C2 investigated the father’s email and confirmed that Gillespie, who was based in Japan, had arranged to fly the intern to accompany him at the conference, according to the lawsuit.
The intern, reached by Bloomberg News, said in an email that allegations about her relationship with Gillespie in the lawsuit are not true, and she’s “grateful for the opportunity that Phil gave me to work at B2C2.” A Portuguese native living in Thailand, she took issues with the allegations in the lawsuit, which she said perpetuated “a certain image regarding the narrative of human trafficking and sexual exploitation.”
“This whole situation has been extremely difficult for me,” she said. “B2C2 was an opportunity for me to grow my professional career and I am deeply saddened that this has now turned into personal attacks against Phil and B2C2.”
A spokesperson for B2C2 said Nagela was terminated in September 2022 “following a period of significant underperformance” and the company will produce “detailed evidence to demonstrate this in court, but we’re unable to comment further whilst the matter is subject to court proceedings.”
Nagela’s lawyer, Jacqueline Tillmann, said that her client “had an ethical and regulatory obligation to report misconduct and financial malfeasance at B2C2.”
Founded in 2015, London-based B2C2, owned by Japanese group SBI Holdings Inc., is a crypto market-maker that executes trades for institutional investors and brokerages including Robinhood Markets Inc.
Prior to B2C2, Gillespie worked at Goldman Sachs Group Inc. in London, where he managed systematic market making in FX, according to his LinkedIn profile. He joined B2C2 in 2018 after being recruited by its founder and fellow Goldman alum Max Boonen.
Nagela, who was a US-based B2C2 executive, paints a picture in the lawsuit of a cloak-and-dagger battle that encompassed both his attempts to raise concerns about Gillespie and ultimately, his own dismissal.
While Nagela — who worked at B2C2 for about a year and a half — admits in the lawsuit that he didn’t attend the conference, he said he heard reports from subordinates about Gillespie’s alleged excessive drinking and cocaine use at a minibar and at another event.
He subsequently raised his concerns to the firm’s general counsel, Dean Sovolos, and a US-based co-CEO, Rob Catalanello, but he said he was stymied, at least partially, by the lack of a written complaint against Gillespie from someone at the conference, according to the lawsuit.
Nagela said some of the highest level managers at B2C2, including Nicola White, who has since become CEO, opted to “tolerate and turn a blind eye toward” Gillespie’s alleged behavior.
White and Sovolos both declined to comment. Catalanello, who no longer works at the company, also declined to comment.
Within a few weeks, Nagela’s own position had become untenable, according to the lawsuit. He said in May that a subordinate quit rather than take a promotion and fire Nagela.
On Sept. 1, the lawsuit says White told Nagela that he was being fired as part of a restructuring.
Gillespie, who had become sole CEO of B2C2 earlier that year, stepped down himself in November, about two months later. The company said in a statement at the time that he was taking a role at parent company SBI.
He currently is managing partner at AWR Capital, a London-based algorithmic crypto hedge fund. Gillespie declined to comment beyond his statement, as “this is an ongoing court case with B2C2.” The company also declined to comment on the reason for his departure.
The case is Nagela v. B2C2, US District Court for the District of New Jersey, 2:23-cv-13982-MCA-CLW.
(Updates with additional comment from intern in paragraph 10.)
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