Morph Exposed Internal Power Struggles and Significant Expenditures, CEO Sparks Controversy by Posting Foot Photos on X

Bitget Exchange’s Morph L2 Team Faces Internal Strife and Ambiguous Fund Usage

The Morph L2 team, incubated by the Bitget exchange, is reportedly embroiled in internal conflicts and issues regarding unclear fund usage. Sources told Blockworks that Morph has fallen into difficulties due to poor internal operations. Since Morph secured $20 million in seed funding last March, its prospects initially seemed bright; however, issues such as poor internal communication, massive expenditures, the CEO’s limited understanding of blockchain, and lack of interaction with the company team have led to the resignation or dismissal of co-founders and delays in work. Current nominal CEO Cecilia Hsueh’s recent posts of her feet on X have also sparked discussions. Blockworks interviewed over a dozen current and former employees, who anonymously shared the problems arising within Morph, incubated by Bitget.

What is Morph?

Morph L2, launched after being incubated by Bitget, which ranks tenth in spot trading volume, secured $20 million in seed funding, becoming a hot topic and a rising star. Bitget is not the first exchange to launch its own blockchain; Binance launched the BNB chain in 2020, Coinbase went live with the Ethereum Layer-2 Base chain in 2023, and exchanges like Kraken, OKX, and Gate.io are also building their own blockchains. Launching their own blockchain can yield substantial profits; according to Blockworks Research, Base generated $76 million in profits in 2024.

While Bitget is not accessible in the United States, it has achieved excellent performance in Africa and Asia, with significant growth, making the Morph L2 team, incubated by Bitget, a focal point.

Dispute Over Morph’s Founders

Morph did not follow the traditional startup model of pairing two founders with shared visions; instead, it matched two previously unacquainted co-founders together. Morph’s co-founders Azeem Khan and Cecilia Hsueh reportedly have almost zero interaction and are unfamiliar with each other, according to employees. The team behind Morph paired Azeem Khan, who resides in the U.S. and previously served as Gitcoin’s Impact Director, with Cecilia Hsueh, who is stationed in Singapore (according to her LinkedIn profile). Cecilia Hsueh formerly served as the Chief Marketing Officer of cryptocurrency exchange Phemex and briefly acted as CEO. She was appointed as Morph’s CEO, while Azeem Khan held the position of COO until he left Morph in March this year.

Morph appeared to have a bright future, successfully securing funding. Morph raised $20 million in seed funding from U.S.-based Dragonfly, with other investors including Pantera, MEXC Group, Bitget’s venture capital arm Foresight Ventures, and Spartan Group. However, internal disputes regarding poor communication, lack of decision-making authority, and unclear usage of company funds and marketing budgets have now come to light.

Morph’s Valuation Reaches $125 Million

Morph’s mainnet went live in late October last year. According to Morph’s block explorer, on May 12, L2 recorded approximately 16,000 transactions. The launch of L2 was only half of the success; former employees recalled that another goal was to launch a token, which has yet to be realized. Last month, Morph claimed that NFT creators would have a fully diluted valuation (FDV) of $500 million, solidifying their position within the ecosystem, and could unlock 50% of the tokens during the Token Generation Event (TGE). Insiders revealed that following the seed round financing, Morph’s valuation reached $125 million by March 2024.

Who is in Charge of Morph?

Almost everyone interviewed by Blockworks stated that current CEO Cecilia Hsueh has limited technical understanding of blockchain. While senior executives do not necessarily need to come from the cryptocurrency industry, sources claim that Cecilia Hsueh is completely disconnected from blockchain and has shown no interest in learning about it, raising concerns over Morph’s lack of clear management direction. Sources allege that Cecilia Hsueh is focused on enhancing her online influence. Three former employees shared their experiences of being asked to participate in her social media posts, with some adding that Cecilia Hsueh prioritizes posting about Morph on her personal account rather than the official account. On one occasion, Hsueh posted a photo of her feet on X, claiming to be “down to earth.” It remains unclear how much power Cecilia Hsueh holds, but one former employee described her as Teflon-like.

Although she is listed as CEO in company documents, an internal organizational chart shared with Blockworks shows the name of Foresight Ventures co-founder Forest Bai next to hers. It appears that many decision-making powers are held by Forest Bai, a co-founder and partner at Foresight Ventures (Bitget’s venture arm and Morph’s investor), as well as a figure at The Block. Multiple sources confirmed that Bai acts like a “shadow CEO,” overseeing expenditures and company strategies. Three insiders told Blockworks that Cecilia Hsueh remains CEO, although her power within the company has reportedly diminished in recent months.

Has Morph Spent Hundreds of Thousands on Entertainment Events?

Sources informed Blockworks that Morph has spent considerable funds on entertainment events, including payment for the South Korean pop group tripleS, covering travel and accommodation costs. Lu.ma, a popular website used by many projects to plan post-event activities, featured an invitation to a special performance by tripleS last year, which was hosted by Zircuit, Bitget, Morph, Foresight Ventures, and Quantstamp.

It is reported that Morph has also spent hundreds of thousands on cryptocurrency conference events. Sources noted that at the Token 2049 event held in Singapore, Morph organized a full-day side event at the Singapore ArtScience Museum. Invitations from Lu.ma indicated attendance by figures such as Vitalik Buterin, Avara’s Stani Kulechov, and Aptos’s Mo Shaikh, with popular South Korean DJ SODA headlining the party. Another insider stated that the spending on large events is disproportionate to the investment returns.

Are Technology Development Costs Excessive?

Multiple sources revealed that Morph had paid over $200,000 to a development team to create a fork of Uniswap v2. Since Uniswap’s code is open-source, a former employee believes that the project overpaid for the DEX, which later became known as BulbaSwap. According to DeFiLlama data, BulbaSwap currently has a total locked value of approximately $93 million, making it the 200th largest DEX by this metric.

Morph is burning cash rapidly, yet a new round of financing has yet to materialize. CEO Cecilia Hsueh stated that she is seeking the next round of funding, noting that operational costs are extremely high. Cecilia Hsueh did not respond to Blockworks’ request for comment on the article.

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