Anchorage Digital, A Cryptocurrency Company, Reduces Employees By 20% Due To Uncertainty In US Regulation

In response to the present decline in the cryptocurrency market and regulatory uncertainties in the United States, San Francisco-based Anchorage Digital, a bank that deals in cryptocurrencies, is drastically reducing its employees.

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Trade Algo reports that the company is letting go of 75 workers, or about 20% of its employment.

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Anchorage Digital highlighted a number of concerns in a statement, including the unstable condition of the cryptocurrency market, more general socioeconomic difficulties, and the murky regulatory environment in the US.

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The business stated,

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For us, it means firmly focusing on our reputation as an unquestionably qualified custodian, among many other secure and regulated methods for institutions to engage in the technology platform ecosystem. "The need for stronger crypto infrastructure is become even evident," the company claims.

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Despite being a cryptocurrency bank with a federal charter, Anchorage has had problems with US regulators.

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The Office of the Comptroller of the Currency contended that the bank's compliance program lacked personnel and internal procedures, particularly money-laundering checks, to verify customers in 2021 less than a year earlier, in April 2022. 

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As a result, it was said, the bank neglected to implement crucial measures to stop money laundering and disclose suspicious transactions.

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Anchorage Digital, however, revealed in June 2017 that it has connected with Binance.US and secured support from cryptocurrency exchanges CoinList, Blockchain.com, Strix Leviathan, and Wintermute in its quest to establish a custody exchange network.

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Misery enjoys working with cryptocurrency companies

The financial services firm is only one of many organizations in the cryptocurrency sector that are laying off employees and giving the same justifications. 

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For instance, in an effort to "adjust to current market conditions," cryptocurrency exchange Kraken stated in November of last year that it would be firing 1,100 employees, or 30% of its workforce.

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ByBit said in December that it would reduce its employment by 30% as a result of weak market conditions.

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However, according to Trade Algo, the sector has already lost almost 2,000 jobs this year.

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In order to pay for $8.1 billion in customer withdrawals in January, cryptocurrency bank Silvergate reduced its workforce by 40% and sold properties at a loss. In the midst of the bear market, Luno, which is controlled by the crypto giant Digital Currency Group, reduced its global workforce by 35%, and Gemini fired 10% of its employees.

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Major cryptocurrency exchange Coinbase reported its third a round layoffs within the same month, resulting in a headcount reduction of 950 people, or 20% of its staff.

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Moreover, Crypto.com announced that it would lay off 20% of its workforce, citing macroeconomic challenges and the demise of the FTX exchange as justifications.

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And these are far from the only businesses in the sector that have reduced their workforce.

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Moreover, Anchorage Bank is not the only institution having issues. Early in February, Silvergate shares dropped as news broke that US authorities were looking into the bank's dealings with the now-defunct FTX and its parent organization Alameda Research. 

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Soon after, Silvergate declared that it would be assessing its capacity to continue operating since it was unable to submit its financial statements for the year to the US Securities and Exchange Commission (SEC) on time.

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Meanwhile, just this past Sunday, big crypto-friendly Signature Bank was shut down by regulators, two days after Silicon Valley Bank had been shut down due to a catastrophic collapse involving billions in deposits.

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The US regulators asserted in a joint statement that all bank depositors would be made whole and that taxpayers would not bear any losses.

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Kraken, a cryptocurrency exchange, announced that it was entering the banking sector with the launch of Kraken Bank as all of this was happening. The exchange stated last week that it was creating a better type of cryptocurrency and Bitcoin bank for its customers.

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Using the Wyoming Special Purpose Depository Institution (SPDI) architecture, Kraken Bank is made for cryptocurrency.

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