Cryptocurrency bank Anchorage Digital announced it would let go of 75 employees, representing 20% of the workforce. According to the official statement, the most recent layoffs are “a strategic realignment to better focus our resources.” The firm has cited regulatory uncertainty in the U.S. as a reason for its decision. Moreover, the firm said “broad macroeconomic challenges and crypto market volatility” further added to its decision.
The cryptocurrency bank stated that market conditions led to increased demand for its products. Moreover, client assets in custody are at an all-time high. However, the same market, macroeconomic, and regulatory dynamics are now creating barriers for the business. Nonetheless, the bank has expressed sustained faith in developing regulated solutions for digital asset holders and the market for digital assets.
In January 2021, Anchorage Digital became the first American cryptocurrency company to receive a national trust bank charter from the Office of the Comptroller of the Currency.
Anchorage Digital’s layoffs follow closely behind a banking crisis in the U.S. In just one week, three regional banks, Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank, went underwater. As a result, the Federal Deposit Insurance Corporation (FDIC) has taken the extraordinary step of guaranteeing all customer deposits above the usual $250,000 level that it normally does for SVB and Signature entities.
However, there is no confirmation if the collapse of the three banks has anything to do with Anchorage Digital’s decision.
Cryptocurrency firms layoffs to continue?
The contagion impact from the events of 2022 continues to haunt the digital asset business. Even if most projects have increased in value since the beginning of the year, cryptocurrency businesses continue to struggle to cover their operating expenses. The result has been continued layoffs.
On Feb. 21, almost 100 people from various teams were let go by Polygon. That is equivalent to 20% of the workforce of the organization. Immutable, the largest cryptocurrency gaming business in Australia, said on Feb. 22 that it would be letting go of approximately 11% of its workforce.
However, with the markets slowly regaining pace, cryptocurrency layoffs could slow down over the next few months.