Last Updated on 3 months by John Piper
Anchorage Digital, a cryptocurrency bank, recently announced plans for the layoff of 75 employees. This is a significant 20% reduction in its workforce. This was due to regulatory uncertainty in the United States. It was also due to a need to realign strategic resources.
As other factors that contributed to the company’s shift in strategy, they pointed out macroeconomic problems and volatility in crypto markets.
After a lengthy review, the decision to fire staff was made. Although the decision was made in response to the US banking crisis, it wasn’t taken by it. Anchorage reiterated its confidence in the digital asset landscape, and its ability to create regulated solutions that are suitable for digital asset holders, despite regulatory challenges and market conditions. Anchorage says:
“As part this commitment, we today announce that we will initiate a strategic realignment in order to better concentrate our resources. This process involves the hard but necessary decision of reducing our headcount. These same macroeconomic, regulatory, and market dynamics create headwinds in our business and in the crypto industry em>
Bank trials, regulatory concerns, and cryptocurrency troubles
These layoffs occur at a time when cryptocurrency is experiencing increasing headwinds. The ongoing US banking crisis has caused the collapse of Crypto-friendly Silicon Valley Bank and Silvergate Bank. Signature Bank was also shut down on March 8. This has prompted the Federal Deposit Insurance Corporation (FDIC) to guarantee all deposits to SVB and Signature. Guarantees are available up to $250,000.
In the digital currency and blockchain industry, layoffs are more frequent. Due to uncertainty in regulations and lack of clear guidelines, cryptocurrency companies are having difficulty accessing banks. Some firms look for alternative solutions such as opening their own banks, or looking for smaller, more specialist banks. Others may need to reduce their workforce, or shut down completely.
Crypto firms are under significant pressure from the US regulatory environment. The changing regulatory environment will require that crypto companies and blockchain businesses adapt. It remains to be seen how this will happen.
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