Anchorage Digital has decided to trim its staff, adding another incident to the streak of fateful events that have shaken up crypto banks in the US. Citing regulatory uncertainty, the San Francisco-based bank has laid off 20 percent of its workforce, leaving 75 employees jobless. The decision was sealed on March 14 following the dramatic shutdowns of three crypto-friendly lenders — Silvergate Bank, Signature Bank, and the Silicon Valley Bank — last week.
The lender is trying to face the oncoming macroeconomic challenges fuelled by crypto volatility with a strategic approach that revolves around precisely calculating and minimising company spending.
“We will be initiating a strategic realignment to better focus our resources. That process includes the difficult but necessary decision to reduce our headcount. The strategic adjustments have been developed over the course of a long review process and in response to an evolving landscape facing the crypto industry shaped by regulatory uncertainty in the US, broad macroeconomic challenges, and crypto market volatility,” the company wrote in its blog post.
US authorities directed Signature Bank and the Silicon Valley Bank to shut operations between March 10 and March 12. This decision was aimed at keeping the US economy stabilised after another crypto-friendly bank Silvergate declared bankruptcy, failing to overcome the FTX collapse aftermath.
Within one week, the US witnessed three large crypto banks crumble under market pressure. This has left a large chunk of assets owned by crypto players like Coinbase and Paxos, among others, unbanked.
Anchorage Digital’s move to slash its workforce to keep its business afloat, hence, does not seem surprising.
“Those combined conditions have resulted in heightened demand for the safe and secure digital asset products and services, which we provide. In fact, our client assets under custody are at an all-time high. However, these same macroeconomic, market, and regulatory dynamics are creating headwinds for our business and the crypto industry,” Anchorage Digital added.
In January this year, the crypto industry witnessed a high rate of job cuts. Around 2,850 people working in the crypto sector lost their jobs in the month, figures compiled by a CoinTelegraph study recently claimed.
On the other hand, an estimated number of 570 professionals engaged with the digital assets sector lost their jobs in February — marking a notable decline in job cuts.