Crypto Bank Anchorage Cuts 20% of Workforce
Zach Anderson Mar 16, 2023 09:38
Anchorage Digital has laid off 75 employees, citing regulatory uncertainty and market volatility. The crypto bank expressed confidence in the digital asset landscape but acknowledged headwinds for its business and the crypto industry.
Anchorage Digital, a crypto bank that received a national trust bank charter from the Office of the Comptroller of the Currency in January 2021, has announced that it will lay off 75 employees, or approximately 20% of its workforce. The company cited regulatory uncertainty in the United States, as well as macroeconomic challenges and crypto market volatility, as reasons for the layoffs. Despite these challenges, Anchorage expressed continued confidence in the digital asset landscape and its ability to build regulated solutions for digital asset holders.
Anchorage's decision to cut staff comes at a time when the U.S. banking system is facing significant challenges. Three regional banks, Silicon Valley Bank, Silvergate Bank, and Signature Bank, have gone under since March 8, prompting the Federal Deposit Insurance Corporation to guarantee all customer deposits for SVB and Signature, despite its standard threshold for guarantees being $250,000. It is unclear if these developments contributed to Anchorage's decision to lay off staff.
The crypto industry has seen a slowdown in layoffs since the beginning of the year. In January, crypto firms such as Coinbase and Crypto.com cut nearly 3,000 positions, while February saw a more muted 570 layoffs. Despite the challenges facing the industry, many firms remain optimistic about the future of digital assets and blockchain technology.
Anchorage Digital was founded in 2017 by Diogo Monica and Nathan McCauley. The company provides custody services for institutional investors, allowing them to securely store their digital assets. In addition to its national trust bank charter, Anchorage has also received approval from the South Dakota Division of Banking to create a digital asset bank. The company's investors include Blockchain Capital, Lux Capital, and Visa. Anchorage has raised over $137 million in funding to date.
While the layoffs at Anchorage are unfortunate for the affected employees, they may be necessary for the company to weather the current regulatory and market challenges. As the crypto industry continues to mature and attract more institutional investors, firms like Anchorage will play a critical role in providing secure and regulated custody services for digital assets.
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