Kraken, the third-largest cryptocurrency exchange by volume, said in a blog post on Wednesday that it will cut 30% of its workforce. The company, which competes with giants such as Coinbase and Binance, cited "economic and geopolitical factors" that led to the cuts.
The impact of the economy on digital asset companies
“This has resulted in a significant drop in trading volumes and a drop in subscribers to the service,” Jesse Powell, co-founder of Kraken, said in a statement. We have responded by slowing down recruitment efforts and avoiding large marketing commitments. Unfortunately, the negative effects on financial markets continued and we have exhausted the preferred options to bring costs in line with demand.
Employees were given 16 weeks of pay, an extension of benefits such as health care and counseling services, along with additional time to exercise vested stock options, and immigration support for employees who were in a different country on company-sponsored visas.
Powell added, “I am confident that the steps we take today will ensure that we can continue to deliver on our mission, which the world needs now more than ever. I am still very bullish on cryptocurrency and the Kraken.”
Increased bankruptcy filings and layoffs
The announcement comes at a precarious time for the industry, with bankruptcy filings, liquidity issues and layoffs on the rise. Major cryptocurrency lender Block V filed for Chapter 11 bankruptcy protection on Monday, after heavily undermining the now-bankrupt FTX