Kraken Crypto Exchange To Lay Off 1,000 Employees During Crypto Winter
Cryptocurrency exchange Kraken said Wednesday it will cut its global workforce by 30 percent, or about 1,100 employees, citing difficult market conditions that have crippled demand for the digital asset this year. High interest rates and fears of a recession have weighed on cryptocurrencies as investors shy away from riskier assets, while recent bankruptcies add to the uncertainty.
“Since the beginning of this year, things that affect the country’s economy and politics have weighed on the financial markets,” said the company.
Kraken said it had seen a drop in trading volume and fewer customer sign-ups, adding that the layoffs would take the total number where it was 12 months ago.
Earlier this month, crypto exchange Coinbase cut jobs in its recruiting and institutional teams.
Kraken, which previously cut hiring and cut advertising spending, said it was forced to cut jobs as it sought other ways to bring costs in line with current demand.
Meanwhile, crypto exchange FTX, the biggest market casualty of the year, continues to surge across the industry, as BlockFi filed for bankruptcy earlier this week.
The decline in the price of the largest cryptocurrency, Bitcoin, has dragged down for almost two years.
Since then global regulators have been around many crypto firms seeking to impose stricter regulations to regulate the largely unregulated sector.
On Monday, the US Treasury Department’s Office of Foreign Assets Control said that Kraken had agreed to pay a fine to settle a public debt related to an apparent violation of sanctions on Iran.
As part of the settlement with OFAC, Kraken will pay approximately $362,000 (approximately Rs. 3 crore), and “invest another $100,000 (approximately Rs. 81,18,000) in certain sanctions compliance controls.”
According to OFAC’s statement, Kraken’s platform processed 826 transactions for users in Iran between approximately October 2015 and June 2019.
At the time, Kraken maintained controls intended to prevent users from initially opening an account while in a sanctioned area, but did not implement geolocation-based IP address blocking across its entire site, the statement added.
In October, the Finance Ministry also fined crypto exchange Bittrex Inc $29 million (about Rs. 235 crore) in fines for “flagrant violations” of sanctions in certain countries and anti-money laundering laws.
© Thomson Reuters 2022