Anchorage Digital Reduces Workforce by 20% as Crypto Market Faces

It is currently uncertain whether the recent layoffs at Anchorage

Anchorage Digital are connected to the ongoing turbulence in the banking industry of the United States

Anchorage Digital, a crypto bank, has recently announced that it will be laying off 75 employees, which accounts for approximately 20% of its workforce. The company cited regulatory uncertainty in the United States as a factor in its decision. 

In a statement released on March 14, Anchorage explained that the layoffs were part of a strategic realignment to better focus their resources. The company also pointed to broad macroeconomic challenges and crypto market volatility as other factors contributing to its shift in strategy.

Anchorage has stated that it is still confident in the digital asset ecosystem and its capacity to create regulated solutions for digital asset holders notwithstanding the layoffs. The Office of the Comptroller of the Currency granted the company a national trust bank licence in January 2021, making it the first crypto corporation in the United States to do so.

Anchorage acknowledged that market conditions had boosted demand for its product and client assets under custody were at an all-time high. However, the same macroeconomic, market and regulatory dynamics are creating headwinds for their business and the crypto industry.

The layoffs came as three regional banks in the United States collapsed within a span of a week, throwing the financial system into chaos. Anchorage is devoted to offering creative solutions for holders of digital assets despite the difficulties posed by the constantly shifting regulatory framework.

Since March 8, Silicon Valley Bank, Silvergate Bank, and Signature Bank have all failed, leading the Federal Deposit Insurance Corporation to take the unprecedented step of guaranteeing all customer deposits for SVB and Signature, surpassing its standard threshold of $250,000. It remains unclear whether these recent developments contributed to Anchorage's decision to reduce its workforce.

The crypto industry has seen a significant slowdown in layoffs since the beginning of the year. After crypto exchanges Coinbase and Crypto.com cut nearly 3,000 positions in January, February saw a more modest 570 layoffs.