crypto platform anchorage digital lays off 20% of staff citing market volatility
California-based digital asset platform Anchorage Digital will let go 75 employees, representing roughly 20% of its workforce, citing regulation challenges in the US and little demand for certain types of digital assets, including the Litecoin cryptocurrency and non-fungible tokens (NFT).
The cuts “are in response to an evolving landscape facing the crypto industry at-large, shaped by regulatory uncertainty in the US, broad macroeconomic challenges, and crypto market volatility,” according to a company statement on Tuesday.
In January 2021, Anchorage became the first US-based crypto firm to be granted a national trust bank charter from the Office of the Comptroller of the Currency. Anchorage Digital Bank will not be affected by the recent move, a spokesperson told Blockworks, adding no customer assets have been at risk following the fall of crypto-focused US lenders Signature Bank and Silvergate.
The banking system in the country is currently in a state of disarray. Three regional banks, including the previous two already mentioned and Silicon Valley Bank (SVB) have all gone under since March 8. It’s unclear if such developments contributed to Anchorage’s decision to cut staff.
A number of cryptocurrency companies, such as Coinbase, Crypto.com, Kraken, and Bittrex, have cut scores of jobs in recent months, blaming worsened market sentiments following a series of bankruptcies last year as well as regulatory uncertainties.
Anchorage Digital, which provides digital asset custody services for institutional clients, also cited little demand in NFTs as a key driver for the refocus. According to data from Cryptoslam.io, global NFT trading volume dropped from $4.3 billion in April 2022 to just $1 billion last month.
Even some of the biggest players in the industry are also reconsidering their approach to the NFT market. Facebook-parent Meta Platforms, which announced Tuesday plans to cut 10,000 jobs in its second round of mass layoffs, has decided to wind down NFT investments to focus on other areas for supporting creators on its platforms.