Kraken, the third largest crypto exchange according to Coinmarketcap, has decided to reduce its workforce by 1100 employees representing approximately 30% of its headcount. The reduction in employees was revealed in a blog post today by Kraken CEO and co-founder Jesse Powell.
Powell said the move was due to the ongoing crypto winter that impacted the digital asset markets.
“Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client sign-ups. We responded by slowing hiring efforts and avoiding large marketing commitments. Unfortunately, negative influences on the financial markets have continued, and we have exhausted preferable options for bringing costs in line with demand,” said Powell.
Impacted employees will receive substantial severance benefits including: 16 weeks of base pay, benefits including four months of healthcare coverage, career support, visa and immigration support, and an extended window to exercise options.
Meanwhile, the crypto winter is looking more like a crypto ice age. Not only have market conditions – like high inflation, rising interest rates and geopolitical risk, hampered economic activity but questionable operations like FTX also increased concern about contagion risk.
In 2021, aggregate crypto markets topped $3 trillion in value. Today, that amount is more like $820 million, representing a profound loss in value.
While Powell said he remains extremely bullish on crypto and Kraken, further regulation is on the way, and its impact on crypto and the platforms that provide markets to trade these digital assets is an ongoing question.