Rather than being unleashed, this Kraken, has relinquished 30% of its staff. Jesse Powell, CEO of the world’s third-largest crypto exchange, broke the news today. 1,100 people will be laid off to “adapt to current market conditions.”
History of Kraken Crypto-Exchange
Headquarter in San Francisco, CA, Kraken was founded in 2011. A crypto exchange and bank, the platform touted itself as “an exchange for everyone.” This was in part to the emphasis on the crytpocurrency company’s simplicity and educational aspect. A person created an account, connected a funding method, then could buy and sell over 185 digital assets.
Why Is Kraken Failing?
Powell detailed in a blog post several factors that led to this reduction. He cited decreased customer demand and reduced trading volumes as root causes. This layoff returns the Kraken team to the size it was just one year ago.
Before the onset of the current “crypto winter,” Kraken grew rapidly. The company tripled its workforce to meet client demands at the time. Powell wrote that halted growth was due to “macroeconomic and geopolitical factors.”
More FTX Fallout
The factors Powell detailed could be the results of the recent FTX implosion. This collapse sent shock-waves through an already volatile market and wiped out fortunes. It has also diminished customer confidence in the cryptoverse.
FTX filed for bankruptcy on November 11. On Monday, November 28, the exchange BlockFi filed for bankruptcy. $355 million of the platform’s assets are tied to FTX. The following day, November 29, the Bitfront exchange shut down.
Simply put, the downfall of FTX has set off an undeniable domino effect. This could be the macroeconomic factor Jesse Powell was referring to.
Pirates, Not Professionals
Powell himself has described the Kraken culture to be “more pirates than professionals. He has formerly boasted about firing “woke” employees to deliver a “crypto-first culture.” This approach has generated some controversy. Powell has also openly employees who disagree with the mantra they are free to leave.
News of the layoffs comes on the heels of another buzz-worthy development at Kraken. On Monday, the Treasury Department announced it had come to a $362,000 settlement with the platform. This occurred after the office found out Kraken had been offering its services in Iran. This activity violates United States sanctions against the nation.
A Reversal of Plans
This layoff is a dramatic reversal of the plans Kraken had in June. As fortunes were wiped out in the second quarter crash, Powell looked in the opposite direction. The company announced a global push to fill 500 positions that would “flood the market with experienced employees.”
While Kraken did not intend to enact any layoffs, these hiring plans have been thwarted. Then again, no one predicted the epic collapse of FTX and its ripple effect on the entire industry.
