Kraken, one of the largest cryptocurrency exchanges in the world, is cutting off around 30 percent of its workforce, or 1,100 workers, “in order to adapt to current market conditions,” according to co-founder and CEO Jesse Powell on Wednesday.
Kraken has stated that it will provide 16 weeks of compensation to affected employees as compensation and will extend the exercise window for those workers.
In a blog post, Powell explained that “macroeconomic and geopolitical factors” had caused growth to stall, lowering consumer demand, trading volumes, and new sign-ups.
As Powell put it, “We had to grow fast, more than tripling our workforce in order to provide those clients with the quality and service they expect of us.”
“This reduction takes our team size back to where it was only 12 months ago.”
After the collapse of FTX, cryptocurrency exchanges have been hit hard by customer withdrawals and increased regulatory scrutiny. On November 28, Sam Bankman-crypto Fried’s empire filed for bankruptcy, and as part of the process of restructuring, the company let go of several hundred employees.
In November, approximately one-fifth of the workforce at Barry Silbert’s Digital Currency Group was let go. In October, Crypto.com terminated the employment of 2,000 of its staff members.
Kraken CEO On Proof-of-Reserves
The CEO of Kraken has recently spoken out against the industry practice of exchanges proactively supplying wallet addresses to verify the presence of customers’ assets, calling it “pointless” due to the fact that exchanges do not integrate liabilities.
Recent occurrences in the cryptocurrency industry have shown how crucial proof of reserves is in preventing the theft of user cash.
Powell agrees that Kraken’s proof of reserve does allow for the verification of the company’s assets vs its obligations, but he continues to criticize Kraken’s rivals for failing to include accounts with negative balances.
Kraken has also recently frozen FTX and Alameda accounts.