Crypto Exchange Kraken Cuts Workforce; U.S. Pushing More Industry Regulation

The brutal month for crypto exchanges continues.

On Wednesday, San Francisco-based Kraken announced it will cut approximately 1,100 people, or 30%, of its workforce “in order to adapt to current market conditions.”

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In a blog, co-founder and CEO Jesse Powell wrote: “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.”

The reduction will take Kraken’s employment count to where it was a year ago, Powell said.

The layoffs are just the latest bad news for an industry still trying to come to terms with the FTX implosion, which has crippled many firms that had any exposure to what was at one time the fourth largest exchange by volume.

U.S. government eyes regulation

The FTX collapse and crypto’s deepening winter has not escaped the eye of those wanting more regulations in the industry.

On Wednesday, U.S. Treasury Secretary Janet Yellen said she remained skeptical about the industry and that FTX’s implosion and other turmoil in the crypto market showed it needed adequate regulation.

The comments come one day before the U.S. Senate Agriculture Committee will hold the first hearing to examine FTX’s stunning collapse.