- Kraken is laying off 1,100 of its employees, the company said in a blog post Wednesday.
- The news comes at a difficult time for the industry as bankruptcies rise and crypto prices languish.
- A Kraken spokesperson told Insider that the company had “no material exposure” to FTX.
Kraken, the third-largest cryptocurrency exchange by volume, said in a blog post on Wednesday that it would cut 30% of its workforce. The company, which competes with giants like Coinbase and Binance, cited “macroeconomic and geopolitical factors” that led to the cuts.
“This resulted in significantly lower trading volumes and fewer customer signups. We responded by slowing down recruiting efforts and avoiding major marketing commitments,” Jesse Powell, Kraken’s co-founder, said in a statement. “Unfortunately, negative impacts on financial markets continue and we have exhausted preferred options to bring costs in line with demand.”
Employees were offered 16 weeks of wages, an expansion of benefits such as healthcare and consulting services, along with additional time to exercise vested stock options, and immigration support for employees who were in another country on a company-sponsored visa.
“I am confident that the steps we take today will ensure that we continue to deliver on our mission, which the world needs now more than ever,” added Powell. “I remain extremely bullish on crypto and Kraken.”
The announcement comes at a precarious time for the industry, with increasing bankruptcy filings, liquidity problems and layoffs. Major crypto lender BlockFi filed for Chapter 11 bankruptcy protection on Monday, after significant exposure to the now-bankrupt FTX.
FTX, the $32 billion crypto empire founded by Sam Bankman-Fried, shut down after Coindesk reported that its own FTT token made up an unusually large portion of sister trading firm Alameda Research’s balance sheet. Soon after, there was a run on the token, which led to a liquidity crisis on the exchange and eventually led to its bankruptcy on November 11. Numerous companies have reported exposure and subsequent losses from the implosion, causing widespread contamination throughout the industry.
When asked if FTX’s demise played a role in Kraken’s layoffs, a company spokesperson told Insider, “No. Kraken was already reviewing its business and staffing needs when news of FTX’s bankruptcy broke. was made public. Kraken had no material exposure to FTX.”