Crypto Platform Anchorage Digital Lays Off 20% of Employees
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The first federally chartered crypto platform announced that it would lay off 20% of its employees.
Anchorage Digital said on March 14 that it would reduce its workforce by 75 as part of a “strategic realignment.”
Tuesday’s announcement comes on the heels of the collapse of three of the largest crypto banks in the United States. Last week, Silvergate announced “an orderly liquidation of banking operations and a voluntary liquidation of the bank”.
Then California regulators shut down Silicon Valley Bank after a bank run, and New York’s Department of Financial Services did the same to Signature Bank over the weekend. Both were transferred to the Federal Deposit Insurance Corp, with the government and even President Joe Biden promising that customers would not lose any assets, even though bank investors would be wiped out.
Anchorage said its “long-term vision” to “build an enduring financial institution for the digital economy … requires us to adapt to changing economic, market and regulatory conditions.”
While there is an “increased demand” for the products and services it provides for digital assets, these “macroeconomic, market and regulatory dynamics are creating headwinds for our business and the crypto industry.”
Anchorage won conditional approval of the South Dakota trust charter to become Anchorage Digital Bank, National Association, in January 2021.
However, the road has not been entirely smooth. First, it still has a conditional charter.
Last April, the Office of the Comptroller of the Currency (OCC), the federal banking regulator that issues trust, charter and banking licenses, issued a consent decree against Anchorage Digital Bank.
The reason was its “failure to adopt and implement a compliance program that adequately covers the required elements of the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) program elements.”
That came under the regime of the current Comptroller of the Currency, Michael Hsu, who rolled back much of the pro-crypto policy the OCC created under his predecessor, Brian Brooks. He joined the OCC from his previous position as Coinbase’s general counsel.
The OCC had been aggressively pushing mainstream banks to avoid entanglements with crypto under Hsu long before the collapse of the three banks this past week.