Anchorage Digital cuts 20% of its workforce due to poor NFT demand, although the bank unit is unaffected.

Layoffs

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Anchorage Digital, a digital asset platform based in California, has announced that it will lay off 20% of its workforce, equivalent to around 75 employees. The company cites regulatory uncertainty in the US, broad macroeconomic challenges, and crypto market volatility as reasons for the restructuring. The layoffs come after a review of operations that lasted several months, during which the company identified the need to account for these challenges. Anchorage Digital Bank, the company’s digital asset bank subsidiary, which is regulated under the Office of the Comptroller of the Currency, will not be affected by the layoffs. A spokesperson for the company has also clarified that no customer assets were at risk from the recent closures of crypto-focused US lenders Silvergate and Signature Bank.

Anchorage Digital provides digital asset custody services for institutional clients and offers crypto lending, trading, financing, and staking services. However, the company has seen little demand for certain types of digital assets, including non-fungible tokens (NFTs) and the Litecoin cryptocurrency. The declining interest in NFTs can be seen globally, with NFT trading volume falling from $4.3 billion in April 2022 to around $1 billion last month, according to data from Cryptoslam.io.

Several cryptocurrency companies, such as Kraken, Coinbase, Crypto.com, and Bittrex, have also laid off staff in recent months, citing regulatory uncertainties and the worsened market sentiment following a series of crypto bankruptcies and failures last year. Meta Platforms, the parent company of Facebook and Instagram, has announced its decision to wind down NFT investments to focus on other areas for supporting creators on its platforms. Mark Zuckerberg, the CEO of Meta, also announced the layoff of 10,000 employees and the closure of 5,000 open roles on Tuesday.

Despite the layoffs, Anchorage Digital’s digital asset bank subsidiary will continue its operations, and the company’s valuation stands at $3 billion, as of March 2023, according to Forbes. The company plans to restructure and adapt to the evolving regulatory and market environment, positioning itself for future growth in the digital asset industry.

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