US-based cryptocurrency exchange Kraken has announced significant layoffs, letting go of 15% of its workforce, or roughly 400 employees, as part of a strategic restructuring.
This happened after Arjun Sethi, the co-founder of venture firm Tribe Capital, was appointed co-CEO of Kraken alongside current CEO Dave Ripley. The layoffs were confirmed by a Kraken spokesperson, though details on specific roles affected were not disclosed.
Kraken Announces 15% Layoffs Amid Leadership Change
The move marks a pivotal moment for Kraken. Sethi and Ripley emphasized in a recent blog post that the job cuts are aimed at making the organization “leaner and faster” to position Kraken as a leader in the global cryptocurrency space.
“To continue forging our path ahead and put Kraken in contention to become the largest crypto platform in the world, we need to be leaner and faster,” the executives stated. They noted that the layoffs are part of “organizational discipline” designed to streamline operations by reducing hierarchical layers.
Kraken’s recent history has been marked by several upheavals. In mid-2022, then-CEO and co-founder Jesse Powell engaged in a high-profile internal dispute that some described as a “culture war,” urging employees to align with his political views or leave the company.
Powell ultimately stepped down as CEO following a U.S. Treasury Department investigation into Kraken for allegedly violating U.S. sanctions, a matter the company later settled with the government.
Layoffs in the Crypto Space
This wave of layoffs reflects broader challenges across the cryptocurrency industry. Kraken is not alone in its restructuring efforts; just a day prior, blockchain technology firm ConsenSys, developer of the widely used MetaMask wallet, announced a 20% workforce reduction, impacting 162 employees.
Additionally, dYdX Trading, a decentralized cryptocurrency exchange, also downsized, laying off 35% of its staff. These reductions signal a turbulent period for the industry as companies face shifting regulatory landscapes and ongoing market volatility.
Beyond internal challenges, Kraken has faced increasing scrutiny from U.S. regulators. Last year, the SEC) alleged that Kraken operated as an unregistered broker, dealer, exchange, and clearing agency. In February 2023, Kraken reached a settlement with the SEC over charges related to its staking service.
As regulatory authorities heighten their focus on the cryptocurrency sector, Kraken’s future could hinge on potential policy shifts, particularly following the upcoming U.S. elections.
Adding to the recent uncertainty, reports of Sethi’s likely appointment as co-CEO sparked confusion among employees, according to internal messages viewed by The New York Times.
Some Kraken employees reportedly questioned the firm’s future direction in response to the leadership changes, expressing concerns in the company’s chat rooms as speculation about Sethi’s role circulated.