The cryptocurrency exchange aims for a streamlined structure amidst industry-wide layoffs and legal challenges.
Restructuring and Layoffs at Kraken
Kraken announced significant layoffs impacting 15% of its workforce, totaling around 400 positions. This decision follows recent structural changes within the company. According to the New York Times, this move coincides with Arjun Sethi taking on the role of co-CEO alongside Dave Ripley.
The Need for Organizational Discipline
In a blog post, Kraken emphasized the need for “organizational discipline.” The company stated its intention to streamline management structures, which expanded as its revenue exceeded $1 billion. Although the company did not specify which roles were affected, sources suggest that senior management and C-suite positions bore the brunt of the layoffs.
Support for Affected Employees
“Making organizational changes is never easy, and we understand their profound impact on people’s lives,” Kraken stated in the blog. The exchange expressed gratitude to those impacted and assured them of support during this transition period.
Wider Trends in the Crypto Industry
These layoffs at Kraken mirror a broader trend in the cryptocurrency sector, where multiple companies are reducing their workforce. For instance, decentralized derivatives platform dYdX recently announced a 35% reduction in its core team. Additionally, blockchain firm Consensys, known for developing MetaMask, confirmed a 20% workforce reduction, impacting over 160 positions.
Economic Pressures and Legal Challenges
Consensys cited economic pressures and regulatory challenges from the SEC as reasons for its layoffs. In a similar vein, Kraken is also navigating a legal dispute with the SEC. The agency accuses Kraken of offering unregistered securities through certain digital assets.
Future Developments for Kraken
Kraken’s restructuring efforts aim to position the exchange for new developments set to launch in 2025. The company plans to unveil its proprietary blockchain, Ink, which will facilitate decentralized trading, borrowing, and lending without intermediaries.
Regulatory Dispute with the SEC
Kraken continues to engage in a legal battle with the SEC. The agency claims that certain tokens offered by Kraken, including ADA, ALGO, and SOL, qualify as unregistered securities. However, Kraken contends that these tokens do not meet the U.S. definition of securities. The company has criticized the SEC’s approach as overreaching and lacking clarity.
Preparing for a New Era
As Kraken navigates these challenges, its restructuring aims to create a more efficient organization ready to tackle future developments. The layoffs reflect not only internal adjustments but also the broader challenges facing the cryptocurrency industry as it matures.
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