Anchorage Digital Slashes 75 Roles Amid Crypto Volatility
Anchorage Digital, the California-based digital asset platform, announced a significant reduction in its workforce on March 14, 2023, cutting 75 employees, or 20% of its total staff. This strategic realignment by the crypto custodian reflects persistent regulatory uncertainty in the U.S., broader macroeconomic challenges, and sustained volatility within the cryptocurrency market.
The decision followed a multi-month operational review, highlighting particularly low institutional demand for certain digital assets, including non-fungible tokens (NFTs) and Litecoin. While these cuts impacted the wider company, the federally chartered Anchorage Digital Bank N.A., a pioneering entity in the sector, remained unaffected, underscoring its distinct operational stability.
Roles amid crypto volatility and regulatory climate
The challenging regulatory environment in the U.S. proved to be a critical factor behind Anchorage Digital’s decision to scale back. Uncertain guidelines and a perceived anti-crypto stance from Washington have created a difficult operating landscape for many digital asset firms.
Nathan McCauley, Co-founder and CEO of Anchorage Digital Bank, testified before the Senate Banking Committee, revealing that the company lost its commercial bank partner in June 2023. This “devastating” event, which he directly linked to the Biden Administration’s anti-crypto policies, contributed significantly to the need for workforce adjustments.
McCauley emphasized that “debanking” — the denial of banking services to crypto firms — extends beyond mere inconvenience. He framed it as a threat to “American values” of fair financial access and innovation, arguing it undermines the country’s economic competitiveness in a burgeoning sector. This situation forces firms like Anchorage to rethink their operational footprint, a factor influencing broader crypto market dynamics.
Broader Market Turbulence and Shifting Demand
Anchorage Digital’s layoffs unfolded during a prolonged period of downturn, often dubbed the “crypto winter.” This market contraction saw major cryptocurrencies like Bitcoin and Ethereum plummet in value throughout 2022 and early 2023, while high-profile collapses such as FTX further eroded investor confidence.
A spokesperson for Anchorage Digital confirmed that low institutional demand for certain digital assets also played a role in the strategic shift. The company plans to reduce its focus on areas like NFTs, despite a recent feature release, as global NFT trading volume fell sharply from $4.3 billion in April 2022 to approximately $1 billion by February 2023.
This market sentiment has ripple effects across the entire industry. Many other crypto companies, including major players like Coinbase and Kraken, implemented substantial layoffs during this period, reflecting a sector-wide response to diminished activity and investor caution. These cuts often signify a strategic pivot towards core competencies and more robust, regulated offerings.
Strategic Realignment and Unaffected Banking Operations
Anchorage Digital stated its “strategic realignment” aims to sharpen its focus on its role as a qualified custodian. The company is committed to providing safe and regulated infrastructure for institutions looking to engage with digital assets, reinforcing its position in a critical part of the crypto ecosystem.
Crucially, Anchorage Digital Bank N.A., the company’s banking subsidiary, was not impacted by these layoffs. This entity, which received its federal charter from the Office of the Comptroller of the Currency (OCC) in 2021, operates under stringent regulatory oversight, providing a more stable foundation.
The bank currently reports all-time-high assets under custody, with demand for regulated crypto banking services expected to grow. This growth is particularly anticipated in light of proposed regulations from the U.S. Securities and Exchange Commission, which could further solidify the need for compliant institutional solutions.
In April 2022, the OCC issued a consent decree requiring Anchorage Digital Bank to strengthen its anti-money laundering (AML) program and hire a Bank Secrecy Act officer. In response, Anchorage Digital announced eight executive appointments in January 2023, demonstrating its commitment to compliance and robust internal controls.
Anchorage Digital’s Evolving Position
Despite the recent workforce reduction, Anchorage Digital maintains a significant valuation. It stood at US$3 billion as of March 2023 and rose to $4.2 billion after Tether’s $100 million investment in February 2026. The firm secured $350 million in its Series D funding round in December 2021, led by KKR, with notable investors including Andreessen Horowitz, GIC, Goldman Sachs, and Visa.
Co-founded in 2017 by Diogo Mónica and Nathan McCauley, Anchorage Digital has been a pioneer in institutional crypto services. McCauley, who was ranked #5 on American Banker’s Most Innovative People in Finance list, has been vocal about the systemic challenges facing the industry.
The company’s experience, including being rejected by over 40 banks when seeking basic banking services, underscores a wider issue within the financial sector. This widespread reluctance from traditional banks contributes to the difficulties crypto firms face in operating and expanding their services. The current climate impacts even established players.
Looking ahead, Anchorage Digital’s renewed focus on its core custody offerings positions it to potentially capitalize on a future where clear regulation might drive increased institutional adoption. Its federally chartered bank provides a unique advantage in a sector still grappling with a fragmented and uncertain legal framework. This strategic clarity might be crucial for sustained growth in the long run.
Industry-Wide Layoffs Reflect a Broader Trend
Anchorage Digital is far from alone in facing the harsh realities of the crypto market. The period leading up to and following its layoffs saw a cascade of workforce reductions across the industry, illustrating the precarious nature of rapid growth in an unregulated environment.
Major exchanges and service providers such as Coinbase, Kraken, Crypto.com, Gemini, and Bittrex all announced significant cuts to their teams. Coinbase alone reduced its workforce by 36% in multiple rounds, impacting thousands of employees, while Gemini laid off 36% of its staff.
Even Luno cut 35% of its workforce in January 2023 and another 20% in July 2026. These widespread layoffs reflect broader shifts in the industry, impacting a range of different crypto offerings.
These widespread layoffs were largely attributed to the prolonged crypto winter, declining trading volumes, and increasing regulatory scrutiny globally. Companies that had rapidly expanded during the bull market of 2021 found themselves overstaffed for the subdued conditions of 2022 and 2023. The market has since shown signs of stabilization, but the cautious approach remains.