With the crypto industry reeling from huge price drops, a number of companies have begun laying off staff, including in their risk and compliance departments.
As the Wall Street Journal reported Tuesday (July 19), compliance experts warn cutting this staff could bring risks as the crypto world faces ongoing scrutiny from U.S. regulators.
“Compliance specialists join a firm for salaries and titles and also for a good compliance culture,” Will Brown, of the global recruiter Hamlyn Williams, told the Journal. “If [the firm] got a reputation that they decrease compliance staff when the market gets tough, you would worry about the longevity to join the compliance staff.”
That can lead to more turnover in compliance departments, Brown added.
As PYMNTS reported in June, Coinbase cut about 18% of its full-time workers as it dealt with a steep decline in its stock price.
“We appear to be entering a recession after a 10+ year economic boom” Coinbase CEO Brian Armstrong said at the time. A recession could lead to another crypto winter, and could last for an extended period.
Among the laid-off workers were compliance analysts, investigations analysts, financial-crimes-investigations analysts and a compliance and anti-money laundering manager in India, the Journal said, adding that Coinbase also rescinded a number of job-offers in the compliance sector.
“Coinbase will never compromise on its commitment to security and compliance and continues to hire for security and compliance roles around the world,” a spokesperson told the Journal in an email.
The company said it should have about 5,000 full-time employees by the end of the second quarter, four times number it had at the end of 2020. Coinbase declined to say how many of these workers would be compliance staff.
Meanwhile, the crypto exchange Gemini — which cut 10% of its staff in June — recently saw the departure of its director of business operations and intelligence, who most recently was the deputy chief compliance officer, and its head of risk, sources told the Journal.