The recent bearish market which prolonged for the whole year of 2018, has impacted many crypto firms, irrespective of their size. A leading crypto exchange platform based in Switzerland ‘ShapeShift’ has taken a harsh decision considering the current crypto market climate.
The exchange firm has declared that it is laying off a third of its team, which is around 37 employees. To announce this, ShapeShift CEO Erik Voorhees wrote in a blog post that the startup had laid off a third of its staff. He explained the move as “a deep and painful reduction, mirrored across many crypto companies in this latest bear market cycle.” He cited a range of difficulties including a tough market climate as the reason behind the layoffs. Voorhees also unveiled this info on Twitter.
With a heavy heart, today we laid off 37 people. We've published a blog on this, also discussing some of our missteps and lessons as a company. "Overcoming ShapeShift’s Crypto Winter and the Path Ahead" by @ShapeShift_io https://t.co/1eNT54eyPp #bitcoin
— Erik Voorhees (@ErikVoorhees) January 8, 2019
Further, he elaborated the motives behind this decision noting that several problems have caused the exchange to head towards these layoffs. One of a major factor is the large exposure of the company assets to cryptocurrency. He said, “As a company, our greatest and worst financial decision is the same: to embrace substantial exposure to crypto assets. Much of our balance sheet is comprised of them. We accept the volatility, we accept the risk.”
Additionally, the company’s much-talked decision to implement KYC measures due to regulatory pressure made users to verify their identities. This caused the exchange to lose clients and users on a significant level. It also generated criticism from ShapeShift customers and commentators. Moreover, according to Voorhees, ShapeShift isn’t the only crypto exchange to reduce its staff. Reportedly, ConsenSys decreased a 13 percent of its staff in December. Not so long ago, crypto mining firm Bitmain has revealed that it is cutting staffers.
The CEO confirmed that ShapeShift would be working on the crypto trader’s issues regarding trust. He noted that the firm is aiming to fix the “tragic” custodial risk inherent in trading cryptocurrencies. He added that ShapeShift has been “weaving the new ShapeShift into existence.” Then, the CEO wished his departing employees “good fortune and good grace,” while apologizing for the loss of their jobs.
He concluded in the blog post stating, “2018 marked a rough year. While this new one starts upon some painful reorganization, we’re encouraged and hopeful for 2019.”