Crypto terminations affect compliance departments

With the crypto industry struggling with large price falls, a number of companies have begun to lay off employees, including in their risk and compliance departments.

As the Wall Street Journal reported on Tuesday (July 19), compliance experts warn that cutting staff could pose risks as the cryptocurrency world faces constant scrutiny from US regulators.

“Compliance specialists join a company for pay and titles and also for a good culture of compliance,” Will Brown, of global recruiter Hamlyn Williams, told the Journal. “If [the firm] got a reputation that they reduce compliance employees when the market gets tough, you would worry about longevity to join the compliance staff. ”

Read more: Coinbase cuts staff by 18% ahead of “Crypto Winter”

This could lead to more turnover in compliance departments, Brown added.

As PYMNTS reported in June, Coinbase cut around 18% of its full-time employees as it handled a sharp drop in the share price.

“We look set to enter a recession after a 10+ year economic boom,” Coinbase CEO Brian Armstrong said at the time. A recession can lead to another crypto winter, and can last for a longer period.

Among the laid off workers were compliance analysts, investigative analysts, financial crime investigators and a compliance and anti-money laundering manager in India, the Journal said, adding that Coinbase also withdrew a number of job offers in the compliance sector.

“Coinbase will never compromise on its commitment to security and compliance and will continue to engage in security and compliance roles around the world,” a spokesman told the Journal in an email.

Related: Today in Crypto: The twins will cut 10% of employees

The company said it would have around 5,000 full-time employees by the end of the second quarter, four times the number it had by the end of 2020. Coinbase declined to say how many of these workers would be compliance employees.

Meanwhile, the cryptocurrency exchange Gemini – which cut 10% of its staff in June – recently saw the resignation of the director of business operations and intelligence, who most recently was deputy chief of compliance, and its head of risk, sources told the Journal.