The demand for digital assets this year has been severely hampered by difficult market conditions, according to cryptocurrency exchange Kraken, which announced on Wednesday that it would reduce its global workforce by 30%, or roughly 1,100 employees.
Investors have fled risky assets because of rising interest rates and concerns about an economic slowdown, and recent bankruptcies have made the situation even more uncertain.
“Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets,” the company said.
The number of new clients signing up has decreased, according to Kraken, and the layoffs will return the company’s headcount to where it was a year ago.
The hiring and institutional onboarding teams at cryptocurrency exchange Coinbase Global Inc. saw employment cuts earlier this month.
Kraken, which has already reduced employment and marketing expenditures, claimed it was compelled to make job cuts since all other options had been used up to bring costs into line with market demand.
As BlockFi filed for bankruptcy earlier this week, the sector is still feeling the effects of the collapse of FTX, the most prominent victim of the year’s market upheaval.
The largest cryptocurrency, bitcoin, has experienced a price decline that has brought it to a two-year low.
Since then, international regulators have surrounded the crypto industry, with many attempting to impose strict regulations to control the largely unregulated market.
