Some of the most famous Crypto and Blockchain companies have already done very large layoffs. The next to join the list is the Cryptocurrency exchange ShapeShift. After both Steemit and Bitmain announced major layoffs, the Crypto Bear market has claimed another victim.
According to Erik Voorhees, the ShapeShift Exchange’s CEO, it wasn’t an easy decision to change directions and let go of more than 30% of the staff. He detailed many factors that led to this unfortunate scenario. In a Medium post Voorhees mentioned that the company’s drastic exposure to Crypto assets is the prime reason for the layoffs.
“Ironically enough, I believe that as a company both our greatest and worst financial decision is the same: embracing a substantial exposure to digital assets. It’s no secret to anyone that a large part of our balance sheet is comprised of cryptocurrencies. This unfortunately means that we have to accept both the volatility and the risk.”
ShapeShift layoffs because of Crypto’s harsh Nature
Of course he was quick to mention that the company has made many mistakes along the way. He explained that one huge mistake was diversifying into too many products ahead of schedule. Creating CoinCap, acquiring KeepKey as well as investing time, money and manpower into other initiatives was not the right move. Voorhees also noted that the exchange’s core business wasn’t nurtured in the correct way and he said:
“I cannot blame this mistake on anyone, but myself.”
Last year saw many controversial decisions from most Crypto and Blockchain companies. ShapeShift faced money laundering accusations, but they were quickly dismissed by Voorhees.
The exchange also made the questionable decision to implement Know-your Customer measures due to the regulatory pressure. Of course the move is understandable from a business perspective, but it definitely was not popular with the customers. Despite the large amount of criticism from customers and commentators, Voorhees does not believe that move was a mistake.
The huge expectations from 2018 might have also played a part in the company’s development. Following 2017’s success where the exchange grew by 3000%, it probably was not a good move to expect the same kind of results in the next year. The team grew from 10 people to 125 and the abilities and expenses of the leadership became insufficient in managing the company. It’s unanimously agreed by both leadership and critics that ShapeShift scaled way too fast and tackled on far too many projects.
Going forward, Voorhees stated that despite the ShapeShift layoffs, the exchange will focus on the pain points faced by crypto traders in trusting third-party exchanges with personal funds. He said the company will aim to repair the huge custodial risk inherent in trading with digital assets. The CEO also apologized to the employees he was forced to lay off and wished them all “good fortune and good grace on the road ahead”.
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