Chainalysis Slashes 15% Of Staff Amid Challenging Market Conditions

Updated: 06 June 2024

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Blockchain analytics firm Chainalysis said it’s laying off 15% of its workforce, or about 150 employees, amid difficult market conditions.

It marks the second round of layoffs for the company this year, after it cut 5% of its workers in February. Amid an ongoing cryptocurrency bear market, it said it feels it’s necessary to cut expenses.

“This reorganization reflects our ongoing strategic shifts to balance our growth aspirations,” said Madeleine Kennedy, vice president of communications. “We are going to focus on profitability and maturity and to ensure that we are agile in light of evolving market forces.”

Chainalysis is laying off approximately 150 employees, or slightly more than 15% of its staff of 900. Chainalysis was valued at $8.6 billion in 2022. The company reduces investment in the private sector and focuses on the government sector, which provides 70% of revenue.…

— Wu Blockchain (@WuBlockchain) October 3, 2023

Forbes reported that most of the staff cuts will again affect employees working in marketing and business development roles focused on private sector clients. These job roles have faced increased challenges because Bitcoin has fallen 60% from its all-time high in November 2021.

Crypto firm Chainalysis lays off less than 5% of staff, leaving it with around 900 remaining employees https://t.co/dystZTVY1N

— Bloomberg (@business) February 2, 2023

Chainalysis Shifts Focus To Public Sector

In response to the challenging market conditions, Chainalysis will shift its efforts more to the public sector, which already provides 70% of its revenue, Forbes reported.

Chainalysis is known for collaborating with public sector agencies, including the FBI and the US Securities and Exchange Commission (SEC).

“We remain committed to our mission to build trust in blockchains among government agencies, financial institutions, and cryptocurrency businesses,” a spokesman said,

This shift in strategy is driven by the belief that the public sector provides a more stable environment in the current climate.

“The public sector still has a lot of way to go in creating a safe and regulated environment,” says Kennedy. “In addition to anti-money laundering regulations, there’s still lots of other regulatory issues like prudential soundness, market conduct, and consumer protection that need to be addressed.”

Crypto Industry Downsizing Trend

Besides Chainalysis, several other companies within the cryptocurrency industry have also implemented workforce reductions in response to challenging market conditions.

Binance.US laid off a third of its staff as regulatory pressures intensified in September. R3, a venture-backed blockchain firm, also had to reduce its workforce by approximately 20% in recent months.

Regulatory pressure, market fluctuations, and evolving industry dynamics have all contributed to the reductions.