Kraken, the 3rd-largest digital assets exchange, is laying off 30% of its staff as crypto winter deepens

• Kraken is laying off 1,100 of its employees, the company said in a blog post Wednesday.
• The news comes at a difficult time for the industry, as bankruptcies mount and crypto prices languish.
• A Kraken spokesperson told Insider that the company had "no material exposure" to FTX.

Kraken, the third-largest cryptocurrency exchange by volume, said in a blog post on Wednesday that it would slash 30% of its work force. The firm, which rivals giants like Coinbase and Binance, cited "macro economic and geopolitical factors" that led to the cuts.

"This resulted in significantly lower trading volumes and fewer client sign-ups. We responded by slowing hiring efforts and avoiding large marketing commitments," Jesse Powell, the co-founder of Kraken, said in a statement. "Unfortunately, negative influences on the financial markets have continued and we have exhausted preferable options for bringing costs in line with demand."

Employees were offered 16 weeks of pay, an extension of benefits like health care and counseling services, along with extra time to exercise vested stock options, and immigration support for employees who were in a different country on firm-sponsored visas.

"I'm confident the steps we are taking today will ensure we can continue to deliver on our mission which the world needs now more than ever before," Powell added. "I remain extremely bullish on crypto and Kraken."

The announcement comes at a precarious time for the industry, with mounting bankruptcy filings, liquidity issues, and layoffs. Major crypto lender BlockFi filed for Chapter 11 bankruptcy protection on Monday, after having significant exposure to the now-bankrupt FTX.

FTX, the once-$32 billion crypto empire founded by Sam Bankman-Fried, shuttered after Coindesk reported that its native FTT token made up an unusually large portion of sister trading firm Alameda Research's balance sheet. Shortly after, there was a run on the token, sparking a liquidity crisis at the exchange and ultimately leading to its bankruptcy on November 11. Numerous firms have reported exposure and subsequent losses from the implosion, causing widespread contagion throughout the industry.

When asked if FTX's downfall played a role in Kraken's layoffs, a company spokesperson told Insider: "No. Kraken was already reviewing its business and workforce needs when news of FTX bankruptcy was made public. Kraken had no material exposure to FTX."