Goldman Sachs-backed Circle forced to downsize

Goldman Sachs-backed Circle forced to downsize

Circle, the Goldman Sachs-backed company that is behind several cryptocurrency endeavors, has been feeling the pinch of the changing ecosystem. The firm has announced that it needs to reduce expenses and one of the easiest ways to make this happen is to cut personnel. Circle is reportedly letting go about 10% of its staff, around 30 employees.

Circle is behind the Poloniex crypto exchange, the SeedInvest crowdfunding site and the USDC stablecoin, which it launched through a partnership with Coinbase. The company’s CEO, Jeremy Allaire, asserts, “We made these changes in response to new market conditions, most importantly, an increasingly restrictive regulatory climate in the United States. Circle remains strong and healthy, and we will continue to drive new product innovation and growth globally, working with jurisdictions that offer forward-looking policies regulating digital asset businesses, while we press for more balanced crypto policy in the U.S.”

The reduction has occurred primarily at the company’s headquarters in Boston, Massachusetts. Circle’s office in New York also saw a few cuts, mainly in finance and product development.

Allaire partly blames the need to cut staff on the lack of regulatory oversight in the industry. This is hurting innovation and leading to the entire space becoming stagnant. He said in a recent blog post that digital currencies do not need to be considered as securities, commodities or even currencies, and that current laws aren’t sufficient to cover the crypto ecosystem.

Allaire asserted, “We urge lawmakers to recognize the unparalleled economic power that permissionless innovation has unleashed and to act to let crypto and blockchain technologies flourish. We know lawmakers want to support economic growth and want them to seize the opportunity to lead the charge.”

The executive pointed out that attempts have been made for years to bring regulatory guidelines up to date, but that these efforts have failed, leading to a decline in innovation. He stated, “Innovative technologies deserve new regulatory frameworks, and we will continue to advocate for change. But without congressional action, the Securities and Exchange Commission is forced to rely on 85-year-old laws and 73-year-old court cases to develop guidance about which digital assets might be considered securities. These laws are inadequate to address crypto-which doesn’t easily fall into established categories-and as a result the SEC guidance isn’t easy or straightforward to interpret.”

More work is definitely needed, but it most likely won’t come anytime soon. To legally recognize what crypto is would be to state that it is worthy of existing alongside fiat. This thought makes too many politicians shudder and have nightmares.

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