ShapeShift lays off one-third of team

Getting your Trinity Audio player ready...

Citing the continued bear market in cryptocurrencies, Switzerland-based exchange ShapeShift has let go of 37 employees, about one-third of its work force.

ShapeShift CEO Erik Voorhees made the announcement in a Medium post, saying the company had grown 3,000% in 2017, but afterwards had to deal with the industry-wide downturn.

In describing the “recent pain” as a result of exposure to cryptocurrencies, Voorhees said, “[W]e accept the volatility, we accept the risk,” adding, “Booms and busts are intrinsic to any frontier. And while comfort out here is elusive, passion and opportunity are abundant.”

He admitted that due to “a lack of focus,” in which the company had begun developing noncustodial portfolio management systems and acquired hardware wallet company KeepKey, the core business of providing a platform for trading cryptocurrencies had suffered.

“[D]espite these missteps, the profound and intense bull market of 2017 hid the lessons from our view. Everything was going well. Hundred percent growth every month has a way of obfuscating reality… Then 2018 arrived,” he said.

Among the troubles the company had to deal with was regulatory pressure, due to the lack of identity verification of users. However, by subsequently requiring users to provide personal data in compliance with know-your-customer (KYC) regulations, the exchange received backfire from customers who used its service precisely because of the relative anonymity it provided.

Voorhees said that with the past year’s challenges, a “new ShapeShift” app has been developed. “We don’t want to overstate with grandiose promises, we’ll simply invite people to try it out in the near future,” he said.

Last September, the Wall Street Journal published an article, which alleged, based on the authors’ time spent working with ShapeShift, that $9 million had been laundered through the exchange.

Voorhees hit back at the publication, showing that the amount asserted was arrived at from a lack of “understanding of blockchains and our platform in particular.” He also claimed that his company “has an industry-leading compliance and AML [anti-money laundering] program.”