ShapeShift, the company founded by first-wave bitcoin entrepreneur Erik Voorhees, has announced the layoffs of 37 employees, about a third of the company’s headcount. It joins a growing list of crypo startups battered by the broad market downturn and regulatory pressure and forced to reduce headcount, including Consensys, Bitmain, SpankChain, and Steemit.
ShapeShift may have been particularly hard hit by increasing regulatory scrutiny. The company’s core product once allowed users to instantly, easily, and anonymously convert between cryptocurrencies. But in September, the company announced it was implementing new identity requirements, a decision Voorhees said was made “under duress” and was “due to our need to navigate the current regulatory environment.” In yesterday’s announcement, Voorhees confirmed that implementing these controls led to the loss of “valuable” partners that used the service.