On Tuesday (May 21), Jeremy Allaire, the Co-Founder and CEO of FinTech startup Circle announced that his company had decided to lay off 30 employee (approximately, 10% of its staff).
Boston-headquartered Circle, which is backed by (among others) Goldman Sachs, Bitmain, Baidu, and IDG Capital, was launched in October 2013 as a peer-to-peer (P2P) payments technology company, and initially only had one product: “Circle Pay”, a way to “move money between currencies, countries and friends.”
Circle acquired cryptocurrency exchange Poloniex on 26 February 2018. Circle is also known in the crypto space for launching fully dollar-collateralized stablecoin “USD Coin” (USDC), which it created in partnership with Coinbase, on 26 September 2018. It also has a crypto over-the-counter (OTC) desk called “Circle Trade”that mainly serves institutional investors (since the minimum trading size is $100,000).
The Circle CEO announced the layoffs on Twitter around 19:06 UTC on May 21:
Today we made organizational changes at Circle and eliminated approximately 30 positions, which is about 10% of our employees. We made these changes in response to new market conditions, most importantly, an increasingly restrictive regulatory climate in the United States.
— Jeremy Allaire (@jerallaire) May 21, 2019
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.
— Jeremy Allaire (@jerallaire) May 21, 2019
We deeply respect the colleagues who are leaving Circle today, and we’re grateful for the contributions they’ve made to building the company and the crypto industry as a whole.
— Jeremy Allaire (@jerallaire) May 21, 2019
In his first tweet, Allaire, refers to “increasingly restrictive regulatory climate in the United States.” This is interesting for two reasons:
- On May 16, when Poloniex announced that it planned to disable the markets for nine cryptoassets (that are currently listed on its platform) for its customers in the U.S., it explained that it was taking this action due to the lack of regulatory clarity in the U.S. market since these assets might be considered “to be securities.” The nine affected altcoins are Ardor (ARDR), Bytecoin (BCN), Decred (DCR), GameCredits (GAME), NEO Gas (GAS), Lisk (LSK), Nxt (NXT), OMNI, and Augur (REP); trading in these assets will be disabled on May 29, at 16:00 UTC, for the exchange’s customers in the U.S. (this action will not affect those customers outside the U.S.).
- On May 20, Circle published a blog post written by Allaire that expressed the company’s “deep” frustration with having to make the difficult decision to have Poloniex delist nine cryptoassets in the U.S., and explained that this was due to the “signalling” from the “recent guidance” issued by the U.S. Securities and Exchange Commission (SEC), in which “US regulators are taking an extremely broad view of what crypto assets might be deemed securities.” He also said that Circle would “take the fight for crypto” to the U.S. Congress:
“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.”
