Anchorage Digital Cut 17% of Staff. A Federal Charter Doesn't Pay the Bills.
Anchorage Digital, the first federally chartered US digital asset bank, has reportedly laid off 17% of its staff, per The Information. The cuts are the latest reminder that regulatory legitimacy and revenue are two different things.
What's the point of a federal banking charter if you still have to cut 17% of your staff? That's the question hanging over Anchorage Digital this week, after Chief Executive Nathan McCauley reportedly told employees the company is trimming roughly one in six jobs.
The Numbers
The Information reported the cuts, citing people familiar with the matter, and tied them to a crypto slump that's now dragged on for more than a year. Anchorage hasn't commented publicly. No headcount figure, no severance details, nothing on the record.
The backstory matters. Anchorage became the first federally chartered US digital asset bank in January 2021, when the OCC handed it a national trust charter. By December 2021 it had raised $350 million in a Series D led by KKR at a valuation north of $3 billion, with Goldman Sachs, Andreessen Horowitz, Apollo and Wellington in the room. That's a blue-chip cap table by any measure.
And 17% is a real number. Not a rounding error. Coinbase cut about 1,100 people, roughly 18% of staff, in June 2022, then another 950 in January 2023. Kraken shed around 1,100, about 30%, in November 2022. Same story, different logo.
Why the Charter Didn't Help
Here's the thing about federal charters. They're a moat, not a business. They buy you legitimacy with institutions, a seat at the regulatory table, and a story to tell limited partners. They don't buy you trading volume.
Anchorage earns most of its money on custody and related services, which is fee-based. Fees scale with assets under custody and client activity. Both fell hard when the market turned. A charter can't fix that arithmetic, no matter how many press releases describe it as a competitive advantage.
Color me skeptical, but I've been hearing "regulation is the moat" for three years now, and it keeps colliding with the same problem. Qualified custody is a low-margin business that gets worse when prices drop, and the compliance overhead that comes with a national trust charter doesn't shrink when revenue does.
What Insiders Are Saying
Custody operators I've talked to frame it bluntly. According to people close to the institutional side, demand for qualified custody didn't disappear. It got concentrated. The large asset managers settled on two or three providers and stopped kicking the tires on everyone else.
That's the part of this cycle people miss. It didn't kill institutional interest in crypto. It killed institutional interest in the long tail.
What to Watch
Three things. First, whether Anchorage confirms an actual headcount number, and whether the total lands closer to 200 or 300 employees. Second, whether other federally chartered and trust-chartered players follow suit. BitGo and Fireblocks are the names to keep an eye on there. Third, whether the OCC keeps approving new charters at the same pace it did in 2021 and 2022.
If the first chartered digital asset bank in the country can shrink its staff by 17% without a public statement, that says something about how durable the model really is.
The question worth asking: if the best-capitalized, best-connected custody bank in the US is cutting jobs, what's the pitch for the next ten that want a charter? I'd rather see the next disclosure than another essay about institutional adoption.
