New York-based blockchain analysis startup Chainalysis has laid off 20% of its workforce. The scaledown will enable the company to focus on the path to profitability, an executive revealed. The layoffs come despite some major positive news from the company, including international expansion to Europe and the unveiling of new tools.
Chainalysis laid off 39 employees. It currently has 155 employees after the cuts. The move is focused on profitability, the company’s director of communications Maddie Kennedy told CoinDesk. It will also allow the company to shift its resources into market-focused strategies and product teams.
The layoffs are unexpected, especially since the market has recovered, in part, from the scathing effects of the 2018 crypto winter. Many companies scaled down during the brutal market last year as the prices of most cryptos took a beating. However, this year has been much better and more companies are hiring and expanding.
Chainalysis has also been making positive moves, which makes the scaledown all the more unexpected. In February 2019, the company raised $30 million in Series B funding for international expansion. As CoinGeek reported at the time, the funding round was led by Accel Partners, with the funds raised being used to expand the company’s operations.
The company monitors cryptocurrency transactions for any illicit activities and counts banks, big businesses and government departments as some of its clients. Just a month ago, the company’s software was used to shut down one of the largest child pornography sites on the internet. Authorities tracked crypto transactions of the operators using Chainalysis software, arresting 330 people and rescuing 23 children.
The company has also continued to expand its product offerings. In August, it launched real-time alerts for suspicious transactions for 15 cryptos. Most recently, it launched Kryptos, a crypto risk data clearinghouse for financial institutions.
And while Chainalysis is scaling down, its rival Elliptic announced yesterday that it had added XRP monitoring to the cryptos which it monitors. The company also revealed that it had unearthed $400 million worth of illegal XRP transactions.
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