Following in the footsteps of its industry peer, Binance, KuCoin is set to reduce its workforce by a significant 30%. This decision, confirmed by multiple internal sources, is not one taken lightly.
KuCoin, a bustling hub of nearly 1,000 employees, has found itself at a crossroads. As shared by journalist Wu Blockchain, The primary catalyst for this strategic downsizing is the implementation of a stringent Know Your Customer (KYC) policy. For those unfamiliar, KYC is a standard banking policy adopted by institutions to prevent identity theft, fraud, money laundering, and other illicit activities. It involves verifying the identity of clients and assessing potential risks of illegal intentions.
This policy was launched in response to a lawsuit filed by the United States, a move that has had a profound impact on the exchange’s operations. The introduction of the strict KYC policy has led to a noticeable decline in the exchange’s profits. This is not entirely surprising. The implementation of such policies often leads to a reduction in user base, as some users may find the process invasive or cumbersome.
However, it’s important to remember that these policies are put in place to ensure the safety and security of all users. They are a necessary step towards creating a more regulated and trustworthy crypto environment.
While the layoffs are certainly a significant change, they represent a company adapting to new circumstances. KuCoin, like many other exchanges, is navigating the delicate balance between regulatory compliance and user experience. In the wake of the news about the layoffs, KuCoin has responded, framing this move as a normal performance appraisal.
