Anchorage Digital, the federally chartered US digital asset bank valued at $4.2 billion earlier this year, has cut 17% of its workforce, The Information reported Friday, citing people familiar with the matter.

CEO Nathan McCauley informed employees of the reduction this week, according to the report. Anchorage employed roughly 400 people globally as of February, based on McCauley's congressional testimony at the time, which places a 17% reduction at approximately 68 positions if headcount has remained near that level. A public relations contact representing Anchorage did not immediately respond to a request for confirmation.

The layoffs land at an awkward point in the company's trajectory. Anchorage has spent the past year deepening its institutional footprint even as crypto markets have deteriorated, and the workforce reduction signals that the prolonged downturn is now pressing on operating costs at one of the sector's most closely regulated firms.

Anchorage occupies a distinctive position in the US digital asset market. In 2021, the Office of the Comptroller of the Currency granted it a national trust charter, making it the first crypto company to receive that designation. Since then, the firm has grown into a major crypto custodian, serving institutional clients that require regulated, chartered infrastructure for asset storage.

The company has also pushed into stablecoin issuance. It is involved in issuing Tether's new US stablecoin, USAT, and earlier this year received a $100 million strategic investment from Tether. That capital commitment, combined with the charter and custody franchise, positioned Anchorage as a beneficiary of the industry's pivot toward regulated, institutionally oriented products.

The contradiction between expansion and contraction is the notable operational detail here. A firm that secured a nine-figure strategic investment and entered stablecoin issuance within months is simultaneously reducing headcount by nearly a fifth. That pattern suggests margin pressure from the broader market has outweighed the revenue implications of new institutional lines of business, at least in the near term.

The market backdrop explains part of the calculus. Bitcoin briefly recovered above $87,000 on Friday but remains well below its $126,000 peak reached last October. The Information cited the year-long crypto market downturn as the backdrop for the reduction, and custodians typically feel prolonged bear markets through reduced fee revenue on assets under custody and slower institutional onboarding, even when client commitments remain intact.

The cuts also reflect a wider correction across crypto-industry employment. Firms across trading, lending and infrastructure have trimmed staff over the past year as trading volumes and asset values compressed, and even well-capitalized, chartered institutions have not been insulated.

For Anchorage's institutional clients, the operational question will be whether the reduction touches custody operations, compliance or client-facing teams. The company did not disclose which functions were affected, and a 17% cut at a firm of roughly 400 employees is large enough to reshape internal capacity across several departments.

The timing complicates the picture further. Anchorage is simultaneously scaling USAT issuance with Tether's backing and integrating a $100 million investment, both of which ordinarily require staffing investment rather than reduction. How the firm reconciles those commitments with a leaner organization will determine whether this marks a temporary cost adjustment or a more durable shift in its operating model.

Whether Anchorage confirms the figures publicly, and how the reduction affects its custody and stablecoin rollout timelines, will be the details to watch as the firm heads into the remainder of the year.