Coinbase Global Inc.’s 20% workforce cut includes at least two dozen legal and compliance staff as the largest US digital-asset exchange copes with a crypto slump.
A dozen people in “risk and compliance” and eight in “legal and policy” had their names listed on an online platform Coinbase set up to help laid off employees find jobs. Five of those listed were lawyers, and three other Coinbase in-house attorneys said on social media they were also let go by the company.
Coinbase said Jan. 10 it would shed 20% of its staff, or 950 people, in a plan to cut operating costs this quarter, as outlined in a securities filing. The layoffs add to 60 jobs eliminated at Coinbase in November and another 1,100 in June.
The latest cuts follow Coinbase’s pledge earlier this month to set aside $50 million to strengthen compliance efforts. The commitment was part of a consent decree signed by Paul Grewal, the company’s chief legal officer, in a $100 million settlement with New York financial regulators related to unauthorized accounts.
Coinbase declined to discuss the specific number of job cuts in legal and compliance.
The company isn’t “making meaningful cuts for roles that are necessary to meet the high standards we set for security and compliance, or to support our mission-critical work,” Coinbase said in a statement.
“Coinbase remains deeply committed to meeting our regulatory obligations and serving as a role model in the industry,” the statement said.
Grewal last year supported Coinbase CEO Brian Armstrong’s contention that the company had grown too quickly during the pandemic, necessitating an about-face on a strategy that had rapidly expanded the size of the legal team.
In an extended Twitter thread at the time of Coinbase’s first major employee cull last year, Grewal commended the “tough but prudent decision” to reduce headcount to help the San Francisco-based company endure a so-called crypto winter that subsequently pushed into bankruptcy some industry competitors.
Besides the five lawyers listed on the Coinbase platform, three others used social media to announce their separation from the company.
They are head of institutional commercial legal Richard “Rick” Estacio, associate general counsel for litigation Amanda Fitzsimmons, and associate general counsel for regulatory Rachel Nelson.
Estacio said via LinkedIn he was laid off four weeks into paternity leave but had no regrets about joining Coinbase. The company hired the former Davis Polk & Wardwell associate last year from JPMorgan Chase & Co.
Nelson, another JPMorgan alum hired in 2019, expressed similar sentiments on LinkedIn. Fitzsimmons, who once spoke about her path to partner at DLA Piper before joining Coinbase in 2021, also said via LinkedIn she enjoyed her time at the company.
Hedge Fund Hire
Coinbase also saw one lawyer decamp for a different cryptocurrency enterprise. Katrina Paglia joined Pantera Capital Management LP as general counsel and chief compliance officer, she said in a statement posted to her LinkedIn profile.
Paglia, hired by Coinbase less than a year ago as an associate general counsel for crypto assets, didn’t respond to a comment request. Pantera also didn’t respond.
Silicon Valley-based Pantera, whose founder and CEO Dan Morehand predicted last year there would be “major meltdowns” in crypto markets, is one of the world’s largest crypto-focused hedge funds.
Pantera had an estimated $5 billion in assets under management a year ago this month. The hedge fund hired deputy general counsel Kyle Canchola last year and currently employs Emma Rose Bienvenu as chief of staff and special counsel. Schulte Roth & Zabel has handled a variety of legal matters for Pantera.
Paglia succeeds former Pantera general counsel Joseph Cisewski, who left last year to join the Commodity Futures Trading Commission as chief of staff and senior counsel to Commissioner Christy Goldsmith Romero, a veteran regulator.
Prior to Coinbase, Paglia worked for a decade at a pair of alternative investment managers, including Och-Ziff Capital Management Inc. and Capstone Investment Advisors LLC, where she spent three years as general counsel and compliance chief.
Paglia’s farewell message credited her “wonderful experience and crypto education” at Coinbase, which confirmed her departure.
Coinbase also saw other lawyers, such as former associate general counsel for product Lindsay Danas Cohen and associate general counsel for international Carly Nuzbach Lowery, leave for new legal chief roles last year.