Given the financial and reputational hits the industry suffered last year, attracting legal and compliance workers to work for cryptocurrency companies is a challenge, say those hiring for positions in the industry. But the expertise that compliance professionals can bring to the job will likely have a big impact in helping to rebuild the sector's damaged reputation.
To attract talent, some cryptocurrency companies are working to distinguish themselves from bad actors in the sector by promoting their compliance approach. But it is not easy.
โThere is a big stigma in the industry right now,โ said Jorge Pesok, who is hiring for the legal team at the nonprofit HBAR Foundation, which provides grants to crypto projects.
โ[The candidates] They're just more hesitant to join now, because they're thinking about their long-term career moves, whether it's a smart idea, because some people have gotten burned," said Pesok, who serves as the foundation's chief legal officer. full time in 2021, serving as general counsel and chief compliance officer at cryptocurrency exchange platform Tacen.
Before the most recent cryptocurrency market crash, companies in the sector were able to attract legal and compliance talent with higher salaries, better benefits (such as equity), and opportunities to develop and implement compliance procedures and programs in an emerging field, according to industry participants. saying.
Some of those hiring for compliance work have had to change course in the current environment. To persuade a recent candidate to accept a job offer, for example, Pesok spent hours answering questions and addressing concerns, using the story of his own career path and her experience working at HBAR as an example.
Last year, cryptocurrency companies and exchanges frequently poached lawyers from both law firms and other cryptocurrency companies, bringing them in-house to help navigate an evolving regulatory landscape and helping curb outside legal expenses as that the industry was under increasing government scrutiny.
But with the arrival of crypto winter last year, the ability of crypto companies to attract talent has decreased significantly. Many lawyers and compliance executives who were attracted by the opportunities are now hesitant to take the plunge or are leaving the industry, joining or returning to more stable companies such as consulting or conventional finance, industry experts said.
"The events of the last year and a half have caused many people to reconsider their enthusiasm for this space," said John Wolf Konstant, senior consultant at technology-focused legal recruiting firm Whistler Partners. He cited layoffs at cryptocurrency exchange Coinbase. Global and diverse bankruptcies, including cryptocurrency lenders BlockFi and Celsius Network, which together "took a lot of wind out of the sails."
Carolina Ceballos, chief compliance officer at blockchain infrastructure company Paxos Trust, said hiring for compliance positions remains difficult, despite layoffs at other companies that provide her company with a larger talent pool. Some candidates choose to join traditional financial institutions when deciding between competitive offers from Paxos because of the industry's difficult reputation, she said.
To attract new staff, Ceballos emphasizes that Paxos has a compliance approach that prioritizes regulation and a high level of excellence.
"It is a real opportunity for the Paxos model to shine right now and be known as an alternative, and cryptocurrencies can be made to protect all our users, and this faster and safer way of doing finances, while having all the controls established". "Ceballos said. "That's how we're solving these problems and how we're talking to regulators, and that's a big opportunity for Paxos."
Paxos said it significantly increased the number of employees on its compliance team over the past year, but the company declined to provide specific numbers. The company, which issued and listed the Binance dollar-pegged cryptocurrency, drew the ire of regulators earlier this year. New York regulators told Paxos to stop creating more BUSD tokens, also known as Binance USD. A Paxos spokeswoman said: "Since that date, we have successfully liquidated the token and redeemed over $12 billion in value to customers without any market disruption."
Cathy Yoon, who has worked in various legal positions in the cryptocurrency sector since 2017, said she plans to stay in the industry. She said people are still interested in joining or staying in the space despite being laid off, but candidates are looking for greater long-term stability and are hesitant to join after last year's bankruptcies and scandals.
Yoon, who recently started as general counsel for the Wormhole Foundation, manager of the crypto platform's Wormhole protocol (her third job since April 2022), said she has increased the amount of due diligence she performs before taking on potential projects.
"I ask more questions and ask about things that, as a normal job seeker, I wouldn't ask before," Yoon said. These questions include determining what the internal approval process is like and who is in charge of the company's finances.
Will Brown, executive search leader for financial services at recruiting firm Hamlyn Williams, said hiring for traditional banking and fintech companies has increased over the past six months as these companies try to fill vacancies and attract talent from cryptocurrencies. But he expects the pace of hiring for cryptocurrency compliance to gain momentum in the coming months.
"Over the last nine months or so, a lot of the regulatory pressure hasn't gone away, on many projects compliance is becoming more critical to the business and we're seeing more hiring because of that," Brown said, adding that recent regulatory actions against crypto companies, such as those against Ripple Labs and Coinbase, "solidify the view that they need to continue hiring for these roles."
Write to Mengqi Sun at mengqi.sun@wsj.com
