'No Credible Path': A $4.2 Billion Crypto Bank Just Cut 17% of Its Staff — and an Entire Ethereum Layer-2 Is Shutting Down
In 60 seconds: Anchorage Digital — the first federally chartered crypto bank in the U.S., valued at $4.2 billion — has reportedly cut 17% of its workforce, while Ethereum layer-2 network Blast announced it will shut down after its deposits collapsed more than 98%. Two very different companies, one message: crypto's downturn is still biting.
- Anchorage Digital has reportedly cut 17% of its staff — roughly 68 roles based on CEO Nathan McCauley's February testimony of ~400 employees — with McCauley informing employees this week, per The Information. The company didn't respond to Cointelegraph's request for comment.
- Anchorage was the first crypto company to win a national trust charter from the OCC (2021), was valued at $4.2 billion earlier this year, took a $100 million Tether investment in February, and has been expanding into stablecoin issuance including Tether's USAT.
- Ethereum layer-2 Blast said Friday it will wind down because "the ongoing costs of maintaining Blast exceed the revenue generated by the L2, and we do not see a credible path to making the chain economically sustainable." Users must withdraw via its interface by October 26.
- Blast's total value locked has collapsed to about $32 million from more than $2 billion — a fall of over 98% — and its BLAST token dropped 17% on Friday, extending a decline of roughly 99% from its peak.
- The backdrop: Bitcoin briefly topped $87,000 Friday on weak U.S. jobs data, still far below its $126,000 peak of October 2025.
Friday was the kind of day that tells you where crypto really stands. Not in Bitcoin's price — which actually had a decent day — but in the business decisions: a blue-chip, federally chartered crypto bank quietly cutting nearly a fifth of its staff, and an entire blockchain network admitting its economics never worked. The hype cycles come and go. The balance sheets don't lie.
What happened
Two announcements landed within hours on Friday. First, The Information reported — citing people familiar with the matter — that Anchorage Digital CEO Nathan McCauley had informed employees of a 17% workforce reduction this week, against the backdrop of a prolonged crypto downturn. Then the team behind Blast, the Paradigm-backed Ethereum layer-2, posted on X that it will wind down entirely: "We launched Blast with the goal of building a self-sustaining chain for users and developers. Unfortunately, the economics of operating the chain no longer make sense." The contrast is the story: Anchorage is the industry's regulatory gold standard, a federally chartered bank that was expanding just months ago; Blast was a high-flying 2024 launch that drew over $2 billion in deposits before its mainnet even went live. Both are now shrinking.
Latest verified facts
On Anchorage: the 17% cut, applied to the ~400-person global headcount McCauley cited in February congressional testimony, works out to roughly 68 positions — unconfirmed, since the company hasn't commented publicly. The cuts come even as Anchorage deepens its regulated footprint: it issues Tether's U.S. stablecoin USAT and secured a $100 million strategic Tether investment in February. On Blast: the wind-down is orderly but firm. The team will first withdraw its Lido staking assets — about a week, during which withdrawals pause — then reopen withdrawals with a 24-hour delay until October 26. After that, users must use Blast's bridge contracts on Ethereum directly; funds stay recoverable, but the easy route closes. The BLAST token fell 17% Friday, cutting its market cap to around $23 million.
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Why it matters
Anchorage isn't some offshore casino — it's the company American institutions were told to trust: federally chartered, audited, the custodian of choice for serious money. When a firm like that cuts 17% of its people while expanding into stablecoins, it's telling you the regulated crypto business is consolidating, not booming. And Blast's shutdown warns about the layer-2 gold rush: dozens of networks launched to scale Ethereum, most with token incentives papering over thin economics. Blast is the biggest to admit the math didn't work — "no credible path to economic sustainability" is about as blunt as crypto announcements get. It won't be the last.
Impact on the USA and the world
For the United States, Anchorage's retrenchment lands awkwardly: Washington has spent the year building a friendlier runway for crypto — charters, stablecoin frameworks, ETF approvals — and the industry's flagship bank is still shrinking. That gap between policy optimism and business reality is the defining tension in American crypto right now. Globally, Blast's collapse is a cautionary tale for the money parked in smaller layer-2s: when a chain winds down, your funds are only as accessible as its bridge contracts. The October 26 interface deadline is now circled on thousands of calendars.
What happens next
Three dates matter. October 26: Blast's easy-withdrawal window closes — anyone holding assets there must move them to Ethereum mainnet before then. October 27-28: the Federal Reserve meets, and rate expectations will decide whether Bitcoin's Friday bounce above $87,000 was a turning point or a head fake. And the weeks after: watch whether Anchorage's cuts are a one-time reset or the start of a wider culling among crypto's "regulated" winners. The bull-market story was that regulation would bring the adults into the room. Friday's news suggests the adults are doing layoffs too.