Rebuilding Reputation: Crypto Industry Seeks Legal and Compliance Experts
The cryptocurrency industry has been grappling with major challenges, including the collapse of FTX, fraud allegations, and the fall of some other high-profile companies.
This has created a need for legal and compliance professionals in the crypto sector, particularly due to the growing regulatory scrutiny and the industry’s tarnished reputation.
In fact, hiring experts in compliance has become a daunting task for crypto firms due to the reputational and financial setbacks the industry has faced in the past year.
However, the expertise these professionals bring to the table can play a vital role in rebuilding the sector’s damaged reputation.
“There’s such a stigma to the industry right now,” Jorge Pesok, who is responsible for hiring legal team members at the nonprofit HBAR Foundation, told The Wall Street Journal.
“[The candidates] are just more hesitant to join now, because they are thinking about their long-term career moves, if it’s a smart idea, because some people have gotten burned.”
In the past, crypto firms enticed legal and compliance talent with higher salaries, attractive perks such as equity, and opportunities to develop and implement compliance programs.
However, the recent crypto market crash has significantly diminished the industry’s ability to attract talent.
Legal Professionals Hesitant to Enter Crypto
Many professionals who were initially drawn to the opportunities in the crypto sphere are now hesitant to make the move or are returning to more stable companies in consulting or mainstream finance.
The events of the past year, including layoffs at Coinbase and bankruptcies of major crypto players like BlockFi and Celsius Network, have dampened enthusiasm for the industry.
As a result, hiring for compliance positions remains challenging, especially since candidates often opt for positions in traditional financial institutions due to the crypto industry’s challenging reputation.
Carolina Ceballos, Chief Compliance Officer at blockchain infrastructure company Paxos Trust, acknowledged the difficulties in hiring compliance professionals despite the larger talent pool resulting from layoffs in other companies.
She told the WSJ that Paxos has adopted a regulatory-first approach to compliance and its commitment to excellence to attract new staff.
Meanwhile, Cathy Yoon, who has been working in various legal roles in the crypto sector since 2017, noted that people are still interested in joining or remaining in the industry despite recent layoffs.
However, candidates now seek greater long-term stability and exercise more caution after the bankruptcies and scandals of the past year.
To navigate the hiring challenges, candidates are conducting more due diligence before accepting job offers.
They are asking probing questions about internal approval processes, financial oversight, and overall stability within the company.
While hiring in traditional financial technology firms has picked up as they attempt to fill vacancies and lure talent back from crypto, there is an expectation that the pace of crypto compliance hiring will increase in the coming months.
“In the last nine months or so, a lot of the regulatory pressure hasn’t gone away, a lot of projects are seeing compliance become more business-critical, and we’re seeing more hires because of that,” Brown said.
He added that recent regulatory actions against crypto firms, such as those against Ripple Labs and Coinbase, “solidify the view that they need to keep hiring for these roles.”