The Impact of Regulation and Its Effect on Crypto Employment
- Posted: 18.08.23
Current state of crypto hiring
It’s hot, then it’s cold – the crypto market seems stuck in a perpetual motion machine. Every brief pause in the market is followed immediately by dramatic swings. Altcoins come, altcoins go, and only Bitcoin and Ethereum stay strong.
Even if the crypto market isn’t actually quite that volatile, it can certainly feel that way for workers in the sector. So what can you expect with the current state of crypto hiring? How is the ever-evolving world of crypto regulation impacting the crypto job market, and where will things go from here?
Here at Plexus, we obviously care deeply about what (and how) the crypto market is doing. Here’s our take on what the current regulatory framework means for the future of the sector, and for its employees.
Regulatory Framework
“Evolving” is the best way to sum up what’s happening with regulation for crypto assets.
The biggest ongoing flashpoint in crypto regulation is between the SEC and one of the industry’s biggest players, Binance. The Binance vs SEC lawsuit in the US (more properly the SEC vs. Binance, since the SEC started this whole mess) might eventually clarify what, exactly, a security is or isn’t – and just how much power the Securities and Exchanges Commission has to regulate things that look like securities.
But in the meantime, the lawsuit continues to keep everyone guessing. And it’s only one part of SEC Chairman Gary Gensler’s ongoing quest to bring the crypto sector to heel in the name of consumer protections. Gensler has also initiated lawsuits against Coinbase, and investigations continue against defunct exchanges like FTX.
The SEC crackdown put a damper on investor attitudes for a while. But while nervousness continues over how the fight will play out, other factors have played an arguably larger role in shaping the broader market. Everything from optimism surrounding the new world of AI-powered tools (and Sam Altman’s Worldcoin) to continued uncertainty over inflation seems to have influenced the larger market performance.
“At the market lows in early 2023 crypto was still an $800bn industry, and today sits comfortably back above $1tr again. Whilst market sentiment has flipped tentatively positive again, hiring sentiment is playing catch up.” – Shaun, Founder of Plexus
While the US is the largest crypto market, it isn’t the only one – and around the world, other crypto jurisdictions are arguably further down the road of defining and regulating digital currencies and other digital assets.
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Stablecoin regulation
Singapore set out a comparatively clear framework for stablecoins issued in the city-state, attempting to beat the SEC at its own game of bringing crypto “out of the shadows.”
Unlike the SEC, the MAS (Monetary Authority of Singapore) uses an incentive model. Only crypto assets that meet the framework will be able to claim to be MAS-regulated, and severe penalties will be issued to crypto firms that claim MAS approval without meeting the framework.
Regulation also hasn’t seemed to stop new players from pouring into the stablecoin space – witness Paypal’s recent splash with PayPal USD.
Regulation around the globe
In the UK, there’s at least one crypto-related sector that’s hiring. The National Crime Agency (NCA) is expanding its Complex Financial Crimes team – code for the crypto-focused side of its investigations.
In the meantime, Europe has developed into a fairly crypto-friendly theatre, albeit one with significant differences between, say, Estonia and Portugal.
Market Sentiment and Hiring
Broader market sentiment
How has the broader market impacted crypto hiring?
Financial markets remain unsettled, but both crypto and traditional finance have avoided major meltdowns in recent months. While regulation appeared to kill some projects, others continue to gain momentum, and some have even staged surprising comebacks after legal victories (yes, we’re talking about Ripple and XRP).
What we’re seeing with crypto hiring is the sector’s maturation into a smaller but arguably more robust market. Legal developments grind slowly to a degree of clarity in most jurisdictions, with the EU and UK having recently passed landmark crypto regulation. And even the recent spate of lawsuits in the US promises to provide an answer to many of the lingering questions, whatever those answers may be.
The NFT world mirrors the broader crypto economy; smaller, but remarkably resilient. A handful of blue-chip projects and creators (hello, Yuga Labs and Frank DeGods!) are clear market leaders, while smaller projects come and go without much of a splash.
Crypto hiring trends
On the project side, the Wild West days are gone.
Engineers dominate, demonstrating that the actual underlying blockchain technology is going nowhere. Developers remain in high demand. Education is a growing focus, reflected in a demand for product developers and people with market savvy to explain a raft of increasingly technical financial products, including emerging Bitcoin ETFs like the ones on offer from Valkyrie and Proshares. Researchers are also increasingly important, to stay on top of important projects and delve deep into on-chain data.
The boom in regulation has also led to a corresponding increase in regulation and compliance officers on crypto projects.
It’s true that the market downturn last year led to more jobseekers on the market, but we’re seeing an increasing number of talented workers with the experience and skills to help the market rebound and grow.
According to our team, there is now a focus on usability and the customer experience. Creating products that are user centric is key for wider adoption, with this, we’ve seen a need for more product focused roles.
The Plexus Takeaway
Crypto is in a buyer’s market. There’s a growing pool of crypto users, but protocols and projects can’t assume that crowds of users will flock to their platforms. Users have to be earned – so employees who can help their companies demonstrate credibility and a superior product will be in the driver’s seat.