The cryptocurrency industry has announced mass layoffs amid fears of a so-called “crypto winter”. The fall in the price of bitcoin, which has lost more than two-thirds of its value since the highs in November, has dragged the entire sector into a serious crisis. This crisis was exacerbated by the Luna/UST crash – which wiped out $40 billion from investors’ holdings – and Celsius Network’s decision to freeze $11 billion in client assets due to liquidity concerns. Added to this are growing fears of a regression in the United States and the recent hike in interest rates – the largest since 1994.
In response to the crisis, some of the main companies in the sector have announced a wave of layoffs. The American exchange platform Coinbase will lay off 1,100 employees, the equivalent of 18% of the workforce. Gemini, a cryptocurrency exchange owned by the Winklevoss billionaire twins — the same ones who tracked Mark Zuckerberg for “stealing” the idea of Facebook from them — has cut its workforce by 10%, laying off 1,000 workers. The Crypto.com application will cut 5% of its workforce, or around 260 employees. And BlockFi, a cryptocurrency exchange and lending platform, announced via a blog post on Monday that it was laying off 20% of its 850 employees, or about 170 to 200 people.
The layoffs were attributed to the crypto winter. “The crypto revolution is well underway and its impact has been profound. But its trajectory has been anything but gradual or predictable,” the Winklevoss twins wrote on the company blog. “We are now in the contraction phase that is settling into a period of stasis – what our industry calls ‘crypto winter’. All of this has been further aggravated by the current macroeconomic and geopolitical turmoil. »
Brian Armstrong, CEO of Coinbase – the only Wall Street-listed cryptocurrency platform – made a similar point. “One could lead to another crypto winter and could last for an extended period. In past crypto winters, trading revenue (our main source of income) has been reduced. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business in any environment,” said Armstrong, who abruptly laid off about 1,100 employees via email. mail.
Coinbase argued that economic conditions were changing with the risk of the pullback, but also acknowledged that the company grew too quickly, from 1,250 in early 2021 to nearly 6,000 today.
BlockFi’s CEO, meanwhile, expressed regret over the layoffs in a Twitter thread, adding that he would try to relocate the laid-off workers: “We’re working to make sure they find a new opportunity when they’re ready. ”.
This morning we announced that after taking a lot of time to plan and reflect, we have reduced our workforce by approximately 20%. It is not a decision that we take lightly and that brings us great sadness.
— Zac Prince (@BlockFiZac) June 13, 2022
But not everyone in the crypto industry is laying off staff. Binance, the largest crypto exchange in the world, does the exact opposite. The company’s founder and CEO, Changpeng Zhao, announced on Wednesday that he was hiring more staff. “It wasn’t easy to say no to Super Bowl ads, good stadium naming, big sponsor deals a few months ago, but we did it. Today we are recruiting for 2,000 open positions for Binance,” he said on Twitter.
The post can be seen as a criticism of Binance’s competitors, as it suggests that they put company image before the worker. Up to four cryptocurrency companies have paid astronomical sums for a Super Bowl commercial. Coinbase, for example, paid $14 million for a 60-second ad. Four months later, he licensed more than 1,000 workers.
Crypto.com, which has also downsized, spent $700 million on the naming rights to the Los Angeles Lakers arena, formerly known as Staples Center. As part of the 20-year contract, it is now called Crypto.com
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Coinbase: Cryptocurrency Crisis: Exchanges Announce Massive Layoffs Amid Fears Of A “Crypto Winter” | Economy and Business – Tech Tribune France
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