Crypto.com lays off 20% of staff as FTX contagion deepens

Crypto.com will lay off 20% of its corporate workforce, or nearly 1,000 people, to adjust to current market conditions, CEO Kris Marszalek said in a tweet on Friday.

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Company executives have notified employees affected by the job cuts “as part of structural changes,” becoming the latest digital resource store to downsize its headcount. Employees were told the firm was looking to cut expenses and narrow its focus to more promising companies during the cold cryptocurrency winter.

Marszalek said several factors played into their decision to downsize. Despite maintaining a strong balance sheet, he says, Crypto.com has faced economic headwinds and unpredictable industry events. He explains that they grew ambitiously in early 2022, aligning with the broader sector, but now the trajectory has changed with a confluence of negative developments.

Crypto.com said in July it was cutting 5% of its jobs as an effort to cut costs, with reports that it unofficially laid off others circulated in August. However, the CEO said these cuts did not take into account the FTX slump, which significantly damaged confidence in the industry.

“It is for this reason, while we continue to focus on prudent financial management, we have made the difficult but necessary decision to make further reductions to position the company for long-term success,” he added.

Crypto.com is not alone in dealing with the effects of the cryptocurrency collapse. Many other platforms are cutting hundreds of jobs amid huge pullbacks and regulatory scrutiny after the FTX implosion. The cuts were also prompted by macroeconomic and geopolitical factors, which curbed client demand, lowered trading volumes and reduced signups.

Topping this news was Coinbase, which cut about 950 jobs, or 20% of its workforce. This marks his third round of layoffs in less than a year. Kraken followed Coinbase’s move and let go of 30% of its workforce, around 1,100 of its employees. Barry Silbert’s Digital Currency Group also cut nearly 13% of its headcount to weather a downturn in the cryptocurrency sphere.

Crypto.com made headlines yesterday after telling its Canadian clients it will phase out Tether stablecoin (USDT) trading, transactions, deposits and withdrawals by the end of this month.

The cancellation of the world’s largest and most liquid stablecoin comes as the Ontario Securities Commission (OSC) banned cryptocurrency exchanges operating in the region from touching Tether (USDT). The decision dates back to 2021 when the stablecoin was deeply linked to alleged market manipulations, and was the only prohibited digital asset in the country.

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