Digital assets exchange Crypto.com has revealed plans to shed a fifth of its workforce, in the latest round of sweeping lay-offs to hit the cryptocurrency industry after last year’s crisis.
The job cuts at Crypto.com come just days after US-listed rival Coinbase said it would reduce its headcount by almost 1,000 employees in an attempt to “weather downturns in the crypto market.”
The lay-offs at major crypto firms, which also includes US bank Silvergate and broker Genesis, highlight how the ructions from the FTX collapse and $1.6tn token sell-off last year are rippling in to 2023.
Crypto.com’s retrenchment marks a stark change of fortune since the height of the crypto bull market in November 2021 when the group purchased naming rights for Los Angeles’s Staples Center, home to the LA Lakers basketball team.
The Singapore-based company also launched an advertisement at the 2022 Super Bowl, which showed basketball’s LeBron James telling a computer-generated version of himself as a teenager that “if you want to make history, you got to call your own shots”.
Crypto.com last summer parted ways with 5 per cent of its workforce, which represented roughly 260 people at the time.
Digital assets exchanges, which typically earn revenue from trading fees, are under pressure as volumes have cooled as falling coin prices have deterred punters from putting new money to work.
Crypto.com’s chief executive officer Kris Marszalek insisted on Friday the exchange remains financially healthy with a strong balance sheet, and the job cuts were a result of having to “navigate ongoing economic headwinds and unforeseeable industry events”.
Popular crypto tokens like bitcoin and ethereum soared to record highs in 2021, generating unprecedented levels of mainstream and institutional interest in cryptocurrencies. However a drastic downturn in prices last summer caused several once-prominent companies in the space to collapse into bankruptcy, forcing multiple others to thin their workforce in a bid to survive the economic pressure facing the industry.
Earlier this month, crypto-focused bank Silvergate said it would cut 40 per cent of its workforce, while crypto broker Genesis cut 30 per cent of its own staff. The Securities and Exchange Commission late on Thursday filed a lawsuit against Genesis and Gemini — the crypto trading shop founded by the Winklevoss twins — alleging a lending programme the two partnered on represents an unregistered securities offering.
Gemini co-founder Tyler Winklevoss called the SEC’s action “super lame” and “counterproductive” while Genesis did not respond to a request for comment.