The crisis roiling the crypto industry has continued to spread to a number of companies since the run on the stablecoin terraUSD last spring.
Many of the biggest crypto lenders have fallen following customer withdrawals, risky practices and lack of regulation. The bankruptcy filings, in particular, have underscored how intertwined many of the industry players were.
Investors flocked from crypto to safer asset classes in response to the Federal Reserve’s continued rate increases. There are several continuing bankruptcy proceedings from 2022: FTX, Blockfi, Celsius and Voyager.
Below is a list of major layoffs, bankruptcies and other distress so far this year:
The crypto brokerage said it was laying off 28% of its workforce, equivalent to about 110 employees, according to CoinDesk. This summer, the firm had laid off another 150 people and said it would close its offices in Argentina.
The largest U.S. crypto exchange said it would eliminate around 20% of its staff, or about 950 people, and enact broad cost cuts as part of a restructuring plan. At the end of September, the company had around 4,700 employees. The exchange laid off employees in the summer as well.
The company has struggled to turn a profit with fewer investors trading cryptocurrencies.
Coinbase recently agreed to pay a $50 million penalty to New York state’s Department of Financial Services to settle accusations that it allowed customers to open accounts without conducting sufficient background checks.
The Singapore-based exchange cut a fifth of its global workforce—its second round of layoffs in six months.
Some Crypto.com staff found out they were laid off when they were suddenly disconnected from online meetings, or booted off company systems, The Wall Street Journal reported.
Several crypto exchanges were hit by heavy withdrawals following the sudden collapse of FTX in November. A misstep by Crypto.com that month added to its troubles. CEO Kris Marszalek said the company had mishandled a roughly $400 million transaction.
Digital Currency Group
The crypto conglomerate said it would shut its wealth-management division, HQ, which was a relatively new addition to Barry Silbert‘s holdings. DCG’s other properties include Genesis Global Capital, a crypto lending firm; Grayscale, which manages the world’s largest bitcoin fund; and the crypto-focused media company CoinDesk.
The crypto media outlet recently retained investment bankers to help it explore options, including a partial for full sale, the Journal reported. In the past few months, Digital Currency Group received multiple unsolicited offers north of $200 million for CoinDesk, which it acquired in 2016 for $500,000.
DCG’s crypto lending firm laid off 30% of its staff and filed for chapter 11 bankruptcy protection, along with two of its subsidiaries.
Its undoing is one example of how the collapse of FTX rippled through the industry. Genesis had lent at least hundreds of millions of dollars to the trading firm Alameda Research, an FTX affiliate, the Journal reported.
Genesis had held on longer than others; crypto lenders Celsius Network and Voyager Digital had filed for bankruptcy in July.
The cryptocurrency exchange said it laid off around 35% of its global workforce, marking another setback for parent company Digital Currency Group. The London-based firm had more than 900 employees—known internally as “Lunauts"—before the layoffs, according to a company spokeswoman.
The crypto exchange said it planned to lay off about a fifth of its staff, and said that it would keep a very lean team. It said its users’ assets would “always be fully protected" and that its security capabilities were robust.
Nansen, a blockchain analytics platform, said Huobi saw a significant increase in net outflows before the announcement.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.