Major Crypto Platform Cuts Headcount 20% For The Second Time In Seven Months

Coinbase announces plans to Retire For the second time in seven month, 20% of its employees went on strike. Headwinds In the larger cryptocurrency sector.

The publicized prosecution of FTX exchange platform collapse and its subsequent demise Sam Bankman-Fried, the company’s former chief executive, has produced hesitancy toward cryptocurrency products in recent months. Brian Armstrong, Coinbase CEO said in a message Employees that “unscrupulous actors in the industry” The potential of “further contagion” The company is facing near-term problems, which will require cost reduction measures. This will result in the dismissal of 950 employees.

Armstrong stated that the failure to “large competitor” And the increased “regulatory clarity” He would see long-term advantages for his company if FTX collapses.

“But it will take time for these changes to come to fruition and we need to make sure we have the appropriate operational efficiency to weather downturns,” He made a comment.

Armstrong added that Coinbase had survived multiple bear markets in the sector over the last decade, noting that the most recent selloff is the first in the company’s history to occur amid broader macroeconomic pressures.

“As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario,” He went on. “While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount.”

Coinbase is the first to be laid off. Deleted Concerns that the economy might enter recession were expressed by 18% of June’s workers. The exchange rate of bitcoin, the digital asset that has the largest market capitalization (at $22,500) to $17.400, has fallen.

Armstrong stated last year that the past was good. “crypto winters” have decreased trading volume and thereby impacted Coinbase’s primary source of revenue. Armstrong concluded that even though the company’s growth was 200% year-overyear since the start of 2021 Armstrong believed that it had stagnated. “over-hired” The boom in popularity for digital currency products & services.

Recent exposures of commingled funds among FTX, Alameda Research and a trading company controlled by Bankman-Fried prompted consumers to withdraw assets from cryptocurrency platforms. This led to multiple liquidity crises. BlockFi, a lending platform, Filled for bankruptcy Several firms, such as Genesis, emerged within days of FTX’s insolvency. Clearly indicated Voyager and Celsius were already in bankruptcy several months before the imminent possibility of bankruptcy.

A Survey CNBC and Momentive conducted a survey that found 60% of Americans view the risk of investing in cryptocurrency as a concern. “high.” A further 26% view cryptocurrencies as moderately dangerous, while 10% consider them to be safe. “little” No risk.

Bankman-Fried pleaded guilty to his various connections with the federal government that became well-known after the collapses of his companies. Not guilty Last week, eight charges were brought against them, including conspiracy to commit wire fraud and conspiracy to perpetrate securities fraud.

Mark Cohen, a Bankman-Fried lawyer who was formerly Protected Ghislaine Maxwell (a Jeffrey Epstein confidant) successfully requested that U.S. District Judge Lewis Kaplan seal the addresses and names of two unidentified individuals who obtained a $250 million bond from Bankman-Fried.