Singapore-based Crypto.com is in the headlines as it announced that it shall be reducing about 20% of its workforce. This comes amid cryptocurrency exchanges face industry-wide challenges brought on by the collapse of FTX last year.
Crypto.com Announces Plans to Slash 20% Workforce
The announcement by Crypto.com comes amid concerns about reserves and solvency across the sector. When it comes to the timing of such announcement, it should be noted that it came just a few days after rival exchanges Coinbase Global Inc (COIN.O) and Huobi announced their plans to lay off about 20% of their staff.
A source told Reuters last week that Genesis, too, had cut jobs, equating to 30% of its workforce.
The layoffs at Crypto.com would be its second in about six months, after it reduced jobs in July last year to weather the macro-economic downturn amid rising interest rates.
CEO Kris Marszalek said in a statement said that recent FTX collapse “significantly damaged trust in the industry”.
“It’s for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success.”
FTX Trading Ltd., commonly known as FTX, is a bankrupt company that formerly operated a cryptocurrency exchange and crypto hedge fund. The exchange was founded in 2019 and, at its peak in July 2021, had over one million users and was the third-largest cryptocurrency exchange by volume.
The collapse of Sam Bankman-Fried’s FTX was the biggest in string of big crypto-related failures in 2022. It sparked a cryptocurrency rout and has left an estimated 1 million creditors facing losses of billions of dollars.