Crypto.Com, BlockFi Announce Massive Layoffs as Economic Crisis Bites

Crypto exchange Crypto.com and lending platform BlockFi announced on Monday plans to cut over 400 jobs globally, as they come under pressure from difficult market conditions.  

Crypto.com said that it would reduce its workforce by 5%, that is about 260 employees. CEO Kris Marszalek disclosed the announcement via Twitter social media: "Our approach is to stay focused on executing against our roadmap and optimizing for profitability as we do so ... That means making difficult and necessary decisions to ensure continued and sustainable growth for the long term by making targeted reductions of approximately 260, or 5%, of our corporate workforce."

Meanwhile, BlockFi also announced on Monday that it is laying off 20% of its workforce, which is around 170 people. Zac Prince, BlockFi CEO, said in a tweet Monday that the crypto lending firm is reducing its “headcount by roughly 20% and the reduction impacts every team at the company. This decision was driven by market conditions that have had a negative impact on our growth rate and a rigorous review of our strategic priorities.”

Recession Fears

Crypto.com and BlockFi have followed a series of various crypto firms faced with massive layoffs. Late last month, Bitso, one of the biggest crypto exchanges in Latin America, laid off 80 employees due to the recent downturn in the crypto market. Last month, Buenbit, an Argentina-based cryptocurrency exchange, also cut its workforce by 45%.

Earlier this month, Coinbase announced a freeze of its hiring for the foreseeable future and withdrew a number of accepted offers in order to deal with current macroeconomic conditions. Early this month, Bahrain-based crypto exchange Rain Financial Inc and Latin America's largest crypto exchange 2TM also laid off over a dozen employees as digital asset markets remain red.

Crypto market is experiencing bad days as value of the digital assets plunged below $1 trillion on Monday, triggered by the announcement by Crypto lender Celsius Network that it paused all withdrawals and transfers between accounts, citing “extreme market conditions.”

The latest crypto crash marked the first time since January 2021 when the Bitcoin price fell to a low of $23,750 and the cryptocurrency market has reached as low as $926 billion, according to data site CoinMarketCap. In November 2021, the global crypto market peaked at $2.9 trillion but has been seeing a steady decline this year.

In the past two months, investors have dumped riskier assets amid high inflation and fears that interest rate raises by central banks will hamper growth. Extreme market conditions and central banks’ policy updates are exacerbating the consequences for digital assets.

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