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Crypto.com lays off 20% of its workforce citing FTX collapse

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Singapore-based cryptocurrency exchange Crypto.com revealed today it’s reducing its global staff by 20% amid continuing “crypto winter” that has been leading numerous crypto industry exchanges to lay off workers.

The announcement comes shortly after rival exchanges Coinbase Global Inc. and Huobi Global announced plans to cut headcounts by 20%. Similarly, crypto bank Silvergate Capital Corp. said it was laying off 40% of its staff and crypto lender Genesis Global Trading Inc. cut its staff by 30% earlier this month.

Crypto.com Chief Executive Kris Marszalek cited ambitious growth at the start of 2022 following the “crypto boom” in 2021, but noted the sudden downturn in markets afterward with “a confluence of negative economic developments.” This included the collapse of the TerraUSD “algorithmic stablecoin” which caused a further slump in the crypto markets.

The company is also known for a massive deal during 2021 for naming rights for the former Staples Center in 2021 that was valued at a colossal $700 million over 20 years.

Crypto.com also had a rough 2022 with multiple accidental crypto transfers, including one of $7 million to a woman owed $70 and when it sent $400 million to a rival exchange.

These layoffs mark the second time since the middle of 2022 Crypto.com has cut staff numbers following a 260 headcount, or 5%, reduction in headcount announced in June. At the time Marszalek cited the bear markets as well. Although a later report suggested that

However, according to Marszalek, these cuts were unable to prepare the company for the next shakeup to rock the crypto industry that would come in the form of the dramatic collapse and bankruptcy of Crypto.com rival crypto exchange FTX Trading Ltd.

“The reductions we made last July positioned us to weather the macroeconomic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry,” said Marszalek. “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.”

Cryptocurrency market values have fallen almost 60% in Jan. 2022, such as Bitcoin, the largest token by market cap, which started last year around $47,6022 and dropped to $16,600 at the start of 2023. However, recently the crypto coin has begun to increase to nearly $19,150 as of Friday morning in the past 48 hours. Other markets such as Ethereum and Litecoin have likewise fallen.

Image: Crypto.com

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