- The layoffs follow those made by rival exchanges Coinbase and Gemini
- A spokesperson for the exchange said the company would continue to focus on its strategy of partnering with famous athletes with digital asset dealings.
In the latest harbinger of troubles in cryptocurrency markets, top exchange Crypto.com is laying off a good chunk of its workforce, according to three sources with knowledge of the matter.
The cuts — which follow Coinbase taking the rare step of rescinding accepted offers and instituting a hiring freeze, plus Gemini laying off 10% of its employees — are the latest begrudging reaction to a beaten-up digital asset market stuck in the doldrums. And they are, sources said, an indication that the yearslong effort by liquidity providers to diversify revenue streams away from spreads on trading fees has yet to bear enough fruit.
A number of the dismissed, sources said, were well-compensated senior personnel who were valued but difficult to justify when it came to the pressing necessity of cutting costs.
A spokesperson for Crypto.com told Blockworks the company recently made the “difficult decision” to carry out “targeted reductions” totaling 260 staffers, or 5% of its workforce.
Sources were granted anonymity to discuss sensitive business dealings.
“I don’t know how long this crypto winter, if we’re in one, is going to last,” one source said. “Some people are saying six to 12 months. Others are saying two years. But [these layoffs] are just the tip of the iceberg. It’s easy to hire big when the going’s good. But the going’s not good, all of a sudden.”
Another source said exchanges have become “entirely dependent on trading fees — a race to the bottom,” adding that it’s a hard income stream to get away from, without launching new business lines that style-drift away from an exchange’s core business of matching crypto buyers with sellers.
The industry’s struggles come at a time when institutional investors from the buttoned-up world of stocks and bonds and commodities are increasingly taking digital assets seriously. Even if big-money investors have yet to deploy capital, they’re almost all devoting time and resources to get up to speed, industry participants say.
“It’s brutal that this is happening now, when we finally start to get taken seriously, after beating this drum for who knows how long,” the third source said. “But we’ll bounce back.”
The Crypto.com spokesperson said the exchange remains focused on shoring up product and engineering capabilities, as well as partnering with professional sports teams, which the exchange deems will “play a crucial role in our mission to accelerate the world’s transition to cryptocurrency.”
Indeed, Crypto.com signed Lebron James as the face of its advertising efforts, capping off a $1 billion push that included a splashy Superbowl ad purchase.
There are still signs of growth. At the end of May, Crypto.com poached an executive from rival exchange Bittrex, Kwon Park, who is leading the company’s Web3 strategy. The company also received conditional approval to expand its operation to Dubai, joining the likes of Binance, FTX and Bybit in the emirate.