Cryptocurrency exchange Crypto.com has announced a layoff of 20% of its staff. According to Crypto.com’s CEO, the move is aimed at ensuring the company’s long-term success amidst a decline in the crypto community’s trust in centralized exchanges due to the FTX collapse. Due to the crypto bear market, Crypto.com had already laid off 2,260 people in June and October 2022. This move comes days after Coinbase took a similar action.
20% of staff laid off at Crypto.com
As the bear market continues exchanges are taking tough measures to ensure their long-term effectiveness. Kris Marszalek, the co-founder and CEO of the exchange Crypto.com, announced that his company has cut its workforce by 20%.
For the CEO of Crypto.com, this dismissal is to be added to the list of collateral damage of FTX. Indeed, the collapse of the FTX platform resulted in huge losses for its customers. This has caused crypto holders to lose confidence in centralized exchanges, which have seen their customers withdraw funds en masse. In the face of these difficult economic conditions, the current downsizing will be able to guarantee the platform’s profitability in the long run. That’s what Kris Marszalek is hoping for anyway.
This is not the first time Crypto.com has made massive layoffs during the current bear market. In June and October 2022, the Singapore-based exchange put nearly 2,260 of its workers on technical leave. These layoffs make Crypto.com the exchange with the most layoffs in 2022 according to The Block Research.
Coinbase, Huobi, Kraken, …, exchanges in difficulty in 2023 except Binance
2022 was a difficult year for exchanges, 2023 will probably be the same. Indeed, since the beginning of this year, bad news for exchanges have followed one another. A few days before the announcement of the reduction of Crypto.com’s workforce, its competitor Coinbase took a similar step. In a message to his teams, Brian Armstrong, the CEO of Coinbase announced the layoff of 950 workers from his exchange. Shortly before, it was the Huobi exchange that laid off 20% of its staff.
Apart from massive layoffs, several exchanges have already announced the closure of their activities in some countries. This is the case for Kraken and Coinbase, which announced this year their withdrawal from Japan in order to focus their efforts on promising markets.
On the other hand, Binance seems to be resisting the wave that is shaking the exchanges. While all its competitors are shedding some of their staff, Binance plans to add more in 2023. Speaking during a conference in St. Moritz, Switzerland, Changpeng Zhao, Binance’s CEO, said his company will hire between 1,200 and 2,400 new workers in 2023.
In addition, Binance keeps expanding its business area as its competitors capitulate. Since the beginning of this year, Binance has acquired the Sakura Exchange BitCoin (SEBC) in Japan just days after buying Tokocrypto in Indonesia. The CZ exchange has also received registration in Sweden, thus covering six European countries.
One thing is for sure: exchanges are severely shaken by the bear market and the collapse. Binance, on the other hand, is doing quite well. If the FTX saga is handled better, users might trust the centralized exchanges again. In addition, many predictions of the crypto market in 2023 are in the green, wait and see!
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