SAN FRANCISCO (BLOOMBERG) - Two big names in crypto are cutting jobs as the digital currency market continues to spiral downwards. Crypto-lending platform BlockFi said on Monday (June 13) that it will reduce its headcount by about 20 per cent, while digital currency exchange Crypto.com announced a 5 per cent cut last Friday.
Crypto.com, which is headquartered in Singapore, announced layoffs of about 260 staff. Chief executive officer Kris Marszalek tweeted on Friday that the company made the "difficult and necessary decisions" to optimise for profitability and sustainable growth during a market downturn.
BlockFi founders Zac Prince and Flori Marquez said in a blog post that "market conditions that have had a negative impact on our growth rate" drove their decision to make the job cuts. Based in New Jersey, the company has more than 850 employees and is laying off more than 200, dropping its headcount to around 600 workers.
The layoffs are yet another sign of trouble for the once white-hot crypto industry. Celsius Network, another top crypto-lending platform, said on Sunday that it was pausing withdrawals, swaps and transfers following weeks of speculation that it would be unable to pay out the significant returns promised on its products. Earlier this month, crypto exchange Gemini Trust said it planned to slash 10 per cent of its staff and Coinbase Global also announced that it was rescinding job offers and freezing hiring.
The crypto market plummeted after the implosion of the TerraUSD stablecoin in May and several coins are trading significantly lower. At the moment, the price of Bitcoin is just under US$24,000 (S$33,450), representing a 20 per cent drop over the last 30 days.
In a tweet on Monday announcing the layoffs, Mr Prince, who is also BlockFu's chief executive officer, said that the company is committed to sticking around for the long haul.
"Our clients will not experience any material changes to the quality of service they have come to expect, their funds are safeguarded, and all platforms and products continue to operate normally," he said.
The crypto-lending platform is also looking to secure fresh funding at a reduced valuation of US$1 billion, after being previously valued at US$3 billion. The lower valuation is another sign of cooling interest from venture capitalists, who have poured billions of dollars into the crypto industry over the past two years.
BlockFi hit another speed bump this year, when the company agreed to pay US$100 million in penalties following the United States Securities and Exchange Commission's allegations that it was selling its crypto-lending product as an unregistered security.