Several crypto companies threatened with layoffs and bankruptcies of CoinEdition
© Reuters Several crypto companies threatened with layoffs and bankruptcies- The stablecoins crisis is having a ripple effect on the crypto industry.
- Events in 2022 revealed how intertwined stakeholders have become in the crypto industry.
- Major crypto firms are taking drastic measures in their quest to survive.
The challenge surrounding stablecoins that started in 2022 is to extend their influence into 2023. The consequences of this development are being whipped up into more bankruptcies, with more companies subscribing to drastic adjustments that could lead to massive layoffs.
The crash of TerraUSD in the spring of 2022 exposed several malpractices in the crypto industry, revealing how intertwined most stakeholders have become. It set off a ripple effect that is still unfolding with increasing losses.
Many of the biggest crypto lenders in the sector have gone underground due to a loss of trust from customers who have withdrawn their money. There is also increasing scrutiny from regulatory authorities, making it more difficult for most crypto companies to conduct business as usual. Therefore, many are making structural adjustments to help their survival.
One of the top crypto companies to start an adjustment program is Blockchain .com, which announced plans to lay off 28% of its workforce. This corresponds to 110 employees after the company fired 150 workers last summer. It also said it would close its offices in Argentina.
Coinbase (NASDAQ: ), the largest crypto exchange in the United States, has also laid off plans to lay off 950 workers, representing 20% of its workforce. The company also plans to start unspecified cost reduction processes as part of a restructuring plan.
This would not be the first time Coinbase has laid off employees since the stablecoin crisis began. It let some of the employees go in the summer of 2022.
Crypto. com, like Coinbase, also plans to cut its workforce by 20%. It will be the second layoff campaign by the company in six months. According to reports, the latest layoff exercise did not come with advance notice. Employees first realized they no longer work with the firm after they were unable to connect to staff meetings.
Last year’s crypto industry crisis peaked when FTX collapsed, surprising many investors. That led to massive withdrawals from centralized exchanges, the impact of which they are beginning to feel in the new year.
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