No job is safe in the crypto industry right now as long as the entire market lingers in the current crypto winter.
CoinDesk originally reported that the Blockchain.com was cutting 25% of its staff Thursday, with the company citing the current bear market for its new need to shutter a few windows and kick a few employees to the curb. This also includes the company closing its Argentina-based offices. A little less than half of the fired employees are based in Argentina, with another 26% in the U.S. and another 16% in the U.K.
The company had reportedly been getting most of its demand from U.S., U.K., and markets in Africa, so it claims that shuttering its Argentina-based office is a move toward consolidation. It’s a sad move for a company that started as the first bitcoin blockchain explorer in 2011, which later started offering crypto wallet and exchange services.
Blockchain.com declined to comment on the story. The report said that Blockchain.com had grown from 150 to 600 staff over the past year or so, which means close to 150 staff are being cut from many parts of the globe. In addition to axed staff, the company is cutting back on institutional lending and its NFT marketplace. Fired employees will apparently get severance of between 4 and 12 weeks and job replacement assistance for only those based in the U.K. and U.S.
The company told CoinDesk that staffing cuts bring the crypto broker back to staffing levels it had at the start of the year, which was a much rosey-er time for the whole crypto environment in general. The Dallas Cowboys signed a sponsorship deal with Blockchain.com just this past April, before the bottom fell out of the crypto market once the Terra/Luna stablecoin ecosystem collapsed. Blockchain.com’s headquarters is based in Miami, Florida, which has attempted to become a haven for various blockchain-based enterprises.
In a mid-June blog post, company CEO Peter Smith said they had gone through crypto crashes before, and they had been “preparing for this moment, and throughout 2021 invested in our systems to ensure our products remain available and functioning as our customers expect.”
But what may be different this time around is that there is a whole lot of money the company might never see again thanks to the collapse of hedge fund Three Arrows Capital. The firm that once managed $US18 ($25) billion for many crypto-based businesses defaulted on $US675 ($937) million bitcoin loans, and a Virgin Islands court ordered the firm to liquidate its assets. Blockchain.com is reportedly dealing with a $US270 ($375) million shortfall after 1.21 ha shut down shop. It remains unclear if any of the loans companies gave the hedge fund will ever be returned since its leaders have skedaddled.
According to a report from The Block, 1.21 ha had previously borrowed and repaid more than $US2 ($3) billion from Blockchain.com over four years, according to a now-removed affidavit, which was $US1.3 ($2) billion more than previously disclosed. The company told The Block they “intend to hold them accountable to the fullest extent of the law.”
Of course it isn’t the only exchange to announce cuts in the past two months. Gemini, which is owned by the old-school tech players the Winklevoss twins, cut around 100 staff back in June and reportedly cut another solid chunk of its workforce earlier this week, according to CoinTelegraph citing an unnamed source close to the company.
The largely unregulated crypto industry might be trying to keep their head above water in the current bear market, but at least they can be celebrating that many proposed and feared crypto regulations are being stymied. According to the documents reviewed by CoinDesk, the South Korean government was all set to drop new taxes on crypto earnings, but in a sudden twist officials delayed those tax reforms until 2025 when they were originally set to drop in 2023. Meanwhile, it seems that crypto regulations being pushed by come congressional leaders in the U.S. are also largely toothless.