Crypto exchanges and lenders are still struggling to “hodl” onto their employees. As companies fight to keep afloat after the most recent crypto crash, hundreds of exchanges staff are being kicked to the curb, and some are reportedly trying to keep that fact a secret.
The relatively small crypto lender Hodlnaut, which boasts more than 10,000 active users and $US250 ($347) million worth of assets on its platform, has been hit harder than most. On Friday, the company announced they had laid off 80% of staff, equalling about 40 employees. The Singapore-based company had halted withdrawals August 8, and at the same time withdrew its application to its home country’s financial authorities to authorise digital currency payments, according to a report from The Washington Post. Hodlnaut’s services let users earn interest of up to 7.25% on their crypto stored on the platform.
Earlier this year, Hodlnaut let the TerraUSD (UST) and Terra (LUNA) coins onto its platform, which seems to have proved a major mistake once the price of both coins crashed back in May, taking the price of other crypto currencies down with it. At the time, Hodlnaut publicly delisted both crypto currencies. When it announced it was halting withdrawals, they said they were focusing on “Stabilizing our liquidity and preserving assets.”
Users have asked that the crypto lending company reimburse users for their funds, but the company was less than forthright on specifics for how and if that would happen.
Hi @lordtenderbird, thank you for your message and understanding.
We will continue to communicate updates to users such as yourself with regards to the recovery plan.
— Hodlnaut (@hodlnautdotcom) August 19, 2022
But working with a skeleton crew may be the least of the company’s worries. The company said they had applied to be put under judicial management, a kind of creditor protection for their company as it goes through these market-based pains. It would also protect the company from any legal claims. At the same time, they revealed they were being investigated by Singapore police. Specifically, when answering the question if there were proceedings between the company and cops, the company wrote:
“Yes, there are pending proceedings between Hodlnaut and the Singapore Attorney-General/Singapore Police Force. However, while Hodlnaut is unable to disclose any information in this regard, these actions are taken in what we believe to be in the best interests of our users.”
Dear users, we would like to update that our lawyers have attended the 1st Case Conference for the IJM application on 18 Aug. We have made the JM application docs available to our users for download. Here is our full statement: https://t.co/WRVhDGzvXX Our next update is on 23 Aug pic.twitter.com/3G7YBWqHmE
— Hodlnaut (@hodlnautdotcom) August 19, 2022
Though 40 employees doesn’t seem like a lot in the grand scheme of crypto layoffs. The Verge first reported Thursday based on anonymous internal sources that Crypto.com had laid off hundreds more than the 260 it had previously said it was axing “to ensure continued and sustainable growth for the long term,” according to the exchange’s CEO Kris Marszalek. Though apparently, there were hundreds more staff cut, and Marszalek wouldn’t even tell current employees how many at a recent town hall meeting, according to documents reportedly seen by The Verge.
Unnamed employees told The Verge they were noticing staff going missing from the internal slack or from scheduled meetings. The company had beefed up staff by 50% after the price of crypto peaked in 2021, something in the ballpark of 1,300 additional employees, according to the anonymous sources.
Victoria Davis, Crypto.com’s head of communications, told Gizmodo in an email statement: “We announced reductions in June and since that time we have optimised our workforce to align with current external economic headwinds. We have a strong balance sheet and will continue to invest in product, engineering, and brand partnerships moving forward.”
Though Crypto.com had become a major public face for the crypto sphere thanks to Superbowl ads featuring everyone’s favourite Bostonian Matt Damon and buying out the name to the L.A. Staples Centre.
Though since this past spring the price of the most popular digital currencies took a nosedive, and multiple exchanges have experienced cash crunches. Some, like Hodlnaut, have gone so far as to restrict users from withdrawing funds.