Written by 7:37 pm Cryptocurrency

Cascade of Cryptocurrency Firms Slash Staff After FTX Collapse

Cryptocurrency exchanges Kraken, Bybit, and Swyftx joined a growing list of crypto-related companies cutting staff as the contagion from the collapse of the FTX exchange spreads.

Key Takeaways

  • Kraken, Bybit, and Swyftx cryptocurrency exchanges joined other crypto firms that have announced cuts to their workforce in the latest week.
  • The FTX collapse and a “deepening” bear market are taking their toll on a range of participants in the cryptocurrency market.
  • Bankruptcy hearings have begun that will determine the fate of the failed FTX and its creditors.

Crypto Exchanges Slash Staff

The ongoing crypto winter continues to hurt firms in the industry. In the last week, three more cryptocurrency exchanges, Kraken, ByBit, and Swyftx announced job cuts.

Kraken, the third-largest cryptocurrency exchange by trading volume, is to reduce its staff size by nearly a third. It said of the layoffs in a Nov. 30 blog post:

“Today we’re announcing one of the hardest decisions at Kraken to date. We’re reducing our global workforce by approximately 1,100 people, or 30 percent, in order to adapt to current market conditions.”

At ByBit, Ben Zhou, CEO of the Dubai-based crypto exchange, on Dec. 4 tweeted a similar outlook, saying:

“Difficult decision made today, but tough times demand tough decisions. I have just announced plans to reduce our workforce as part of an ongoing re-organisation of the business as we move to refocus our efforts for the deepening bear market.”

Other crypto and technology firms around the world announcing layoffs since the early November collapse and subsequent Chapter 11 bankruptcy filing of FTX include Lemon Cash, Unchained Capital, and Coinbase.

The FTX Contagion Continues

The recent moves to reduce employee numbers at crypto exchanges are being attributed in large part to the continued crypto bear market, along with the fallout from FTX’s failure. In an interview with Bloomberg, the ByBit CEO cited the market downturn and the failure of crypto lender BlockFi as signs ”that we are entering into an even colder winter than we had anticipated from both industry and market perspectives.”

The Bottom Line

The bankruptcy hearings that began on Nov. 22 will likely affect FTX’s founder and former CEO, Sam Bankman-Fried, as well as the entire cryptocurrency sector. A restructuring attorney representing FTX, James Bromley, said on the first day of the hearing, “What we are dealing with is a different sort of animal. Unfortunately, the FTX debtors were not particularly well-run, and that is an understatement.”

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