After the FTX collapse, Singapore’s cryptocurrency exchange Crypto.com announces restructuring and axes staff
Cryptocurrency exchange Crypto.com is taking action to reduce its headcount, following the spectacular collapse of FTX late last year.
Singapore-based Crypto.com confirmed the move in a blog post last Friday by co-founder and CEO Kris Marszalek, in which he said the platform will lay-off 20 percent of its workforce.
The cryptocurrency exchange had in November sought to reassure nervous investors, when it said the platform was in good financial health, following the collapse of FTX a week earlier.
Kris Marszalek said at the time that the platform maintained reserves for every coin held on the platform.
But fast forward two months Marszalek now says that the crypto exchange grew “ambitiously” and is unable to withstand the collapse of FTX without the further cuts.
“Today we made the difficult decision to reduce our global workforce by approximately 20 percent,” wrote Marszalek late last week. “All impacted personnel have already been notified. These reductions were in no way related to performance, and we extend our deepest gratitude for all their contributions to Crypto.com.”
“Several factors played into our decision to reduce headcount,” wrote Marszalek. “While we continue to perform well, growing to more than 70 million users worldwide and maintaining a strong balance sheet, we’ve had to navigate ongoing economic headwinds and unforeseeable industry events.”
“We grew ambitiously at the start of 2022, building on our incredible momentum and aligning with the trajectory of the broader industry,” said Marszalek.
“That trajectory changed rapidly with a confluence of negative economic developments,” he wrote. “The reductions we made last July positioned us to weather the macro economic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry.”
“It’s for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success,” wrote Marszalek.
Crypto.com has 2,450 staff, which suggests that a 20 percent reduction will result in approximately 490 employees being let go.
FTX’s new CEO John J. Ray, has previously attested that at least $8 billion of customer assets were unaccounted for in the “worst” case of corporate control he’d ever seen.