DCG-owned crypto exchange Luno employs 35% of its employees

Cryptocurrency exchange Luno is the latest company in the industry to lay off, aiming to cut 35% of its global workforce.

The London-based firm’s chief executive, Marcus Swanepoel, informed staff of the layoffs at 12 noon London time on Wednesday in a live town hall.

“2022 has been an incredibly tough year for the broader tech industry and the crypto market in particular,” Swanepoel said in an internal memo shared with CNBC on Wednesday.

“Unfortunately, Luno has not been immune to this turbulence, which has affected our overall growth and revenue numbers.”

Luno has a total workforce of approximately 960, according to its LinkedIn profile, meaning more than 330 jobs will be affected.

The cuts particularly affect Luno’s marketing team. A Luno spokesperson told CNBC that the layoff move would have “minimal or no impact on key operations and compliance teams.”

Luno, which has offices in Africa, Southeast Asia and Europe, is part of the Digital Currency Group’s crypto conglomerate. The company will also scale back its operations in the US and Australia, a company spokesperson told CNBC.

DCG is one of several crypto firms caught up in the fallout from the collapse of FTX, formerly one of the world’s largest crypto exchanges. Genesis, the lending arm of DCG, filed for bankruptcy last week.

Genesis’ bankruptcy filing came after a conflict with one of its peers, Gemini, over a contentious loan deal that generated rich returns for Gemini customers through Gemini’s high-yield lending product, Gemini Earn.

Gemini clients have $900 million saved on Gemini Earn. The service halted withdrawals after Genesis, which lent the funds to large institutional borrowers, put a pause on customer redemptions.

The crypto industry has been mired in a downturn known as a “crypto winter” since the collapse last May of controversial algorithmic stablecoin terraUSD. Higher interest rates from the Federal Reserve have also spooked market participants.

In the note shared with staff on Wednesday, Lunos Swanepoel said the industry had seen a “series of shocks” leading to a constrained funding environment and a shift towards long-term profitability.

“Although we anticipated a downturn and proactively planned ahead with a business and funding model that could be resilient to some of these factors, the scale and speed at which all of this is occurring, and all at the same time, has placed significant strain on our original plans, Swanepoel said.

“This means in practice that in addition to streamlining our strategy to focus on our core strengths, we must also significantly reduce our cost base – which includes headcount across all our markets – to set us up for success going forward.”

Roughly $2 trillion of value has been wiped from the overall crypto market since the peak of the crypto boom in November 2021 – although bitcoin has had a bit of a bounce since the start of the year.

TerraUST’s failure, coupled with deep drops in digital currency prices, triggered a cascade of additional crypto failures, including Three Arrows Capital, Voyager Digital, FTX, BlockFi and Genesis.