Thousands of employees are getting the ax as companies face falling valuations, scandals and legal turmoil
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Major crypto companies, including Crypto.com, Coinbase and Genesis, have announced layoffs in 2023.
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To make matters more complicated, the SEC just filed charges against two major players in crypto.
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Despite recent turmoil, the prices of major cryptocurrencies such as Bitcoin and Ethereum have risen so far this year.
It’s a cruel, cruel winter for the crypto world.
The new year has barely begun, but so far the pain experienced by the cryptocurrency industry in 2022 has shown no signs of slowing down: Thousands have received the pink slip, and the Securities and Exchange Commission indicted two major industry players.
Here is a quick summary of what has already happened:
Two weeks of mass redundancies
In early January, several major companies in the cryptocurrency industry, such as Genesis, Coinbase, Blockchain.com and Crypto.com announced plans to significantly reduce their workforce. For a few of these companies, such as Crypto.com and Genesis, this marks the second round of layoffs in a short period of time, following earlier layoffs over the summer due to a decline in cryptocurrency prices.
In this recent wave of layoff announcements, some companies alluded to “unscrupulous actors,” while others directly addressed the elephant in the room: FTX’s bankruptcy.
FTX’s fingerprints
Indeed, Sam Bankman-Fried’s company’s spectacular implosion in November has created ripple effects that are still causing pain in the industry.
Crypto investors still can’t get any assets from crypto exchanges like Gemini, and there is a growing distrust of centralized exchanges among average investors.
Legal Obstacles
To make the situation even more difficult, the SEC on Friday accused cryptocurrency companies Genesis and Gemini, founded by the Winklevoss twins of Facebook fame, of illegally offering unregistered securities for sale. The charges come after SEC Chairman Gary Gensler faced criticism from some investors for failing to protect against FTX’s alleged abuses.
While some leaders in the crypto world, such as the CEOs of Coinbase and Ripple, have asked for more regulation around crypto trading in the past, the accusations did not go over well with Gemini CEO Tyler Winklevoss, who criticised SEC’s actions as ‘completely counterproductive’ on Twitter.
Despite the current turmoil in the industry, with some analysts questioning how much more strain the industry can take, cryptocurrency prices are doing relatively well: both Bitcoin and Ethereum prices have increased by double-digit percentages since the beginning of the year.
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