Posted on January 13, 2023, 4:33 pmUpdated January 13, 2023, 4:34 pm
Will all players in the cryptocurrency sector be fired at the beginning of the year? After Coinbase (950 posts), Huobi (600), Blockchain.com (150), Consensys (100) or Genesis (60), it is the turn of the exchange platform Crypto.com to announce cuts. The Singapore-based company created in 2016 will lay off 20% of its workforce, which will mean cutting around 800 jobs. When asked about the employment situation in France, the platform declined to comment.
After having already cut 5% of its workforce in the summer of 2022 (260 positions) to deal with the decline in the crypto market linked to the collapse of the Terra ecosystem, Crypto.com is reacting this time to the disappearance of FTX, ex – number 2 of the cryptocurrency exchange platforms. Its fall has definitively destabilized the sector.
Towards lower sponsorship spending?
“The discounts [de postes, NDLR] carried out last July allowed us to weather the macroeconomic slowdown, but this did not take into account the recent collapse of FTX, which significantly damaged confidence in the sector”, justifies Kris Marszalek, co-founder and CEO of Crypto.com , in a statement released Friday. To reassure the market, the company had published its “reserve test” in December, carried out by Mazars.
This had demonstrated that the funds invested by its customers (in bitcoin, ether, USDC, USDT, etc.) were guaranteed by reserves deemed sufficient. But a month earlier, the platform had caused serious ecosystem concern when an unofficial audit revealed that it relied nearly 20% – or $558 million – in shiba, a hyper-speculative cryptocurrency…
Despite a recovery in the price of cryptocurrencies since the beginning of January (+13.5% for bitcoin and +17% for ether), the outlook for 2023 is uncertain and the industry is showing a wait-and-see attitude. Thus Crypto.com “will focus on prudent financial management,” announces Kris Marszalek, while the platform was known until then for its expensive sports sponsorship strategy: Formula 1, basketball and lately, it has been one of the stars of the World Cup World in Qatar.
Preparation for a more restrictive PSAN in France
Registered as a digital asset service provider (PSAN) by the Autorité des marchés financiers (AMF) in France since mid-October 2022, Crypto.com has embarked on an ambitious development plan there, with an endowment of 150 million euros. This should notably allow it to support Web3 start-ups and establish itself in the ecosystem while Paris has been chosen as the regional headquarters.
In France, Crypto.com will above all have to prepare for a regulatory tightening that could come into force by October 2023. On January 24, the National Assembly will in fact have to vote on an amendment aimed at making the registration, but the approval of the PSAN. More restrictive (no player has it yet), it anticipates the transposition of the MiCA regulation scheduled for 2024.
Will staff cuts reduce the platform’s ability to comply? When asked, he assures that “the layoffs will not impact our ability to continue to be leaders in compliance and security”.