Categories
Audio Posts

THE CRYPTO CULLING: Thousands of employees are getting the axe as companies face plunging valuations, scandals, and legal turmoil

Listen to this article
Bitcoin crypto winterDespite a rise in crypto prices so far this year, it’s been a rough 2023 for the industry.

FTiare/Getty Images

  • Major crypto companies, including Crypto.com, Coinbase and Genesis, have announced layoffs in 2023.
  • To make matters more complicated, the SEC just filed charges against two major players in crypto. 
  • Despite recent turmoil, prices of major cryptocurrencies like Bitcoin and Ethereum are up so far this year. 

It’s a cruel, cruel winter for the world of crypto. 

The new year has barely begun, but so far, the pain that the cryptocurrency industry experienced in 2022 has shown no sign of slowing down: Thousands have been given the pink slip, and the Securities and Exchange Commission levied charges against two major players in the industry. 

Here’s a quick recap of what’s already happened:

Two weeks of mass layoffsBrian Armstrong, the CEO of Coinbase.CEO Brian Armstrong recently announced that Coinbase would lay off 20% of its staff.

Patrick T. Fallon / Getty Images

In the early days of January, several major companies in the cryptocurrency industry, such as Genesis, Coinbase, Blockchain.com, and Crypto.com, announced plans to significantly reduce their workforces. For a few of these companies, such as Crypto.com and Genesis, this marks the second round of layoffs within a short period, following previous headcount cuts during the summer due to a decline in cryptocurrency prices.

In this recent spate of layoff announcements, some companies alluded to “unscrupulous actors,” while others directly addressed the elephant in the room: FTX’s bankruptcy.

FTX’s fingerprintsSam Bankman-FriedFederal prosecutors have charged Sam Bankman-Fried with fraud, money laundering, and campaign finance violations.

David Dee Delgado/Getty Images

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 cannot pull some assets from crypto exchanges like Gemini, and there is a growing distrust in centralized exchanges among average investors. 

Legal hurdlesEntrepreneurs Tyler Winklevoss and Cameron Winklevoss discuss bitcoin on FOX Business' "Mornings With Maria" television program on December 11, 2017.The SEC sued Tyler and Cameron Winklevoss’ company for offering and selling unregistered securities.

Astrid Stawiarz/Getty Images

To make the situation even thornier, the SEC on Friday accused cryptocurrency companies Genesis and Gemini, founded by the Winklevoss twins of Facebook fame, of unlawfully 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, like the CEOs of Coinbase and Ripple, have asked for more regulation around crypto trading in the past, the charges did not go over well with Gemini CEO Tyler Winklevoss, who criticized the SEC’s actions as “totally 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 faring relatively well: both Bitcoin and Ethereum prices are up by double-digit percentages since the start of the year.

Read the original article on Business Insider