Crypto lending firm BlockFi is laying off about 20% of its staff as the company anticipates a major crypto slowdown and growing concerns about a weak economy.
CEO Zack Prince He said In a tweet on Monday, BlockFi was affected by a “dramatic change in macroeconomic conditions,” which had a “negative impact” on growth.
Backed by venture capitalist Peter Thiel, BlockFi has grown exponentially in recent years, taking advantage of lower borrowing costs and higher cryptocurrency prices. Before the recent cuts, the company went from 150 employees at the end of 2020 to more than 850.
BlockFi, qui propose un produit d’épargne populaire qui permet aux clients d’accumuler des intérêts sur leurs avoirs en monnaie numérique, a levé plus de 957 millions of dollars depuis son lancement in 2017 et visa une valor de milliards de 5 de milliards The last year. However, industry publication The Block reported last week that the company was in the process of raising a landing round worth about $1 billion.
Cryptocurrency companies across the board are looking for ways to cut costs as investors shy away from riskier assets, reducing trading volumes. Bitcoin has nearly halved this year after dropping 15% on Monday, while Ethereum lost two-thirds of its value in 2022, dropping by 16% at the start of the week. The crypto market has fallen below $1 trillion from $3 trillion at its peak in November 2021.
Crypto.com recently Announcing the reduction of the number of employees from 260 peopleSo did Gemini, which said it would lay off 10% of its workforce — the first of its kind for a cryptocurrency exchange and custodian in the United States. Meanwhile, Coinbase has widened the employment gap “for the foreseeable future” and plans to eliminate some job opportunities.
Celsius, another cryptocurrency lender, has just halted all withdrawals and transfers between accounts, due to “extreme market conditions.” Celsius has lent over $8 billion to its clients, making it one of the biggest players in the crypto lending space.
BlockFi has publicly distanced itself from Celsius in a tweet on Monday, declaring that she is “not percentage sting” and that she has “never worked with them as a partner.”
Prince said that BlockFi’s primary goal is “to achieve profitability” and that the company is “here for the long-term.”
In addition to job cuts, the platform is also cutting marketing spending, eliminating uncritical sellers, lowering executive compensation and slowing employee growth, according to a blog post by co-founders Prince and Florey Marques.
Prince said customers would not be affected by the cuts.
“Customers will experience no fundamental change to the quality of service they expect, their money is protected, and all platforms and products will continue to operate as normal,” the prince tweeted.
While this may reassure people who have entrusted their money to the company, BlockFi is under more scrutiny by regulators.
In February, the company agreed to pay a $50 million fine to the US Securities and Exchange Commission, plus another $50 million in fines to 32 states to settle similar fees related to its crypto accounts.
a look: The cryptocurrency market hasn’t hit the bottom yet