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Kris Marszalek

Crypto.com Announces Cutting Down Its Workforce By 20%

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Crypto businesses are once more forced to make cuts as the bear market enters its second year and the industry experiences massive meltdowns that harm its future.

In the latest instance, co founder and CEO of Crypto.com took to twitter to announce staff layoffs by 20% due to “ongoing economic headwinds and unforeseeable industry events.”

“Today we made the difficult decision to reduce our global workforce by approximately 20%,”  Marszalek said in his official Twitter account on Jan. 13.

“All impacted personnel have already been notified. These reductions were in no way related to performance, and we extend our deepest gratitude for all their contributions to Crypto.com.”

Marszalek said several factors influenced their decision despite the exchange growing to more than 70 million users worldwide.

The trading platform earlier announced minor job reductions totaling 260 employees, or 5% of its workforce in June.

The layoffs from last year, according to Marszalek, helped the company weather the macroeconomic downturn, but they did not take into account the collapse of the digital asset exchange FTX in November which he said: “significantly damaged trust in the industry.”

“It’s for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success.”

The leading Singaporean cryptocurrency exchange said that it would officially remove USDT stablecoin for Canadian users on January 31 at 1 p.m. ET, TronWeekly reported.

Several businesses, including Coinbase Global Inc., Blockchain.com, Genesis, and Crypto.com, are starting a new round of layoffs.

In the first two weeks of 2023, the four firms Huobi, cryptocurrency bank Silvergate Capital Corp., and Ethereum development company ConsenSys collectively contributed for the loss of thousands of jobs, with more than 1,600 already having been lost before Crypto.com.

More Trouble For Crypto Firms

The latest round of layoffs occurred as a potential US recession loomed, which will likely result in job losses across industries.

Tech and financial behemoths like Amazon.com Inc., Goldman Sachs Group Inc., and BlackRock Inc. are also laying off large numbers of employees due to the increased risk of interest rates.

More upheavals could occur as crypto brokerage Genesis and digital asset exchange Gemini have been slapped with lawsuit by the US regulator SEC on 12 Jan. The duo have been accused of offering unregistered securities for sale.

Crypto.com Transferred $1B+ Funds To FTX, CEO Responds

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Crypto.com is in the limelight following the revelation that the exchange has transferred over $1 billion USDC to FTX in the past year, one crypto enthusiast revealed.

“They likely fell victim to @SBF_FTX’s incredibly great APR deception. And they figured, “Why not make some decent money from the deposits from the users?”

Crypto.com CEO Kris Marszalek admitted the transfer but said the funds were used to hedge customers’ orders, “We never deployed capital for yield with FTX or any 3rd party”, and that its total exposure to FTX is under $10 million.

Marszalek also stated that 1 billion over a period of a year was “minuscule” compared to its trading volumes.

Crypto Twitter was divided on the statements with some demanding more explanation on the transferred funds.

The other day, the community was alarmed after the exchange allegedly sent 320k ETH to a wallet address linked to Gate.io in late October. Although the platform has recovered the funds, Changpeng Zhao, the CEO of Binance, recommended that customers stay away from it.

The unprecedented fallout of FTX, once deemed as crypto’s bail-out king for its role in the recent crypto meltdown, has raised doubts over the reliability of centralized players. 

Crypto.com Claims The Transfer Was A Mistake

To boost confidence amid the FUD, major industry execs began sharing proof of reserves including Crypto.com, which published its wallets and disclosed how much and which cryptocurrency it maintains on behalf of its customers.

However, some experts quickly noted a suspicious transfer of 320,000 ETH to a wallet address connected to Gate.io on October 21, 2022.

Users were more skeptical because the exchange asserted that all user-owned cryptocurrencies are maintained offline in cold storage in collaboration with hardware wallet provider Ledger.

In an effort to contain the damage, CEO Kris Marszalek took to Twitter to say that the transaction was a mistake. “It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address,” he claimed.

Despite the justification, the move left the crypto community with a negative impression. Many users have questioned how it was possible for $400 million worth of ETH to be unintentionally sent to an address that wasn’t the intended recipient.