- “We see this as a great time to bring on top talent,” Yi He, co-founder of Binance, told Blockworks
- “The companies that have raised the most capital and have hired the most staff are now realizing they were over-exuberant and are paring back,” one crypto exec said
One day after cryptocurrency firm BlockFi moved to lay off 20% of its staff, over a thousand Coinbase employees woke up to find their workplace access cut and an email informing them they were part of the 18% of staff let go due to tough industry conditions.
“Although I understand that difficult decisions have to be made by companies during these exceptionally challenging economic downturns, the bitter pill doesn’t get any easier to swallow,” Brett Murtagh, former executive assistant at Coinbase, shared on LinkedIn.
This is not the first time Coinbase has taken extreme measures since its reported $430 million loss in this year’s first quarter. The top US crypto exchange announced it would be rescinding job offers just two weeks ago.
“This was devastating to me as I was going to start on a STEM OPT VISA and I am only allowed a certain number of days on unemployment. I had even rejected three PhD offers and declined to interview at other companies since I had accepted Coinbase’s offer in mid-March. All of these other options are no longer available to me,” Ashutosh Ukey said on LinkedIn.
Other prominent crypto companies have laid off employees in recent weeks, too. Gemini, founded by the Winklevoss twins, let go of an estimated 100 employees — roughly 10% of its staff — while Singapore-based cryptocurrency exchange Crypto.com slashed 260 people from its workforce, a 5% reduction.
“The companies that have raised the most capital and have hired the most staff are now realizing they were over-exuberant and are paring back,” Charlie Silver, CEO of Permission.io, told Blockworks. “The early capital went into companies that are all transaction-based, and in a bear market, transactions slow down considerably.”
CB Insights research shows that of the $25.2 billion in venture capital money poured into the crypto market in 2021 the majority was funneled toward exchanges and layer-1 protocols, with a focus on trading, service exchange, investing and crypto-asset lending.
“Way too much capital went into exchanges, layer-1 blockchains, market makers and crypto lenders. I believe we have way too much capacity here. The next wave of capital will go into real-world applications that make crypto easier to use,” Silver said.
Despite the market downturn, Silver believes the crypto industry will continue to grow: “The bear market will not affect the real builders. Price action should not be meaningful to the companies that are building useful applications and are creating valuable infrastructure.”
As layoff announcements become the new normal, many working in crypto are becoming overwhelmingly concerned about job security — but a handful of exchanges have remained positive.
“The crypto space is still in its early stages, and bull markets tend to care more about price while bear markets have more value-conscious teams that continue to build the industry. We see this as a great time to bring on top talent,” Yi He, co-founder of Binance, told Blockworks.
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