Crypto.com Lays off 20% of Workforce Amid Market Downturn, FTX Collapse

On January, Friday the 13th, the Singapore-based cryptocurrency exchange Crypto.com, established in 2016, disclosed that it would be laying off 20 percent of its workforce.

Available data suggest that Crypto.com has 2,450 employees, and this move indicates that the company will terminate around 490 of them.

Weathering Impact of FTX Collapse

In a blog post, CEO Kris Marszalek stated that the cryptocurrency exchange grew "ambitiously" but could not weather the controversial implosion of Sam Bankman-Fried's crypto firm FTX.

The recent market downturn has severely impacted the cryptocurrency sector, forcing numerous exchanges and lenders to reduce their workforce drastically.

The failure of FTX and the subsequent wave of crises have sped up this process. According to Marszalek, the reduction is part of Crypto.com's ongoing commitment to "prudent financial management."

Based on a CNBC report, Crypto.com, like FTX, entered into high-profile sponsorship and promotion deals, including a Christmas day naming agreement for the former Staples Center in 2021 worth $700 million over 20 years.

A Rough 2022

The crypto firm struggled in 2022 due to numerous mishandled transfers and high-profile blunders that led to the firing of some employees.

In a series of unfortunate events, Crypto.com has had a rough start to 2022. In January, the company faced a cyber attack that accessed several users' accounts. This incident was a significant setback for the company and its user base, as it put their personal and financial information at risk.

In June, Crypto.com and other companies in the industry, including BlockFi, decided to remove 260 of their employees from their tenure due to the market crash and bearish sector.

The company's woes continued in August when Crypto.com accidentally released $7.2 million to an Australian customer instead of sending a refund of USD 68 or $100 AUD.

While the customer was pleased with the mistake, it was a major embarrassment for Crypto.com and added to their already troubled year.

What's Next?

Amidst these recent setbacks, Marszalek is still upbeat about the company's future. "We have a significant year ahead of us as we continue to help restore trust in our industry," he wrote in a statement.

The cryptocurrency market is a highly volatile and unpredictable industry, and for crypto platforms to survive, they need to adjust to the market's ever-shifting conditions.

The recent downturn in the market has caused many companies to cut their overhead costs, and the layoffs at Crypto.com are no exception to this trend.

Even though it is unfortunate for the workers who have been affected, the company may need to make this move to maintain its financial stability and continue to grow in the years to come.

There have not been any employees coming out to comment on the incident.

Marszalek established Crypto.com in 2016, which by 2021 is expected to generate at least $1.2 billion in revenue, according to several reports.

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