Two big names in crypto are cutting jobs as the digital currency market continues to spiral downward.
Crypto lending platform BlockFi Inc. said Monday that it will reduce its headcount by about 20%, while digital currency exchange Crypto.com announced a 5% cut on Friday.
The layoffs are yet another sign of trouble for the once white-hot crypto industry. Celsius, another top crypto lending platform, said Sunday that it was pausing withdrawals, swaps and transfers following weeks of speculation that it would be unable to pay out the significant returns promised on its products.
Earlier this month, crypto exchange Gemini Trust Co. said it plans to slash 10% of its staff and Coinbase Global Inc. also announced that it is rescinding job offers and freezing hiring.
The crypto market plummeted after the implosion of the TerraUSD stablecoin in May and several coins are trading significantly lower. At the moment, the price of Bitcoin is just under $24,000, representing a 20% drop over the last 30 days.
BlockFi founders Zac Prince and Flori Marquez said in a blog post that “market conditions that have had a negative impact on our growth rate” drove their decision to make the job cuts. Based in Jersey City, N.J., the company has more than 850 employees and is laying off more than 200 workers, dropping its headcount to arround 600 employees.
In a tweet Monday announcing the layoffs, Prince, who is the company’s chief executive officer, said that the company is committed to sticking around for the long haul.
“Our clients will not experience any material changes to the quality of service they have come to expect, their funds are safeguarded, and all platforms and products continue to operate normally,” he said.
The crypto lending platform is also looking to secure fresh funding at a reduced valuation of $1 billion, after being previously valued at $3 billion. The lower valuation is another sign of cooling interest from venture capitalists who poured billions of dollars into the crypto industry over the past two years.
BlockFi hit another speed bump this year, when the company agreed to pay $100 million in penalties following the US Securities and Exchange Commission’s allegations that it was selling its crypto lending product as an unregistered security.
The company declined to comment beyond what had already been posted by its executives.
Meanwhile, Crypto.com, which is headquartered in Singapore, also announced layoffs of about 260 staff, or 5% of its workforce. Chief Executive Officer Kris Marszalek tweeted Friday that the company made the “difficult and necessary decisions” to optimize for profitability and sustainable growth during a market downturn.