BlockFi, a cryptocurrency lender that just closed a $400 million loan and possible purchase conditions with cryptocurrency exchange FTX, is providing staff buyouts as a covert means to cut down on manpower. One month after reducing its workforce by 20%, the change was made.
BlockFi Offers COBRA
According to a BlockFi employee, the company is giving workers 10 weeks of paid time off and 10 weeks of COBRA, or Consolidated Omnibus Budget Reconciliation Act, health insurance, in exchange for their resignation. The insider also said that the business had convinced workers that they would be entitled for unemployment benefits if they agreed to the buyout.
The company said in June that it was “roughly” decreasing its headcount by 20%. BlockFi has reduced staff, joining other US bitcoin exchanges Gemini, Coinbase, and Crypto.com. A number of exchanges in Latin America have also disclosed layoffs.
A company spokesperson said:
“BlockFi initiated a voluntary separation program to right-size our organization for the current market environment. This is not an action we took lightly and want to ensure that employees have resources to consider the decision that is right for them.”
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Everything Is Fine
Since signing the contract with Sam Bankman-Fried’s FTX on July 1, CEO Zac Prince has insisted that everything at BlockFi is going according to plan.
BTC/USD rise above $20k. Source: TradingView
Indeed, Prince asserted last week that the company shouldn’t be compared with its bankrupt former rivals, brokerage business Voyager and lender Celsius. Additionally, he hinted that the corporation has “exciting stuff in the pipeline” and indicated that interest rates had increased in July.
BlockFi is fully functional across all products (credit card, loans, trading, earning interest), no client losses, raised interest rates in July
And we have exciting stuff in the pipeline ?
— Zac Prince (@BlockFiZac) July 11, 2022
The following day, he tweeted in response to Pantera Capital CEO Dan Morehead, who had done the same in response to a Wall Street Journal article that said decentralized finance “has an existential problem.”
Morehead referred to BlockFi as a “centralized finance firm” in his blog article. Morehead asked Prince about Celsius and Lehman Brothers, the international financial services company that failed in 2008 due to its reliance on securities backed by subprime mortgages that went into default. Prince responded, “They were/are bankrupt or insolvent – we are not.”
However, Prince struck a more amicable tone this month when the company announced layoffs.
Featured image from Getty Images, charts from TradingView.com