Despite the ongoing relief rally in the crypto market, negative news seems to be never-ending. The latest to make it to the headline today is Gemini, as the crypto exchange company has reportedly cut down another 10% of its global staff according to a recent report published by The information citing an internal message.
This latest headcount reduction is the crypto exchange’s third round of lay-offs in the past eight months. Its previous staff cutdown occurred last June following extreme market conditions. The company let go of a tenth of its staff. Weeks later, a report claimed that the company laid off an additional 68 employees, or about 7% of its workforce.
In the internal message disclosed by The Information today, Gemini co-founder Cameron Winklevoss wrote:
(…) it was our hope to avoid further reductions after this summer. However, persistent negative macroeconomic conditions and unprecedented fraud perpetuated by bad actors in our industry have left us with no other choice but to revise our outlook and further reduce headcount.
Gemini is a New York-based cryptocurrency exchange company founded by twins Cameron and Tyler Winklevoss in 2005. The company is backed by $423 million funding and provides crypto-related services, including providing a crypto wallet for storing digital assets.
Gemini’s Painful Months
Over the past months, Gemini has been facing pressure following its engagement with the now-bankrupted crypto lender firm Genesis. A few days ago, the U.S. Securities and Exchange Commission (SEC) charged Gemini over the alleged unregistered offer and sale of securities to retail investors.
In 2020, Gemini and Genesis collaborated to launch a lending program called Gemini Earn. The program allowed Gemini users to lend digital assets to Genesis and earn interest. According to the SEC, Gemini Earn raised billions of dollars worth of crypto assets from hundreds of thousands of investors.
The SEC charges have labeled the program an “offer and sale of securities” that should have been registered with the U.S. regulator. Furthermore, Genesis filed for chapter 11 bankruptcy protection last week, unable to pay back Gemini Earn users their loaned funds. Per Genesis’s bankruptcy filing, the company currently owes Gemini a total of $765.9 million, making Genesis its largest creditor.
The Exodus Series Continues
Gemini is not the only company reducing headcount amid the downtrend in the crypto market. On Jan. 10, Coinbase Global Inc. let go of about 1000 of its staff or about 20% of its workforce, making it the company’s third round of layoffs.
Three days later, popular crypto exchange Crypto.com also announced that it was laying off 20% of its employees. According to Co-Founder & CEO of Crypto.com, Kris Marszalek, part of the company’s decision to reduce headcount includes focusing more on prudent financial management and positioning the company for long-term success over time.
While crypto companies continue to announce layoffs, the crypto market has ignored the negative news. The total cryptocurrency market capitalization recently revisited the $1 trillion benchmark for the first time in months.