Crypto

Cryptocurrency exchanges Coinbase and BlockFi lay off hundreds of employees | CRYPTOCURRENCIES

Cryptocurrency exchanges Coinbase and BlockFi are laying off hundreds of staff members, amounting to a fifth of their workforce, as they struggle to survive the second wave of the ongoing cryptocurrency crash.

Employees of Coinbase, once the leading US cryptocurrency exchange, will learn if they’ve lost their jobs in an email today. Those who have been laid off will be notified on their personal email account, CEO Brian Armstrong said, because their access to the company’s systems will be terminated immediately.

“I realize the removal of access will feel sudden and unexpected, and this is not the experience I wanted for you,” Armstrong said in a letter to staff. “I want to say thank you for giving everything to this company, and I’m sorry. I hope that as we grow again we will have the opportunity to hire you again. We would not be where we are today without your hard work and dedication to our mission. I am incredibly grateful for everything he has done to contribute to our success.”

Questions and answers

What is cryptocurrency?

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Cryptocurrencies are an alternative way to make payments with cash or credit cards. The technology behind this allows ‘money’ to be sent directly to others without having to go through the banking system. For that reason, they are outside the control of governments and are not regulated by financial watchdogs, and transactions can be conducted in a way that keeps you reasonably pseudonymous.

If you own a crypto asset, you control a secret digital key that you can use to prove to anyone on the network that a certain amount of that asset is yours. If you spend it, you tell the entire network that you’ve transferred ownership and use the same key to prove you’re telling the truth. Over time, the history of all those transactions becomes a durable record of who owns what: that record is called a blockchain.

Bitcoin was one of the earliest and largest cryptocurrencies and has been on a wild ride since its inception in 2009, sometimes rising in value as investors piled in, only recently crashing.

Skeptics warn that the lack of central control makes crypto assets ideal for criminals and terrorists, while libertarian monetarists relish the idea of ​​a currency with no inflation and no central bank.

The whole concept of cryptocurrencies has been criticized for its ecological impact, as “mining” new currencies requires large energy reserves and the associated carbon footprint of the entire system.

Richard Partington Y Martin Belam

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Nearly 20% of Coinbase staff will lose their jobs, Armstrong said, totaling around 1,100 employees, even after the company embarked on a hiring freeze that resulted in already-issued job offers being rescinded. .

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Coinbase’s cuts follow those of smaller competitor BlockFi, whose CEO Zac Prince announced a 20% reduction in staff on Monday, affecting some 170 people. “Like many others in technology, we have been affected by the dramatic change in macroeconomic conditions, which has had a negative impact on our growth rate,” Prince said.

While both companies have been hit by the drastic drop in tech valuations, they are also battling a further collapse in the cryptocurrency industry. After a month of stability following the collapse of “stablecoin” Terra, crypto bank Celsius announced on Sunday that it would suspend customer withdrawals after weeks of fears of insolvency, causing a 25% drop in the price of bitcoin and ethereum.

“Due to extreme market conditions, today we are announcing that Celsius will be pausing all withdrawals, redemptions, and transfers between accounts,” the platform said. “We are taking this action today to put Celsius in a better position to meet its retirement obligations over time.”

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