Payments provider Affirm to sunset crypto program after 19% staff cut

February 9, 2023 Coin Telegraph

Affirm

Users will not be able to buy Bitcoin after Mar. 2, and the “Affirm Crypto Program” will officially shut down on Mar. 31.

Max Levchin, the CEO of buy-now-pay-later company Affirm, has confirmed that they will be shutting down their “Affirm Crypto Program” amid dampening consumer spending and a changing macroeconomic environment.

The CEO released a letter to shareholders on Feb. 8 alongside a 19% staff cut. He cited uncertain macroeconomic conditions and the need to offset some liabilities on the firm’s balance sheet as the two main reasons behind the decision:

“In a period of increased economic uncertainty, we are doubling down on our core businesses, delaying projects with less certain revenue timelines, and aligning our operating expenses with revenue. Concurrent with reducing our workforce, we are sunsetting several initiatives, such as Affirm Crypto.”

The firm’s chief financial officer Michael Linford said the decision was made to meet profitability goals.

“We have taken decisive actions to reduce expenses. We believe our cost base is now appropriately sized to meet our profitability goals while still supporting our product roadmap and long-term growth ambitions,” he said.

Affirm is a millennial-facing payments service provider similar to Afterpay which allows customers to purchase a product online and pay later.

The firm launched the “Affirm Crypto Program” in late 2021 near crypto’s market peak when it partnered with Bitcoin payments platform NYDIG to process Bitcoin (BTC) transactions and provide a crypto account for Affirm users.

The program enabled users to set up a scheme where monthly interest accrued from a user’s savings account would be automatically converted into BTC.

However, Affirm noted its cryptocurrency program will officially close on Mar. 31, according to the Affirm website:

“On March 2, 2023, the ability to purchase bitcoin through the Affirm app will end. We will be discontinuing the Affirm Cryptocurrency Program on March 31, 2023.

“Any bitcoin in your account when the program ends will be sold at CME CF Bitcoin Reference Rate (BRR) as of 4:00 p.m. London Time, and the sale proceeds will be deposited into your Affirm Savings account,” the note added.

*As of Mar. 2, Affirm users will no longer be able to buy Bitcoin. Source:* *Affirm.*

The shutdown is of course a part of a larger staff cleanout for the San Francisco-based lending platform. Levchin said the 19% reduction in its workforce took effect today.

In a Feb. 8 note to employees, Levchin shouldered the blame by stating that he acted too slowly to actions from the U.S. Federal Reserve:

“Everything changed in mid-2022. Over the last three quarters, the Fed increased its benchmark rate at an unprecedented pace. This has already dampened consumer spending and increased Affirm’s cost of borrowing dramatically. The root cause of where we are today is that I acted too slowly as these macroeconomic changes unfolded.”

Approximately 2,593 individuals claim to be employed at Affirm, according to current figures from LinkedIn.

This means about 500 people were likely impacted by today’s announcement.

Cointelegraph reached out to Affirm to find out how many employees related to its crypto initiative were impacted, however, no additional information was shared.

The CEO did however state in the letter that he expects to keep the current headcount to remain essentially flat for the foreseeable future.

The price of Affirm’s stock, tickered AFRM, has fallen 19.1% in after-hours trading in the NASDAQ, according to Google Finance.

Crypto firms cut nearly 3,000 jobs in January despite Bitcoin’s rise

January 31, 2023 Coin Telegraph

Bear Market

It was a tough month for crypto employees with at least 14 firms announcing staff reductions in January.

Crypto companies tightened their purse strings in the first month of 2023, with at least 2,900 crypto staff cut loose across 14 crypto firms in January.

The latest firm to reportedly initiate a layoff is the crypto infrastructure provider Prime Trust which reduced its employee count by a third according to reports.

The reduction would equate to an estimated 100 or so staff cut as Prime had 312 employees on LinkedIn at the time of writing.

Other recent cuts over the last few days include 30 staff from the crypto platform Matrixport being let go according to a Jan. 27 Bloomberg report, while an earlier Jan. 23 report from The Information said roughly 100 staff were laid off from the crypto exchange Gemini.

The largest staff layoff for the month of January was initiated by crypto exchange Coinbase which reduced its headcount by around 950 employees on Jan. 10.

Its peer exchanges Crypto.com, Luno and Huobi trailed with reductions of around 500, 330 and 320 employees respectively.

Embattled crypto conglomerate Digital Currency Group (DCG) and its subsidiaries similarly saw significant layoffs with 485 workers sacked in January alone as the firm navigates a financial crisis.

The DCG-owned Luno saw the most layoffs, while DCG itself slashed 66 employees, its subsidiary lending platform Genesis cut 63 jobs and its asset management firm HQ Digital shuttered affecting 26 jobs.

Rounding off the list were the 200 members of staff let go by crypto bank Silvergate, the 110 employees cut from the Blockchain.com exchange and the 96 staff terminated from MetaMask’s parent company ConsenSys.

Meanwhile, 20 staff members were let go from the nonfungible token (NFT) marketplace SuperRare.

These staff cuts came despite Bitcoin (BTC) performing strongly in the month, targeting nearly $25,000 as institutional demand has continued to increase.

However, the large-scale crypto industry layoffs were not in isolation. Around 48,000 people in January alone were let go from just four companies: Google, Amazon, Microsoft and Salesforce.

While some may believe there's more gloom ahead, crypto hedge fund Pantera Capital believes there’s never been a better time to start a blockchain company claiming bear markets provide “less noise and distraction from building.”

Crypto.com CEO announces 20% staff cut, ‘did not account’ for FTX collapse

January 13, 2023 Coin Telegraph

Coin Telegraph

"While we continue to perform well, growing to more than 70 million users worldwide and maintaining a strong balance sheet, we’ve had to navigate ongoing economic headwinds. "

The co-founder and CEO of Crypto.com, Kris Marszalek, has announced a new wave of staff layoffs that will reduce its global workforce by another 20%, citing poor market conditions and "recent industry events."

"Today we made the difficult decision to reduce our global workforce by approximately 20%," Marszalek said in a company update on Jan. 13.

As I shared with the team today, while we continue to perform well, market conditions and recent industry events have made this the right decision for the company at this time.
— Kris | Crypto.com (@kris) January 13, 2023

"All impacted personnel have already been notified. These reductions were in no way related to performance, and we extend our deepest gratitude for all their contributions to Crypto.com."

Marszalek said several factors influenced their decision, including "ongoing economic headwinds and unforeseeable industry events." This was despite the crypto exchange growing to more than 70 million users worldwide.

"We grew ambitiously at the start of 2022, building on our incredible momentum and aligning with the trajectory of the broader industry. That trajectory changed rapidly with a confluence of negative economic developments."

The crypto exchange announced staff layoffs in June 2022, leading to 5% of its corporate workforce being laid off, affecting approximately 260 people.

Marszalek said the layoffs last year positioned it to weather the macro economic downturn, but it did not account for the collapse of crypto exchange FTX in November 2022, which he said "significantly damaged trust in the industry."

"It’s for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success."

Only days earlier, crypto exchange Coinbase announced on Jan. 10 that it was cutting 950 jobs as part of the company’s measures to reduce operating costs by around 25% amid the ongoing crypto winter.

Other crypto exchanges to announce layoffs in the last month include Kraken, Swyftx and Huobi.

SuperRare cuts 30% of staff as growth slows during crypto winter

January 7, 2023 Coin Telegraph

Coin Telegraph

Despite only being a week into the new year, SuperRare adds to a number of firms announcing staff cuts such as Huobi and Genesis.

Non-fungible token (NFT) marketplace SuperRare has announced a 30% staff-member cut as CEO John Crain explained that the firm mistakenly over-hired during the last bull market.

In a Jan. 7 tweet, Crain shared a screenshot of his message to SuperRare’s Slack channel announcing the 30% cut, stating that he had “some tough news to share.”

“Startups are a balancing act of managing rapid growth while doing everything possible to conserve limited resources. During the recent bull run, we grew in tandem with the market” he noted, adding that:

“In recent months it’s become clear that this aggressive growth was unsustainable: we over-hired, and I take full ownership of this mistake.”

I have some tough news to share: pic.twitter.com/iLDKqgyhQa
— SuperRare John (@SuperRareJohn) January 6, 2023

Crain didn’t outline specifically what sort of redundancy packages the terminated employees will receive, but noted that the firm will “do everything we can to help them transition to new opportunities and support them in future endeavours.”

SuperRare is one of the biggest names in the space, but notably sees significantly less trading volume than competing NFT marketplaces such as OpenSea and Magic Eden.

According to data from DappRadar, SuperRare oversaw $663,000 worth of trading volume over the past 30 days, compared to OpenSea’s 30-day trading volume of $307 million and Magic Eden’s $80.1 million.

This is due in part to SuperRare’s model which is more focused on art, the artist community and single-edition NFT artworks as opposed to the computer-generated avatar model bearing thousands of tokens in a single collection, which is popular on OpenSea and Magic Eden.

Moving forward, Crain outlined that despite a slowing of growth during the crypto bear market, SuperRare is still focused on pushing on with its initial vision of opening up greater access and exposure to digital artists.

“We are facing headwinds, yes — but there remains an incredible uncaptured opportunity as we continue building something totally new: a global digital art renaissance that is transparent, fair and that anyone can access from anywhere in the world,” he concluded.

The hefty staff cut from SuperRare adds to a wave of blockchain and crypto firms that have shed staff during crypto winter, with Cointelegraph reporting on at least six companies doing so since early December 2022 alone.

In terms of the most recent companies to decrease head counts, it was reported on Jan. 5 that crypto lender Genesis laid off 30% of its staff, while the reportedly troubled crypto exchange Huobi also announced a 20% cut on Jan. 6.

A report from The Wall Street Journal this week also indicated that U.S. bank Silvergate cut 40% of its staff as a result of an $8.1 billion bank run that was triggered in response to the FTX collapse in November.

Swyftx cuts 40% of staff as it braces against ‘worst-case scenario’

December 5, 2022 Coin Telegraph

Alex Harper

The Australian crypto exchange said while it had no exposure to FTX, it was "not immune" to its fallout.

Australian-based crypto exchange Swyftx has laid off a total of 90 staff members, which it said was in preparation for a “worst-case scenario” caused by the fallout of FTX and a potential fall in global trading volumes next year.

The news was shared by Swyftx co-CEO Alex Harper in a Dec. 5 statement, noting that despite not having any exposure to FTX, the company was “not immune” to the fallout over the bankrupt exchange, adding:

“As a result, we have to prepare in advance for a worst-case scenario of further significant drops in global trade volumes during H1 next year and the potential for more black swan-type events.”

A Swyftx spokesperson told Cointelegraph that the 40% staff cut was also in anticipation of a fall in trading volumes, despite these figures increasing in November.

“We have let go of staff in expectation of a potentially sharp fall in global trade volumes in the first half of 2023 and further aftershocks from FTX’s collapse," said the spokesperson.

Harper in the statement said the tough decision was necessary in order to get through the prolonged crypto winter:

“Our business is uniquely well-positioned to weather events like FTX [...] But as much as we might wish it, we do not exist in isolation from the market and that’s why we are acting fast and acting early by significantly reducing the size of our team.”

The Swyftx spokesperson reiterated that the company’s balance sheet remained intact despite it being indirectly affected by the FTX collapse, adding:

“Just for clarity, I should say we have no exposure to FTX. We hold customer funds 1:1 and don’t lend customer assets to third parties.”

Harper also revealed that his company would become more risk-averse in its business decisions and that the staff cuts would ease operational costs on its balance sheet.

“Swyftx maintains strong revenue but we’re not willing to take any risks post-FTX and are being exceptionally cautious about costs next year,” added the spokesperson, who also noted that priority areas like security, compliance and customer support services wouldn’t be affected.

As for who was laid off, a Swyftx spokesperson told Cointelegraph that the firm’s research and development team was most affected by the staff cuts.

The latest staff layoffs follow another wave of layoffs in Aug. 2022, which saw 74 employees leaving the firm, accounting for 21% of its staff at the time.

In August, Harper said the company “grew too fast” in 2021 when the market peak, but “we are simply far larger than we need to be to operate and grow.”

Digital Surge halts withdrawals

Meanwhile, another Australian-based trading platform Digital Surge, which halted withdrawals on Nov. 16, has been another company in Australia impacted by the FTX contagion.

The crypto exchange confirmed on Nov. 16 that it has suspended deposits and halted withdrawals, promising customers they’d give more details within two weeks.

However, as at the time of writing, the company has yet to provide any further information publicly.

Cointelegraph has reached out to Digital Surge for comment but has not received an immediate response.

Crypto.com gets nod in Dubai and FTX launches in Japan

June 3, 2022 Coin Telegraph

Acquisition

Crypto.com will have further requirements before its full license is granted in the “near-term” and FTX said the move would allow it to work “directly with Japanese regulators.”

Two out of the top 10 largest cryptocurrency exchanges by volume will expand into new markets, with Crypto.com obtaining a provisional crypto license in Dubai and FTX launching in Japan.

Crypto.com announced on June 2 that the Dubai Virtual Assets Regulatory Authority (VARA) provided the exchange with provisional approval of its Virtual Asset License giving the company the go-ahead based on initial compliance checks.

The exchange said that VARA will carry out further due diligence and other mandated requirements before its full operating license is issued which it expects to happen in the “near term”

Crypto.com said in March it would create a regional office in the United Arab Emirates (UAE) largest city after it enacted new laws for crypto and created VARA with the goal of making Dubai a global hub for crypto.

The UAE Minister of State for Foreign Trade, Dr Thani Al Zeyoudi said in the announcement the country believes “cryptocurrencies, virtual assets and blockchain will revolutionize the financial services sector.” He added it's “attracting companies to the UAE to build on this vision and enable technologies of the future to flourish here.”

FTX Japan launches

FTX — which has overtaken Coinbase to become the second largest centralized exchange in terms of volume — has launched FTX Japan to service its Japanese customers after it acquired the local Liquid crypto exchange in February.

Japan has strict rules for crypto exchanges wanting to operate in the country with the commissioner of crypto regulator the Financial Services Agency (FSA) even admitting it makes things “rather tough” for exchanges.

FTX CEO Sam Bankman-Fried said that “Japan is a highly regulated market with a potential market size of almost $1 trillion” for crypto trading.

The expansions are in stark contrast to other major crypto firms that are are having to cut staff due to the ongoing bearish conditions.

Gemini exchange reportedly plans to cut 10% of its employees due to the unfavorable market conditions, Coinbase also announced in mid-May its slowing hiring to ensure it can weather the dampened market.

At the end of April the crypto-friendly trading platform Robinhood fired 9% of its workforce with its stock price at an all-time low as part of a wider market downturn.

staff cut

Digital Surge halts withdrawals

FTX Japan launches

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