THE CRYPTO CULLING: Thousands of employees get the axe as companies face falling valuations, scandals and legal turmoil

THE CRYPTO CULLING: Thousands of employees get the axe as companies face falling valuations, scandals and legal turmoil

Bitcoin crypto winter

Despite a surge in crypto prices this year, it’s been a tough 2023 for the industry. FTiare/Getty Images

  • Major crypto companies including Crypto.com, Coinbase and Genesis have announced layoffs for 2023.

  • To complicate matters further, the SEC has just filed indictments against two major crypto players.

  • Despite the recent turmoil, the prices of major cryptocurrencies like Bitcoin and Ethereum have surged so far this year.

It’s a cruel, cruel winter for the crypto world.

The new year has barely begun, but so far the pain the cryptocurrency industry has been experiencing in 2022 has shown no signs of slowing down: thousands have received the pink slip and the Securities and Exchange Commission has filed charges against two major players in the industry.

Here is a brief summary of what has already happened:

Two weeks of mass layoffs

Brian Armstrong, the CEO of Coinbase.

CEO Brian Armstrong recently announced that Coinbase would lay off 20% of its workforce. Patrick T. Fallon/Getty Images

In early January, several major cryptocurrency industry companies such as Genesis, Coinbase, Blockchain.com, and Crypto.com announced plans to significantly reduce their workforce. For some of these companies, such as Crypto.com and Genesis, this is the second round of layoffs in a short period of time, after downsizing earlier in the summer due to a decline in cryptocurrency prices.

In this latest spate of layoff announcements, some companies alluded to “ruthless actors,” while others directly addressed the elephant in the room: FTX’s bankruptcy.

Fingerprints from FTX

Sam Bankman Fried

Federal prosecutors have charged Sam Bankman-Fried with fraud, money laundering and campaign finance violationsDavid Dee Delgado/Getty Images

Indeed, the spectacular implosion of Sam Bankman-Fried’s company in November created ripples that are still hurting the industry.

Crypto investors are still unable to withdraw some assets from crypto exchanges like Gemini, and distrust of centralized exchanges is growing among average investors.

legal hurdles

Entrepreneurs Tyler Winklevoss and Cameron Winklevoss discuss Bitcoin on FOX Business' Mornings with Maria TV program on December 11, 2017.

The SEC sued Tyler and Cameron Winklevoss’ company for offering and selling unregistered securities. Astrid Stawiarz/Getty Images

To make the situation even more sensitive, the SEC on Friday accused cryptocurrency firms Genesis and Gemini, founded by the Winklevoss twins of Facebook fame, of unlawfully listing unregistered securities for sale. The charges come after SEC Chairman Gary Gensler was criticized by some investors for failing to protect himself against FTX’s alleged misuse.

The story goes on

While some executives in the crypto world, like the CEOs of Coinbase and Ripple, Have asked For more regulation around crypto trading in the past, the allegations did not go down well with Gemini CEO Tyler Winklevoss, who criticized the SEC’s actions as “completely counterproductive” on Twitter.

Despite the current turmoil in the industry, with some analysts questioning how much more strain the industry can handle, cryptocurrency prices are performing relatively well, with both Bitcoin and Ethereum up double-digit percentages year-to-date.

Read the original article on Business Insider