According to the latest report, crypto startup Blockchain.com has joined the list of companies that are cutting down its workforce. The company is letting go 25% of its staff because of the harsh market conditions, which is yet another indication of trouble in the crypto market.
Cutting down staff
On Thursday, Blockchain.com informed its staff that it was reducing 25% of the workforce, which means that about 150 roles would be eliminated. Moreover, the company added that it was closing its office in Argentina and was scrapping its plan of expanding into multiple countries.
The majority of the layoffs affect employees in its Argentinian office, but there are some in the US office that are also affected. About 44% of the workers in Argentina would lose their jobs, 26% of those in the US, and 16% in the United Kingdom.
Impact of 3AC
Blockchain.com is one of the companies that is suffering because of the bankruptcy of crypto hedge fund, Three Arrows Capital (3AC). The collapse of the hedge fund has resulted in problems for a number of firms that were exposed to it in one way or the other.
Earlier this month, the crypto hedge fund filed for bankruptcy and documents have shown that the company owed hundreds of millions of dollars to companies, such as Voyager Digital and Celsius Network.
Since its collapse, the founders of the company have gone underground and are nowhere to be found. Lawyers working for the crypto hedge fund’s creditors have been trying to track them down, but their whereabouts remain unknown. Blockchain.com had also given a loan to 3AC worth $270 million and does not expect to recover the money.
Crypto exchange Coinbase disclosed on Wednesday that it did not have any exposure to Voyager Digital, Celsius, or 3AC for that matter. It had to give clarification because of worries about the financial stability of the exchange.
The crypto market was shaken back in the month of May when the controversial algorithmic stablecoin TerraUSD (USDT) collapsed and took its sister token, LUNA, down with it. This seemed to have a spiral effect on the market and resulted in the downfall of a number of crypto companies, which had made some risky bets with the use of borrowed funds.
Since they were unable to meet requests for redemption due to falling crypto prices, crypto lenders like Voyager and Celsius had first frozen their clients’ accounts. However, the companies subsequently ended up filing for bankruptcy this month.
In addition, the difficult conditions in the crypto market have seen a number of companies also take various measures for keeping their costs down in order to survive. Cutting down their workforce is one of the most common tactics used and Blockchain.com appears to be doing the same.
Some other prominent companies that have also let go of their staff, include the Coinbase and Gemini crypto exchanges, Robinhood, and BlockFi. Blockchain.com is also facing the same problems and is reducing its workforce to cope.