Sebastian Sinclair

<div id="highlights-block_62996c8b37590" class="highlights">
 <ul>
 <li>Coinbase is the latest crypto giant to join the ranks of others seeking to cut costs to operations</li>
 <li>The exchange provider is citing macroeconomic factors and a shrinking crypto market as reasons for its move</li>
 </ul>
 
</div>



Coinbase said Thursday it was pausing hiring efforts and rescinding a number of accepted employment offers as it squares off with challenging macroeconomic conditions and a downturn in the crypto market.



In a <a href="https://blog.coinbase.com/update-on-hiring-plans-bcedfa634989" target="_blank" rel="noreferrer noopener">company post</a> penned by Chief People Officer L.J. Brock, Coinbase has decided to take more &#8220;stringent measures&#8221; to slow its headcount growth in hopes of navigating uncertain waters.



The exchange provider joins a growing number of crypto companies pursuing similar cost-cutting measures amid shrinking profit margins and capital.



Also Thursday, Winklevoss-founded <a href="https://cms.blockworks.co/gemini-joins-growing-list-of-crypto-exchanges-cutting-staff-amid-downturn/" target="_blank" rel="noreferrer noopener">exchange Gemini</a> said it was axing 10% of its staff, citing crypto&#8217;s current “contraction phase” that’s now “settling into a period of stasis.” In April, Seychelles-registered exchange BitMEX also did away with roughly a quarter of its workforce, while Latin America’s Bitso shed 11%.



Alongside the hiring freeze, Coinbase said it would rescind offers previously granted to &#8220;talented people&#8221; yet to start their positions with the company, offering a &#8220;severance philosophy&#8221; to offset financial loss.



&#8220;On our Q1 earnings call, we discussed that headcount and a variety of other expenses are the key ways for us to manage our costs,&#8221; Brock said in the post. &#8220;While we did not make this decision lightly, it is the prudent one given market conditions.&#8221;



The executive also said that while Coinbase always knew crypto would be volatile, current conditions coupled with &#8220;larger economic factors&#8221; may yet test the company and its personnel.



While market downturns are not uncommon — the industry most recently experienced similar conditions in 2018 through to 2020 — the current slump of capital inflows and investor sentiment has forced companies to pause and consider.



Coinbase, Brock said, is hoping to weather the storm by remaining flexible and resilient in the face of uncertainty.



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Coinbase Latest Crypto Firm To Cut Costs Amid Market Downturn

David Canellis

<div id="highlights-block_6298e0238c487" class="highlights">
 <ul>
 <li>Gemini raised venture capital funds as recently as February, but it still hasn’t dodged the slump</li>
 <li>Crypto exchanges BitMEX, Buenbit, Bitso have all cut staff in recent months</li>
 </ul>
 
</div>



Gemini, the crypto firm founded by ‘first bitcoin billionaires’ Tyler and Cameron Winklevoss, is cutting 10% of its staff.



In a Tuesday memo sent to Gemini employees, the twins cited the ongoing crypto downturn alongside macroeconomic and geopolitical factors as reasons for the downsize, reported <a href="https://www.bnnbloomberg.ca/winklevoss-twins-gemini-slashes-staff-10-on-crypto-slump-1.1773654" target="_blank" rel="noreferrer noopener">Bloomberg</a>.



The Winklevosses referred to the current crypto climate as a “contraction phase” that’s now “settling into a period of stasis,” a point in the market cycle which has come to be known as “crypto winter.”&nbsp;



Bitcoin and ether are respectively down 37% and 51% in the year to date. Crypto’s total market capitalization has fallen for the past eight weeks in a row — from around $2.13 trillion to $1.23 trillion.



Gemini has several operational components, including crypto exchanges (both retail and institutional), custody services and over-the-counter trading. Its physical offices are closed today, and staff affected by the layoffs are to receive calendar invites for remote meetings to discuss separation packages (including healthcare benefits), according to Bloomberg.&nbsp;



The New York-headquartered company will reportedly hold a larger meeting Friday to discuss its future. There’s no word on exactly how many staff members will lose their jobs; LinkedIn ranks Gemini’s headcount at a little more than 1,000. 



The news of layoffs also comes on the same day as the US Commodities Futures and Trade Commission <a href="https://www.reuters.com/legal/transactional/us-cftc-sues-crypto-exchange-gemini-over-misleading-statements-2017-2022-06-02/" target="_blank" rel="noreferrer noopener">suing</a> Gemini for allegedly misleading regulators over potential risks associated with bitcoin futures contracts the firm had hoped to launch in 2017.



Gemini most recently raised funds in February, according to <a href="https://www.crunchbase.com/organization/gemini-99b2" target="_blank" rel="noreferrer noopener">Crunchbase</a>, a private round contributed by Tim Draper co-founded venture capital fund Draper Dragon. Before that, a $400 million round led by hedge fund Morgan Creek Digital <a href="https://www.reuters.com/markets/funds/crypto-startup-gemini-valued-over-7-bln-after-latest-fundraise-2021-11-18/" target="_blank" rel="noreferrer noopener">valued</a> Gemini at $7.1 billion.



The cuts come despite a recent string of venture capital raises in the space, including Andreessen Horowitz’s <a href="https://cms.blockworks.co/andreessen-horowitz-launches-largest-crypto-fund-ever/" target="_blank" rel="noreferrer noopener">mammoth</a> $4.5 billion fund. Still, considering the flurry of layoff announcements over the past month, the ecosystem could soon see more cuts.



Gemini is not the first to lay off staff this year. In April, crypto derivatives platform BitMEX <a href="https://www.coindesk.com/business/2022/04/04/crypto-exchange-bitmex-lays-off-75-workers/" target="_blank" rel="noreferrer noopener">shed</a> 75 employees (about a quarter of its workforce); Argentinian exchange Buenbit let go 80 employees — almost half of its roster — while Latin America’s Bitso also let go of 80 employees, representing 11% of its personnel.



While not strictly a crypto exchange, discount brokerage Robinhood (which has its own crypto division), also <a href="https://techcrunch.com/2022/04/26/robinhood-to-lay-off-9-of-full-time-employees" target="_blank" rel="noreferrer noopener">laid</a> off 9% of its full-time employees in April, which is estimated to have been around 300 people. The crypto industry saw similar widespread downsizing throughout its previous crypto winter spanning 2019 and 2020.



The growing wave of layoffs hasn’t quite made its way to Coinbase, although <a href="https://techcrunch.com/2022/05/17/coinbase-backtracks-hiring-plans-crypto-market-turmoil/" target="_blank" rel="noreferrer noopener">reports</a> surfaced last month indicating that the top US exchange would freeze hiring for two weeks and enforce cost-cutting measures after <a href="https://cms.blockworks.co/coinbase-stock-plummets-as-crypto-exchange-posts-430-million-loss/" target="_blank" rel="noreferrer noopener">posting lackluster earnings</a> in May. 



On Thursday, Coinbase <a href="https://cms.blockworks.co/coinbase-latest-crypto-firm-to-cut-costs-amid-market-downturn/" target="_blank" rel="noreferrer noopener">extended</a> its hiring freeze indefinitely and said it would rescind a number of accepted offers.



This story was updated at 2:38pm ET on June 2 2022 with details of the CFTC&#8217;s lawsuit against Gemini, and again at 6:05am ET on June 3 2022 to include Coinbase&#8217;s latest statement.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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