The deteriorating macroeconomic climate and the collapse of industry giants like FTX and Terra have weighed on the price of bitcoin this year.
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Cryptocurrency exchange Luno is the latest company in the industry to lay off, moving to cut 35% of its global workforce.
The London-based company’s CEO, Marcus Swanepoel, informed employees of the layoffs at 12pm London time on Wednesday in a livestreamed town hall.
“2022 has been an incredibly challenging year for the tech industry at large and the crypto market in particular,” the company said in a statement shared with CNBC on Wednesday.
“Unfortunately, Luno has not been immune to this turbulence, which has affected our overall growth and revenue numbers.”
Luno has a total workforce of around 960 people, according to its LinkedIn profile, which means more than 330 jobs will be affected.
The cuts particularly affect Luno’s marketing teams. A spokesperson for Luno told CNBC that the layoff measure would have “minimal or no impact on key operations and compliance teams.”
Luno, which has offices in Africa, Southeast Asia and Europe, is part of the crypto conglomerate Digital Currency Group.
DCG is one of many crypto firms caught in the fallout from the collapse of FTX, formerly one of the largest crypto exchanges in the world. Genesis, DCG’s lending unit, filed for bankruptcy last week.
Genesis’s bankruptcy filing came after a standoff with one of its peers, Gemini, over a disputed loan deal that generated rich returns for Gemini customers through the high-yield loan product of Gemini, Gemini Earn.
Gemini customers have $900 million stored on Gemini Earn. The service halted withdrawals after Genesis, which lends the funds to large institutional borrowers, halted customer redemptions.
The crypto industry has been mired in a downturn known as “crypto winter” since the collapse in May last year of controversial algorithmic stablecoin terraUSD. The Federal Reserve’s higher interest rates also spooked market participants.
About $2 trillion in value has been wiped from the overall crypto market since the peak of the crypto boom in November 2021 – although bitcoin has rebounded a bit since the start of the year.
The failure of TerraUST, coupled with a sharp decline in digital currency prices, sparked a cascade of other crypto failures, including Three Arrows Capital, Voyager Digital, FTX, BlockFi, and Genesis.
In a statement shared with employees on Wednesday, Luno’s Swanepoel said the industry had experienced a “series of shocks” that led to a constrained funding environment and a move toward long-term profitability.
“While we anticipated a downturn and proactively planned with a business and funding model that could withstand some of these factors, the scale and speed of it all, and all of it at the same time, has put a strain on test our original plan,” Swanepoel said.
“What this means in practice is that in addition to streamlining our strategy to focus on our core strengths, we also need to significantly reduce our cost base – which includes employee headcount across all of our markets – to that we are ready for success for the future.”