BlockFi is shrinking 20% ​​of its workforce as bitcoin falls – Reuters

BlockFi cryptocurrency provider is shrinking by about 20% in its workforce, as the company has a dramatic slowdown in digital currencies and a growing concern for a weakened economy.

CEO Zac Prince dit in a tweet Monday that BlockFi was hit by the “dramatic change in macroeconomic conditions,” which had a “negative impact” on growth.

With the support of venture capitalist Peter Thiel, BlockFi has grown dramatically in recent years, benefiting from low borrowing costs and rising cryptocurrency prices. Prior to the last cuts, the company went from 150 employees by the end of 2020 to more than 850.

BlockFi, which offers a popular savings product that allows customers to earn interest on their holdings in digital currency, has raised more than $ 957 million since its launch in 2017 and aimed at a valuation of nearly $ 5 billion. dollars. Last year. However, industry publication The Block reported last week that the company was in the process of raising a round to the bottom with a valuation of about $ 1 billion.

General cryptocurrency companies are looking for ways to reduce costs as investors move away from riskier assets, reducing trading volumes. Bitcoin has fallen nearly half this year after falling 15% on Monday, while Ethereum lost two-thirds of its value in 2022, falling 16% earlier in the week. The cryptocurrency market has fallen below $ 1 trillion from a high of $ 3 trillion in November 2021. recently announced a downsizing of 260 people, as did Gemini, who said it would lay off 10% of its workforce, a novelty for the exchange and custodian of U.S.-based cryptocurrencies. Meanwhile, Coinbase has extended its hiring break for the “foreseeable future” and plans to terminate some vacancies.

Celsius, another cryptocurrency provider, has just suspended all withdrawals and transfers between accounts, given “extreme market conditions.” Celsius has lent more than $ 8 billion to its customers, making it one of the largest players in the crypto lending space.

BlockFi publicly distanced itself from Celsius in a tweet on Monday, announcing that it “has no exposure to Celsius” and “had never worked with them as a partner.”

Prince said BlockFi’s main goal is to “achieve profitability” and that the company is “here in the long run”.

In addition to job cuts, the platform is also reducing marketing spending, eliminating non-critical salespeople, reducing executive compensation and slowing staff growth, according to a blog post by co-founders Prince and Flori Marquez.

Prince said customers would not be affected by the cuts.

“Customers will not experience any material changes in the quality of service they have expected, their funds are protected and all platforms and products continue to operate normally.” Prince tweeted.

While this may reassure people who have entrusted their money to the company, BlockFi is under greater scrutiny from regulators.

In February, the company agreed to pay a $ 50 million fine to the U.S. Securities and Exchange Commission, plus an additional $ 50 million in fines to 32 states for settling similar charges related to its cryptocurrency accounts.

WATCH: The crypto market has not yet bottomed out

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