More platforms will bite the dust?

[bbc.reporter]

There are people in social media that have warned to be cautious with platforms that offer high APY and those platforms that have laid off employees from jobs in their companies.

Kraken, Coinbase, Crypto.com and Bybit did the biggest layoffs for exchanges this year according to the data in this spreadsheet which was created by Wublockchain.



Source https://docs.google.com/spreadsheets/u/0/d/1xUELawoXnmkJH2G_M8JIVtRbXI-Q9gB8jkdW4NmYWrI/htmlview

[1714910540]

1714910540

[1714910540]

1714910540

[1714910540]

1714910540

[1714910540]

1714910540

[mk4]

It's not farfetched to think that there's some platforms that are also insolvent, but just currently not exposed.

I wouldn't make conclusions based solely off layoffs though, since exchanges tend to earn a lot less in bear markets in the first place — regardless if solvent or insolvent.

[LordShanken]

Coinbase

From what is shown in this table, Coinbase made statistically the smallest layoffs.. 

BTW - From my research, Coinbase and USDC are the safest on the market right now. But of course everyone can have a different opinion.

[Rikafip]

There are people in social media that have warned to be cautious with platforms that offer high APY and those platforms that have laid off employees from jobs in their companies.

While high APY is definitely a huge red flag even before everything that has happened in the last six months (are there even any platforms left that offer ~10% like Celsius did ?), I don't think that exchanges laying off people is something to worry about. It even makes sense as crypto businesses (and not just them) tend to hire/lay off based on the market conditions and since we are deep into bear market that may last for a couple years and you have to cut your expenses in order to survive.

Regarding your question in the title, I wouldn't be surprised if some platforms from that list you shared go under. Anyone that still has money on any of the platforms is simply asking for trouble.

[o_e_l_e_o]

More platforms will bite the dust?

I have absolutely zero doubt more platforms will go. And not just small ones most people haven't heard of, but some more "big name" ones like BlockFi.

I wouldn't make conclusions based solely off layoffs though, since exchanges tend to earn a lot less in bear markets in the first place — regardless if solvent or insolvent.

This is true, but it does reveal poor business management and poor future planning. Bitcoin is volatile. Everyone knows that. To be running a business based on bitcoin and be so unprepared for bitcoin to be volatile that you have to start firing people suggests to me that you don't really know what you are doing. Certainly not the kind of people I would trust to look after my money for me.

BTW - From my research, Coinbase and USDC are the safest on the market right now.

Your own wallet is the only safe place for your coins right now.

[DaveF]

The layoffs have been discussed in several other threads and probably have very little to do with how the platform is doing in general.
One of my replies from months ago about it:

There is a difference between 'financial problems' and "the market has changed we don't need you anymore and the even larger profits are down (or negative)" so it's time to reduce headcount. As I posted elsewhere many tech businesses don't do layoffs when they are doing well. It's the keep them around just in case we need them mentality. In this bear market, you can't just keep some people.

I know someone who was just let go from Gemini. As she put it: Now she gets to spend the summer living off her severance package while doing nothing. As opposed to getting her regular paycheck to do nothing. The project her group was working on ended sometime in late 2021 with the deployment in early 2022. For the last 3 months she joked that her job was head youtube video watcher. So them letting those people go was not a surprise to any of them. BUT had this been a bull market they probably would still be there waiting for the next project while watching videos.....

Laying people off may or may not be an indicator of financial issues. But, it's usually not a good one specifically in the tech and financial markets. And lets face it, exchanges are more or less in both of those. They keep people that may or may not be needed just in case, and they do massive hiring to get things done 'yesterday'.

-Dave

[stompix]

I doubt a bit numbers there, Compass mining is having just 80 employees and they have like 75 specialists on their "about us" page. Plus with all their location it would be simply impossible to run that with just 80, especially since they deal with a lot more stuff. Some of them might have subsidiaries as FTX had.

Also, two things:

2TM   Crypto Unicorn   2022-06-03   86

They are getting another round of lay-offs, seems like the unicorn is not feeling too well, might have to get him to a vet after the coinbase deal failed seems like down is the only way to go.

Valkyrie Investments   Investment Company   2022-11-15   7   30%

When you suddenly realize that all the promised money is not coming as all your investors lately have backed off their deals I wonder why you still keep any employees at all and not just shut down and run the whole "investment" company on Twitter and youtube from home as that's all she's doing lately.

This amount of lay-off also tells another side of the story, all those people were basically earning their wages on the money people were pouring into crypto, they weren't doing anything else, just moving money from A to B and waiting for B to increase in price, I'm pretty sure that while telling people to hold on social media silently they were selling coins to have to pay their expenses. This model is flawed from the start and until you have a bull run and a huge inflow of cash everyone running the company like that will keep firing.

Which reminds me of one on the list, Core Scientific:

Core Scientific held 24 Bitcoins and approximately $26.6 million in cash as of Thursday. That’s compared with 1,051 Bitcoins and about $29.5 million in cash as of September, the company said in the filing.

If one of the largest miners is liquidating bitcoins to survive, what about the others who don't produce a cent o their own?

[Bitcoin_Arena]

This would have been an interesting thread to track platforms that are having financial troubles, but OP didn't bother updating it (list: Crypto exchanges with financial problems)

I remember at that time when a number of popular exchanges were announcing job cuts, It's ironic that FTX was instead hiring even more  
FTX will not freeze hiring amid layoffs at other crypto firms, CEO states



So while we are looking at the list, there could be some quite exchange out there pretending that all is good yet they are mismanaging user funds

Coinbase

From what is shown in this table, Coinbase made statistically the smallest layoffs..  

BTW - From my research, Coinbase and USDC are the safest on the market right now. But of course everyone can have a different opinion.

Looks like you just bought your account. A crypto OG from 2013 who seemed knowledgeble can never think like the way you do.

[Husires]

I was planning to make such list on June <List> Crypto exchanges with financial problems  (Read 290 times) but after a while, I came to the conviction that the dismissal of employees and such indicators are normal due to the expectations of a recession and the Federal Reserve’s continued raising interest rates, with the Bitcoin winter.

The most obvious example of this is Twitter. Thousands of workers have been fired and the service is still working. The reason for this is the excessive expansion in the number of workers over a period of time, for example, due to Covid-19, closures, and the increase in the price of Bitcoin.

the labor shortage does not indicate anything if you compare it with the levels of employment before 2020.

In lending services, the interest rate will play a larger role.

[Die_empty]

There are people in social media that have warned to be cautious with platforms that offer high APY and those platforms that have laid off employees from jobs in their companies.

Kraken, Coinbase, Crypto.com and Bybit did the biggest layoffs for exchanges this year according to the data in this spreadsheet which was created by Wublockchain.

Laying-off of workers is a clear indication that all is not well with a particular firm but it could also be a management strategy to reposition the company for efficiency and profit maximization. Most of these exchanges were reported to be overstaffed but the downturn of the sector is now forcing the management to maximize human resources and reduce waste. With the current problems in the crypto space it would be dangerous to keep you money not only in exchanges that layoff workers but even those that are still employing massively. It is very clear from the fall of FTX that most of these company CEOs lack financial intelligence and risk management skills.     

[bbc.reporter]

It's not farfetched to think that there's some platforms that are also insolvent, but just currently not exposed.

I wouldn't make conclusions based solely off layoffs though, since exchanges tend to earn a lot less in bear markets in the first place — regardless if solvent or insolvent.

I very much agree. This should not be taken with a grain of salt, however. Similar to what occurred to FTX, much of people in the community would never have considered that it was going to be the next exchange to bite the dust during October.

Coinbase

From what is shown in this table, Coinbase made statistically the smallest layoffs.. 

BTW - From my research, Coinbase and USDC are the safest on the market right now. But of course everyone can have a different opinion.

You did not look further down the list. There is an additional 1100 layoffs on the 60 listed.

There are people in social media that have warned to be cautious with platforms that offer high APY and those platforms that have laid off employees from jobs in their companies.

While high APY is definitely a huge red flag even before everything that has happened in the last six months (are there even any platforms left that offer ~10% like Celsius did ?), I don't think that exchanges laying off people is something to worry about. It even makes sense as crypto businesses (and not just them) tend to hire/lay off based on the market conditions and since we are deep into bear market that may last for a couple years and you have to cut your expenses in order to survive.

Regarding your question in the title, I wouldn't be surprised if some platforms from that list you shared go under. Anyone that still has money on any of the platforms is simply asking for trouble.

You might be correct that it is nothing to worry about, however, it would still be the correct decision to be careful and avoid them because in a cryptospace bear market, there should be always something to worry about hehehe.

[Darker45]

I think people should be much much more cautious in dealing with platforms that offer high APY than those that have laid off some employees. They're more inclined to unsustainable practices and being Ponzis. Laying off employees, on the other hand, is probably part and parcel of managing a company. Company operations expand and contract. They experience bullish and bearish cycles. Depending on how bearish the market is, lay offs might be an option. With what the crypto market has gone through--from very bullish to severe winter in just months-- it is understandable if operational costs have to be trimmed down rather quickly after possible mass hiring and some expansion efforts.

[mk4]

I agree, although i would be careful against company with very high lay-off percentage. I don't expect a company can operate normally after firing >= 50% of their worker. Although it's different case if they hire contractor which usually isn't counted/categorized as employee.

I agree to some extent, but some things are simply unpredictable. Taking note that there have been layoffs not only in the bitcoin/cryptocurrency industry, but the broader technology/fintech industry took a huge beating as well.

[tabas]

So while we are looking at the list, there could be some quite exchange out there pretending that all is good yet they are mismanaging user funds

This dude is a great pretender and talker. He literally made us believed that there's nothing much happening to FTX until CZ has opened it up and then the domino came to catch him.

Laying-off of workers is a clear indication that all is not well with a particular firm but it could also be a management strategy to reposition the company for efficiency and profit maximization. Most of these exchanges were reported to be overstaffed but the downturn of the sector is now forcing the management to maximize human resources and reduce waste. With the current problems in the crypto space it would be dangerous to keep you money not only in exchanges that layoff workers but even those that are still employing massively. It is very clear from the fall of FTX that most of these company CEOs lack financial intelligence and risk management skills.     

It happens also to non-crypto companies when they have to cut budget and constraints. And probably it has got something to do with the bear market and I guess when we're back in the bull run, they will be hiring again and needing more manpower to support their services. When they've been overstaffed, it's not a big issue to them because the value of their respective exchange tokens were quite high in value and then the bear came.

[Lucius]

All these layoffs were announced months in advance before they happened, and I already wrote in one of the threads where we discussed that all these companies first try to cut their costs by laying off as many people as possible, and then forcing those who remained to work at least twice as much. This is quite a common occurrence in a capitalist society where money is God, and company owners are some kind of high priests who serve it by exploiting those at the bottom of the pyramid.

I do not think that this is a bad sign in the sense that all these companies should be seen in the light of possible failure, because we can hardly expect that all these companies are managed in the way that the famous Mr. Bankman does with his company. In other words, to destroy a $20 billion company overnight, you still need to have a certain amount of skill, and we don't see such people every day, do we?

[NotATether]

BTW - From my research, Coinbase and USDC are the safest on the market right now. But of course everyone can have a different opinion.

Actually that is not correct. The real safest on the market is Bitcoin that is stored in an offline wallet. But it will have to share that title with Queen, who will have many more gigs to play as more platforms bite the dust.

[Pmalek]

Your own wallet is the only safe place for your coins right now.

That's true in most cases, but it also depends on the type of coin. If we are talking about bitcoin, an asset that can't be censored by a third-party, then your own personal wallet is the best place for it. But USDC is a centralized stablecoin that has censorship implemented on a protocol level, just like USDT and the rest of them (except the decentralized DAI). If the issuer wants, they can block and blacklist any address holding USDC, no matter if it's on an exchange or private wallet. Just a few weeks ago, exchanges froze USDT on addresses that belong to FTX.       

[The Cryptovator]

Investors are concerned following the defeat of FTX. Even I believe that a few more platforms will collapse at some point. The crypto space is becoming more difficult to navigate, and it is tough to comprehend in any centralized platform. Though I have stated from the start that centralized platforms are not a safer place to store funds, we must use them on circumstance. The most significant consequence is that we never know when a platform will collapse, and if it does, only a few users will be affected. So, if all we have to do is secure our funds from any centralized platform, we are almost safe

[bbc.reporter]

All these layoffs were announced months in advance before they happened, and I already wrote in one of the threads where we discussed that all these companies first try to cut their costs by laying off as many people as possible, and then forcing those who remained to work at least twice as much. This is quite a common occurrence in a capitalist society where money is God, and company owners are some kind of high priests who serve it by exploiting those at the bottom of the pyramid.

I do not think that this is a bad sign in the sense that all these companies should be seen in the light of possible failure, because we can hardly expect that all these companies are managed in the way that the famous Mr. Bankman does with his company. In other words, to destroy a $20 billion company overnight, you still need to have a certain amount of skill, and we don't see such people every day, do we?

Agreed that it might only be a contraction of the business because it needs to adjust to the contraction of the cryptospace, however, is this really okay? Can it not also imply that the condition of the business is questionable? We can never suggest that those exchanges are financially safe in this bear market.

In any case, this article about Crypto.com's CEO. It appears that mainstream news media are researching on the history of the important people in the cryptospace and finding red flags.



Kris Marszalek wants everyone to know that his company, Crypto.com, is safe and in good hands. His TV appearances and tweets make that clear.

On Friday, Crypto.com published an audited proof of reserves, attesting that customer assets were held on a one-to-one basis, meaning that all deposits are 100% backed by Crypto.com’s reserves.  The audit was performed by the Mazars Group, the former accountant for the Trump Organization.

While no evidence has emerged of wrongdoing at Crypto.com, Marszalek’s business history is replete with red flags. Following the collapse of a prior company in 2009, a judge called Marszalek’s testimony unreliable. His business activities before 2016 — the year he founded what would become Crypto.com — involved a multimillion-dollar settlement over claims of defective products, corporate bankruptcy and an e-commerce company that failed shortly after a blowout marketing campaign left sellers unable to access their money.

Source https://www.cnbc.com/2022/12/09/cryptocom-kris-marszalek-involved-bankruptcy-offshore-holdings-client-money-monaco.html

[DaveF]

All these layoffs were announced months in advance before they happened, and I already wrote in one of the threads where we discussed that all these companies first try to cut their costs by laying off as many people as possible, and then forcing those who remained to work at least twice as much. This is quite a common occurrence in a capitalist society where money is God, and company owners are some kind of high priests who serve it by exploiting those at the bottom of the pyramid.

I do not think that this is a bad sign in the sense that all these companies should be seen in the light of possible failure, because we can hardly expect that all these companies are managed in the way that the famous Mr. Bankman does with his company. In other words, to destroy a $20 billion company overnight, you still need to have a certain amount of skill, and we don't see such people every day, do we?

Agreed that it might only be a contraction of the business because it needs to adjust to the contraction of the cryptospace, however, is this really okay? Can it not also imply that the condition of the business is questionable? We can never suggest that those exchanges are financially safe in this bear market.

In any case, this article about Crypto.com's CEO. It appears that mainstream news media are researching on the history of the important people in the cryptospace and finding red flags.



Kris Marszalek wants everyone to know that his company, Crypto.com, is safe and in good hands. His TV appearances and tweets make that clear.

On Friday, Crypto.com published an audited proof of reserves, attesting that customer assets were held on a one-to-one basis, meaning that all deposits are 100% backed by Crypto.com’s reserves.  The audit was performed by the Mazars Group, the former accountant for the Trump Organization.

While no evidence has emerged of wrongdoing at Crypto.com, Marszalek’s business history is replete with red flags. Following the collapse of a prior company in 2009, a judge called Marszalek’s testimony unreliable. His business activities before 2016 — the year he founded what would become Crypto.com — involved a multimillion-dollar settlement over claims of defective products, corporate bankruptcy and an e-commerce company that failed shortly after a blowout marketing campaign left sellers unable to access their money.

Source https://www.cnbc.com/2022/12/09/cryptocom-kris-marszalek-involved-bankruptcy-offshore-holdings-client-money-monaco.html

His history does not really look that bad, just that he tries to cash in at the end of the wave cheaply and quickly. The USB thing is a perfect example, looking at the dates in te article he got in as the market was being flooded with cheap USB / sold state storage. Newer better ones were all over the market and better stuff was coming quickly, he went after the crap low end. Same with his other services, undercut everyone and either make a little money OR hope to get bought out by the big guys. Looks like he finally did find a winner with Crypto.com, only time will tell.

But as always. Not your keys, not your coins.

-Dave