Home World DCG-owned crypto exchange Luno is 35% staffed

DCG-owned crypto exchange Luno is 35% staffed

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A deteriorating macroeconomic climate and the collapse of industry giants such as FTX and Terra have weighed on Bitcoin’s price this year.

STR | Nurphoto via Getty Images

Cryptocurrency exchange Luno is the latest company in the industry to make layoffs, with plans to cut 35% of its global workforce.

The London-based firm’s CEO, Marcus Swanepoel, announced the layoffs to employees at 12 noon London time on Wednesday in a live-streamed town hall.

“2022 has been an incredibly difficult year for the tech industry in general and the crypto market in particular,” the company said in a statement released to CNBC on Wednesday.

“Unfortunately, Luno is not immune to this turbulence, which has impacted our overall growth and revenues.”

Luno has approximately 960 total employees, according to its LinkedIn profile, which means more than 330 jobs will be affected.

The cuts will particularly affect Luno’s marketing teams. A Luno spokesperson told CNBC that the layoff will 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 several crypto firms affected by the collapse of FTX, formerly one of the world’s largest crypto exchanges. Genesis, the lending arm of DCG, filed for bankruptcy last week.

Genesis’ bankruptcy filing comes after a standoff with peer Gemini over a controversial loan deal that provided Gemini customers with rich returns through Gemini’s high-yield loan product, Gemini Earn.

Gemini customers have $900 million in savings on Gemini Earn. The service halted withdrawals after Genesis, which lent funds to large institutional borrowers, suspended repayments from customers.

The crypto industry has been mired in a slump known as “crypto winter” since the collapse of the controversial algorithmic stablecoin terraUSD last May. Higher interest rates from the Federal Reserve also spooked market players.

About $2 trillion in value has been wiped from the overall crypto market since the peak of the crypto boom in November 2021 — though Bitcoin has a bit of a bounce since the beginning of the year.

The collapse of FTX is shaking up crypto.  The pain may not end

TerraUST’s failure, combined with a sharp decline in digital currency prices, triggered a cascade of further crypto failures, including Three Arrows Capital, Voyager Digital, FTX, BlockFi, and Genesis.

In a statement distributed to employees on Wednesday, Luno’s Swanepool said the industry had experienced a “series of shocks” that led to tight funding and a transition to long-term profitability.

“While we anticipated the downturn and had planned ahead for a business and funding model that could be resilient to some of these factors, the sheer scale and speed of all of this happening, all at the same time, put a significant strain on our original plan.” said Swanepoel.

“In practice, this means that in addition to streamlining our strategy to focus on our core strengths, we also need to significantly reduce our cost base, which includes headcount across all our markets, so that we are set up for success going forward.”

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