The Securities and Futures Commission of Hong Kong has raised concerns over activities with two crypto entities.
Brian Armstrong, the CEO of Coinbase, has announced that the company will be making a staff reduction as the bear market continues to plague the cryptocurrency industry and amidst a global economic recession.
In an internal note that was made public on Coinbase’s blog, Armstrong announced that the size of the Coinbase team would be reduced by about 18% in order for the company to “stay healthy” during the economic turndown. As part of the announcement, Armstrong explains why the decision was made, with factors impacting the industry and hindering opportunities for the team to continue at the current size.
The possible long-term impact of the crypto winter
In the announcement, Armstrong notes:
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”
The CEO also added that the firm had been scaling rapidly, or “too quickly” during the bullrun at the beginning of 2021, when crypto products were exploding in growth and revenue opportunties. Acknowledging that it’s challenging to scale at the right pace in a volatile industry, Armstrong stated that “[in this case it is now clear that we over-hired.]”
The announcement shared with the affected staff members noted that they would have been removed effectively from Coinbase’s internal systems “to ensure not even a single person made a rash decision that harmed the business or themselves.” As part of the reduction, all departing employees will be receiving a minimum of 14 weeks of severance including two weeks for every year of employment over a year.
This layoff came soon after a Twitter thread from the CEO after an employee issued a public petition to remove some of the company’s senior executives. Armstrong criticized the approach to a vote of no confidence, saying that it “is really dumb on multiple levels” and following to explain his view on the matter.
16/ If you’re unhappy about something, work as part of the team to raise it along with proposed solutions (it’s easy to be a critic, harder to be a part of the solution). If you can’t do that and you’re going to leak/rant externally then quit. Thanks!
— Brian Armstrong – barmstrong.eth (@brian_armstrong) June 10, 2022