Don't be fooled by the recent digital currency price bomb. Those with inside information on the actual performance of the industry continue to signal that tough times are ahead.
On Jan. 13, Singapore-based Crypto.com Announced that it would lay off 20% of its workforce. The move comes days after Silicon Valley swapped Coinbase (NASDAQ: CURRENCY) Announced more layoffs.
It is the second wave of layoffs for Crypto.com. In July 2022, the company laid off 260 employees representing 5% of its global workforce. Chief Executive Officer Kris Marszalek said the layoffs were done in the spirit of "prudent financial management" and to position the company for "long-term success."
Digital currency markets continue to collapse
This is not the first bear market that digital currency industry has experienced, and probably will not be the last. However, it is without a doubt the worst to date.
Given that LUNA/UST imploded in early 2022, removing hedge funds like Three Arrows Capital (3AC) and ultimately leading to the fall of big players in the industry like FTX, things have gone from bad to worse in the industry. The cascade of liquidations has shown us who has been swimming naked, exposing fraud and financial shenanigans to a level that is hard to believe.
While Crypto.com and Coinbase have survived thus far, other centralized exchanges and digital currency lending platforms have not fared as well. FTX, as already mentioned, went out of business practically overnight, and exchanges like Binance and Gemini are plagued by insolvency rumors. Several key lending platforms such as Celsius Network Y Genesis of the digital currency group have filed for bankruptcy or are teetering perilously close to the brink of ruin.
As the chaos continues to unfold, regulators are stepping in to bring much-needed law and order. The SEC recently charged genesis and gemini with the offer and sale of unregistered 'crypto' asset values. SEC chief Gary Gensler has vowed to align the industry and vowed that the era of the 'Wild West' is over.
Will Crypto.com survive due to what its CEO calls "prudent financial management"? Time will tell, but for now, expect more layoffs, more bankruptcies, and many more charges and arrests. Things are going to get a lot worse before they get better.
See: The future of digital asset exchanges and investing
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