The Digital Currency Group (DCG), which owns the London-based crypto exchange Luno, is the latest to exhibit signs of market crisis contagion.
Another indication of the market contagion that started with the Genesis bankruptcy was the announcement of layoffs by a crypto exchange that is a part of the Digital Currency Group (DCG).
The decision to reduce about 35% of the company’s global headcount was justified by market turbulence, according to the exchanges. This comes a week after MetaMask’s developer, Consensys, announced that it would be laying off workers due to a slowing market.
However, the current rally is providing positive momentum, which is a relief for the cryptocurrency market after it had a difficult year in 2022.Over 300 employees would be impacted by the company’s decision, according to a CNBC report.
Due to its vulnerability to the FTX led contagion, cryptocurrency lender Genesis Global filed for Chapter 11 bankruptcy protection last week. The DCG, which is under pressure as a result of the liquidity crisis, has yet again suffered due to Luno’s most recent action.
The cryptocurrency exchange has 900 employees and is headquartered in London. Marcus Swanepoel, the CEO of the business, said:
“2022 has been an incredibly tough year for the broader tech industry and in particular the crypto market. Luno unfortunately hasn’t been immune to this turbulence, which has affected our overall growth and revenue numbers.”
The layoffs at Luno are a further setback for the parent company of the exchange. Following significant losses from the failure of FTX and Three Arrows, Genesis filed for Chapter 11 bankruptcy protection last week.
According to news reports from last week, DCG’s CoinDesk news site has also hired bankers to investigate the possibility of a sale. Barry Silbert, the CEO of DCG, and Cameron Winklevoss, the founder of Gemini, have also engaged in a public verbal battle. The executive of the cryptocurrency exchange claims that Silbert and his companies owe Gemini customers $900 million.
“He has proven himself unfit to run DCG and unwilling and unable to find a resolution with creditors that is both fair and reasonable,” Winklevoss wrote in an open letter earlier the month. “As a result, Gemini, acting on behalf of 340,000 Earn users, requests that the Board remove Barry Silbert as CEO, effective immediately, and install a new CEO, who will right the wrongs that occurred under Barry’s watch.”
