Luno, a crypto exchange owned by Digital Currency Group (DCG), recently joined the list of crypto firms laying off employees. On January 25, the company announced that it would lay off 35% of its global workforce, citing challenging market conditions and the decline of the crypto growth that appeared in the past few months.
According to the company’s Linkedin page, Luno had about 960 employees, which means more than 330 jobs will be lost due to the cuts.
The firm noted that 2022 was a very difficult year for the crypto industry. Since the crypto crash in November 2021, about $2 trillion has been wiped out from the overall market. Further, rising interest rates fueled fears of an economic downturn.
Markus Swanepoel, CEO of the London-based firm, wrote to employees on Wednesday:
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.
Swanepoel said the decision resulted from the overall slowdown in the technology industry and the global economic downturn in recent months. The company claims there will be no impact on customers’ funds and exchange operations.
The company stated:
Given all the sensitivity and misinformation in the market right now, I believe it’s also important to reiterate to everyone that customer funds are safe.
Impact of Crypto Winter on DCG Subsidiaries, Including Luno
Timothy Stranex and Marcus Swanepoel founded Luno in 2013. It has more than 9 million clients in 43 countries. Luno is headquartered in London with offices in Sydney, Cape Town, Singapore, Johannesburg, and Lagos. It is also part of the troubled Digital Currency Group (DCG).
Last year saw many cryptocurrency firms facing financial obstacles, referred to as “Crypto Winter,” including Three Arrows Capital, FTX, Blockfi, Voyager, Celsius, and Genesis.
DCG is one of many crypto companies affected by the collapse of crypto hedge fund Three Arrows Capital in June, and FTX’s failure in November suspended the firm’s performance. Located in Stamford, Connecticut, DCG has five subsidiaries, Luno, Genesis, Grayscale Investments, CoinDesk, and Foundry.
DCG’s lending arm, Genesis, filed for bankruptcy last week after suspending withdrawals for its lending business last November. However, DCG CEO, Barry Silbert, has been in a public war of words with Gemini’s founders, Cameron and Tyler Winklevoss.
According to a bankruptcy filing, Genesis owes $765.9 million to Gemini customers. Cameron Winklevoss asked DCG’s board to remove Silbert as CEO in an open letter posted on Twitter on January 10.
The letter said:
“He has proven himself unfit to run DCG and unwilling and unable to find a resolution with creditors that is both fair and reasonable.”
Earlier this month, Coinbase announced a 20% reduction in company employees. Additionally, crypto lender Genesis cut its workforce by 30% on January 5.
Besides the DCG’s subsidiaries, many large crypto firms, including Blockchain.com, Crypto.com, Gemini, and ConsenSys, have cut staff in recent weeks amid the ongoing crypto winter.