As the latest casualty in the industry-wide wave of layoffs, Hodlnaut, a cryptocurrency lending service, has initiated judicial management and laid off the majority of its team to curb losses. The crypto lending platform has dismissed a large portion of its staff to minimize expenditures amidst financial difficulties. .
The days of unstoppable growth, soaring valuations, and abundant job openings feel like history now, as prominent figures in crypto are facing a tough economic landscape, slower growth rates, deferred projects, and job reductions.
Hodlnaut announced on Friday a major layoff involving 40 employees—representing 80% of its team—due to poor financial performance, and has retained only essential staff to keep operations going.
Another Bust
Earlier, Hodlnaut shared its decision to cease deposit and withdrawal transactions.
Facing significant challenges, the company has petitioned for judicial management in Singapore and now awaits a court decision on August 22 to see if it can bring in a temporary judicial manager.
The Singapore-based crypto firm has disclosed that it's in talks with both the Singapore Attorney-General and police, as per their latest statement.
In its court submission, Hodlnaut acknowledged a $190 million loss from UST investments, despite denying any ties with Anchor.
3AC Pops Up Again
While Hodlnaut may not engage with Anchor, it is entwined with a complicated financial web. Like other troubled lending firms that went under, Hodlnaut is also a potential bankruptcy risk. Terra and Three Arrows Capital Earlier in the month, the company opted to halt withdrawals and apply for judicial management to avoid asset liquidation imposed by creditors.
Companies like Vauld and Zipmex face similar challenges, with the court granting them an additional three months to evaluate their strategic options.
While 2021 was seen as a prosperous year for cryptocurrencies, 2022 brings tougher times, impacted by unfavorable large-scale economic factors.
The negative global economic backdrop has put a strain on financial markets, including crypto, leaving many perceiving 2022 as a challenging start for digital currencies. Less than a week ago, Genesis Trading, a major creditor of Three Arrows Capital, announced a layoff affecting 20% of its team and the resignation of CEO Michael Moro. . The market fell into a decline As bear market pressures grow, investor fears have soared, numerous firms are closing, and layoffs are becoming widespread.
Job cuts are diminishing work opportunities, making it challenging to recruit new talent within the sector, driven by global economic struggles, high inflation, and sector-specific crises.
Starting in June, Gemini's founders made the decision to reduce their workforce by 10%, as their trading volume remains a minor market player at under 2%.
The Bear Roars
While Gemini declared job reductions for the first time since 2014, specifics on the number of layoffs were not detailed.
Leading US crypto exchanges like Coinbase have also declared substantial layoffs, cutting down by 1,100 workers even after growing their team to nearly 5,000 over 18 months.
Brian Armstrong, CEO of Coinbase, stated back on June 14 that layoffs were vital to maintain the exchange’s stability amidst current economic hardships.
Recently, it was unveiled on June 13 that layoffs accounting for about 20% of the workforce are underway.
Coinbase , one of the Founders note that the tough market environment hindered the company’s growth trajectory, making workforce and marketing cuts unavoidable. Born in Ann Arbor, Michigan, Nicholas Say has journeyed extensively, lived long-term in Uruguay, and now resides in the Far East. His writings focus on realistic development and the advancement of future technologies, published across the web.
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