2023 is starting out really badly for cryptocurrency, with exchanges, lenders, and maybe the biggest market maker and player in the industry facing bankruptcy. There is a lot going on as all of these stories are rapidly evolving and happening currently. Updates will come later so make sure to check back again soon.
Huobi crypto exchange has massive layoffs
Chinese crypto exchange run by Tron creator Justin Sun is laying off hundreds of people, with estimates of up to 1200. Salaries have been cut, and salaries have also been changed from fiat payouts to USDT/USDC. Staff that does not accept the new terms of their contracts will also be laid off. The move according to insiders is that this has sparked protests inside of the exchange. Justin Sun is also the founder of the cryptocurrency platform, BitTorrent, and the non-profit organization, the Rainberry Charity Foundation. He is a graduate of Peking University and has a Master’s degree in political economy from the University of Pennsylvania. He is a major player in the crypto space, having his hands in various projects like Tron, Huobi, BitTorrent, Poloniex, and others. Sun has replied to the news of the layoffs leaking with a statement on Twitter saying to “Ignore FUD and Keep Building.”
Gate crypto exchange starts layoffs
Another crypto exchange that is starting layoffs this year is Gate, which is decent sized crypto exchange, although not a titan as some other crypto exchanges. Gate is more popular in Asian markets. Employees said that it is rumored to be 40% to 50% of staff that is being cut, as some staff has already had their permissions revoked as the company begins to downsize. According to one Twitter user who leaked the info, Gate responded to them saying these changes are “normal optimization.”
Crypto lender Genesis considers bankruptcy, lays off staff
Genesis Trading, a crypto lender, will eliminate 60 positions out of its workforce of 200 people as it attempts to economize and avoid bankruptcy. Genesis was hit hard by the closure of FTX, a major client. The exchange froze redemptions in November 2022, shortly after FTX filed for bankruptcy protection. Barry Silbert’s Digital Capital Group (DCG), which owns Genesis, has been criticized by prominent investors for the length of the withdrawal freeze and executives’ lack of action. DCG has also been the target of the Winklevoss Twins, who have been trying to recoup nearly $1 billion dollars in customer funds which were lent to Genesis.
Wyre crypto payments company set to shut down
According to a news article, Ioannis Giannaros, the CEO of crypto payments company Wyre, has allegedly told his employees via email that he is liquidating the company and plans to terminate services this month. Wyre is a financial technology company that provides payment and foreign exchange services using blockchain technology. The company offers a platform that allows businesses to send and receive cross-border payments, as well as a range of API-based tools for developers to build payment functionality into their own applications. Wyre also operates a cryptocurrency exchange that allows users to buy and sell a variety of digital assets, including Bitcoin, Ethereum, and Litecoin.
Coinbase mega crypto exchange fined $50 million
The New York State Department of Financial Services fined Coinbase $50 million after finding that it had violated anti-money laundering laws by allowing customers to open accounts without conducting adequate background checks. The agency also required Coinbase to invest $50 million to enhance its compliance program. Coinbase is one of the biggest digital currency exchanges in the market, which allows users to buy, sell, and store cryptocurrencies. The company was founded in 2012 and is headquartered in San Francisco, California. Coinbase is considered one of the most popular and user-friendly platforms for buying and selling cryptocurrency. In addition to its exchange services, Coinbase also offers a digital wallet for storing cryptocurrency, as well as a range of tools and resources for developers building applications on the blockchain.
Silvergate Capital tanks more than 40%
Silvergate Capital shares fell more than 40 percent after Crypto Bank disclosed fourth-quarter withdrawals of $250 million. Total deposits from digital asset customers declined to $3.8 billion from $11.9 billion at the end of the third quarter. The decline was driven by a sharp fall in deposits held by FTX, a cryptocurrency exchange whose collapse earlier this year raised questions about the stability of the industry. Silvergate Bank is a U.S. bank based in La Jolla, California. It was founded in 1988 and is a full-service bank that offers a range of financial products and services to individuals, businesses, and organizations. Silvergate has a particular focus on serving the needs of technology companies and has a reputation for being one of the more crypto-friendly banks in the United States.
Celsius Network crypto users lose out as Judge rules in company’s favor
A judge with the U.S. Bankruptcy Court for the Central District of California issued a ruling in the case of Celsius Network that determined the plaintiffs and defendants in the case were not the rightful owners of digital wallet funds due to a breach of contract by the defendant, which caused the funds to be transferred improperly to an unregistered broker-dealer in violation of federal securities law. The decision was made by a judge in a 45-page written decision on Wednesday. The lender, Celsius, filed for Chapter 11 bankruptcy. At the time of the bankruptcy, Celsius had about $4.2 billion in assets. In the decision, the judge ruled that the deposits in the lender’s yield-bearing Earn accounts (which averaged around 5%) belong to the estate — that is Celsius — and not the individual holders of those accounts.