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(Kitco News) –
Crypto.com CEO Kris Marszalek shared the announcement on the company’s website early Friday morning. “Today we made the difficult decision to reduce our global workforce by approximately 20%,” he wrote. “These reductions were in no way related to performance, and we extend our deepest gratitude for all their contributions to Crypto.com.”
Marszalek said that despite growing to 70 million users “we’ve had to navigate ongoing economic headwinds and unforeseeable industry events. We grew ambitiously at the start of 2022, building on our incredible momentum and aligning with the trajectory of the broader industry. That trajectory changed rapidly with a confluence of negative economic developments.” He said that the company’s earlier layoffs in July “positioned us to weather the macro economic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry.”
On Nov. 14, just three days after FTX declared bankruptcy, Marszalek was forced to scramble to reassure customers after $347 million of the company’s stake in Ether was spotted moving back and forth on-chain. According to Etherscan data, about 285,000 ETH was sent from Crypto.com’s wallet address to Gate.io, another crypto exchange, before being sent back. Marszalek claimed the transfer was made in error, and the intention was to send the ETH to a cold storage wallet.
The massive ETH stockpile was sent back to Crypto.com just days before it shared its reserves with worried market participants after the collapse of FTX. When Marszalek announced Crypto.com’s reserves, he highlighted the exchange’s large holdings of Bitcoin and Ether. “While the proof of reserves audit preparation is underway, we are sharing our cold wallet addresses for some of the top assets on our platform,” he wrote in a tweet. “This represents only a portion of our reserves: about 53,024 BTC, 391,564 ETH, and combined with other assets for a total of $3 billion.”
At the time, he told customers they could expect Crypto.com “to continue working in spirit of full transparency and remain the steady hand and a safe, secure platform.” The community was not impressed when it emerged that over 80% of the company’s ETH reserves were moved not long before the balance sheet snapshot was captured.
Crypto.com was also one of the main sponsors for the recent World Cup tournament, which promoted the platform to a global audience of five billion viewers. The exchange has been one of the most active companies in the world in terms of promoting to sports fans, with the firm running several ads during the Super Bowl and purchasing the naming rights to the multipurpose arena in downtown Los Angeles that was formerly known as the Staple Center for $700 million.
The company has also partnered with payments processing giant Visa, which facilitates transactions for Crypto.com debit cards.
Crypto.com is the 41st largest cryptocurrency exchange by volume, with $310 million in transactions per day and over 900,000 weekly visits, according to CoinMarketCap.
Crypto.com’s CRO utility token has lost over 93% since hitting its all-time high of $0.891 a year ago. At the time of writing, CRO was trading at $0.0676, up 5.3% on the day, but well off the $0.127 registered on Nov. 7 before FTX declared bankruptcy.
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