Cryptocurrency exchange Blockchain.com is laying off one-quarter of its workforce, the latest business in the digital-assets sector to scale back following a sharp decline in cryptocurrencies.
The trading platform is a creditor to the collapsed crypto hedge-fund manager Three Arrows Capital, which it lent more than $300m.
A spokeswoman on 21 July confirmed the staff reduction, which was first reported by CoinDesk. The crypto news site said Blockchain.com will close its offices in Argentina, cut headcount in the US and UK and cancel team expansion plans in several countries. CoinDesk said the cuts would affect about 150 people.
Some of the largest cryptocurrency exchanges, including Coinbase Global and Gemini Trust, have recently cut staff following crypto market turbulence. Crypto’s woes began in May when stablecoin TerraUSD broke from its $1 peg, creating losses for institutions and individual investors. Knock-on effects have intensified, rendering Three Arrows Capital bankrupt and hurting large firms from which it borrowed.
Blockchain Access UK Ltd., which does business as Blockchain.com, is among the creditors to Three Arrows Capital, having lent the beleaguered hedge-fund manager $302.6m, The Wall Street Journal previously reported.
Last year, Blockchain Access UK bought Argentine cryptocurrency platform SeSocio.com for an undisclosed amount. At the time, it planned to launch physical offices and hire staff in Argentina, Brazil, Chile, Colombia and Mexico, in addition to absorb 100 SeSocio employees.
Cryptocurrency firms grew rapidly last year, as a bull market in digital assets peaked with bitcoin topping $60,000. That momentum has since faded as central banks have raised interest rates to tame inflation, leading investors to pile into safer assets. Bitcoin traded near $22,700 on 21 July.
A series of recent bankruptcies has compounded concern over holding cryptocurrencies. Cryptocurrency lender Celsius Network filed for bankruptcy protection after halting withdrawals in the wake of a collapse in digital currency prices. Cryptocurrency lender Vauld Group has filed for protection against creditors in Singapore after pausing withdrawals.
—Vicky Ge Huang contributed to this article
This article was published by The Wall Street Journal, part of Dow Jones