Business

DCG-owned Luno has 35% of its staff

The deterioration of the macroeconomic climate and the collapse of industry giants such as FTKS and Terra have affected the price of Bitcoin this year.

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Cryptocurrency exchange Luno is the latest company in the industry to lay off, intending to lay off 35% of its global workforce.

The London-based company’s chief executive, Markus Swanepoel, informed employees of the redundancies at 12pm London time on Wednesday in a live-streamed town hall.

“In 2022 has been an incredibly difficult year for the broader tech industry and the crypto market in particular,” CNBC said in a statement on Wednesday.

“Unfortunately, Luno is not immune to this turbulence, which has impacted our overall growth and revenue numbers.”

Luno has a total of approximately 960 employees, according to its LinkedIn profile, meaning more than 330 jobs will be affected.

The cuts are particularly affecting Luno’s marketing teams. A spokesperson for Luno told CNBC that the layoffs would have “minimal or no impact on key operational and compliance teams.”

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Luno, which has offices in Africa, Southeast Asia and Europe, is part of crypto conglomerate Digital Currency Group.

DCG is one of several crypto firms affected by the collapse of FTKS, formerly one of the world’s largest crypto exchanges. Genesis, DCG’s credit unit, filed for bankruptcy last week.

Genesis’ bankruptcy filing follows a conflict with one of its peers, Gemini, over a disputed lending deal that generated rich returns for Gemini clients through Gemini’s high-yield lending product, Gemini Earn.

Gemini customers have $900 million stored on Gemini Earn. The service halted withdrawals after Genesis, which lent funds to large institutional borrowers, paused on customer buyouts.

The crypto industry has been mired in a slump known as “crypto winter” since the collapse last May of the controversial algorithmic stablecoin terraUSD. Higher interest rates from the Federal Reserve also spooked market players.

Roughly $2 trillion in value has been wiped from the overall crypto market since the peak of the crypto boom in November 2021 — although bitcoin has rebounded slightly since the start of the year.

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TerraUST’s failure, coupled with a deep decline in digital currency prices, sparked a cascade of further crypto failures, including Three Arrows Capital, Voyager Digital, FTKS, BlockFi and Genesis.

In a statement shared with employees on Wednesday, Luno’s Swanepoel said the industry had experienced a “series of shocks” that led to a tight funding environment and a shift toward long-term profitability.

“While we anticipated the downturn and proactively planned ahead with a business and funding model that can be resilient to some of these factors, the sheer scale and speed of all of this happening, all at the same time, is putting significant pressure on our original plan.” Swanepoel said.

“This means in practice that in addition to streamlining our strategy to focus on our core strengths, we must also significantly reduce our cost base – which includes headcount across all our markets – to set us up for success going forward.”

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