Gemini downsizes once again while blaming “unprecedented fraud” in recent months.
Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, has begun its third wave of layoffs in less than a year, laying off 10% of its workers.
Cameron Winklevoss claimed the layoff was caused by a mix of macroeconomic pressures and “unprecedented fraud” in the cryptocurrency business.
According to The Information, Winklevoss was given “no choice” but to reduce staff, according to an internal message received by the publication on Monday.
“It was our hope to avoid additional reductions after this summer, but continued unfavorable macroeconomic conditions and unparalleled fraud perpetrated by bad actors in our business have left us with no other choice but to modify our prognosis and further decrease headcount,” he said.
According to Pitchbook data, Gemini had 1,000 employees as of November 2022, implying that approximately 100 workers were likely laid off. The most recent layoff occurred in July, with 7% of the corporation losing their jobs, following a month-earlier dismissal of 10%.
They aren’t the only ones adopting such dramatic measures: After laying off 18% of its workers in June, Coinbase let another 950 employees go earlier this month. Two weeks ago, CryptoCom laid off another 20% of its workforce.
The biggest source of pain for most businesses is macroeconomic conditions. Rising interest rates aided in the collapse of cryptocurrency asset prices in 2022, harming exchanges, miners, and trading organizations equally.
Winklevoss has been particularly outspoken in his criticism of DCG CEO Barry Silbert, whose trading subsidiary, Genesis, declared bankruptcy last week. Winklevoss says that Silbert and the two companies misrepresented their financial status to Gemini, whose Earn program currently has its users’ assets trapped inside Genesis.
In terms of fraud, FTX’s previous CEO Sam Bankman-Fried was widely implicated and charged with the same after his exchange went bankrupt in July. The Securities and Exchange Commission (SEC) has charged him with cheating his customers by diverting their monies to his trading desk, Alameda Research, to which he has pleaded not guilty.
However, Gemini and Genesis are now also in issues with the SEC, which says that they both marketed unregistered securities to the retail investing public through Gemini Earn. Nexo, a competitor crypto loan business, has ceased up on servicing US customers following multiple regulatory problems along these lines.
