Coinbase Cuts More Staff As Bankman-Fried's FTX Rattles Cryptocurrency Market

Zinger Key Points
  • San Francisco-based Coinbase announced more staff cuts after cutting 18% of staff in June.
  • Last week, the company reported third-quarter earnings, with bookings of $576 million, a 28% sequential decline.

Coinbase Global Inc COIN reportedly announced more workforce reductions to its recruiting and institutional onboarding teams Thursday, marking the company's second round of layoffs this year.

The staff reductions, reported by The Information, come as the broader cryptocurrency industry adjusts to the collapse of several crypto companies in the last six months, most recently industry titan FTX, frightening investors and igniting additional speculative fires in the still-emerging sector.

Read more: 'Well Played, You Won': FTX's Bankman-Fried Breaks His Silence On Binance Debacle

Revenue issues at Coinbase and the staff cutbacks could be related.

Last week, the company reported third-quarter earnings, with bookings of $576 million, a 28% sequential decline.

Additionally, it missed the Street forecast of a loss of $2.40 per share, reporting a loss of $2.43 per share.

Tough Year For Crypto Industry

The collapse of Singapore-based crypto hedge fund Three Arrows Capital (3AC), which filed for Chapter 15 bankruptcy on July 1, was one of several major blows to the cryptocurrency sector this year.

On June 12, the New Jersey-based crypto lender Celsius halted withdrawals and, one month later, declared bankruptcy under Chapter 11 with a $1.19-billion loss on its balance sheet.

Voyager Digital VYGVQ, a cryptocurrency lender that FTX acquired, had a significant exposure to the hedge fund and was severely harmed by the collapse of 3AC.

More than $650 million in claims have been made by Voyager against 3AC.

BlockFi, a cryptocurrency lender, inked a contract with FTX on July 1 to receive a $400-million revolving credit facility and an option for FTX to acquire BlockFi for up to $240 million. BlockFi was facing an increase in withdrawals and a hit from 3AC at the time.

Read next: FTX US Warns Users Cryptocurrency Trading May Be Halted In Days Ahead

COIN Price Action: Shares of Coinbase are trading 9.42% higher to $50.31 Thursday afternoon, according to data from Benzinga Pro.

Photo courtesy of Coinbase. 

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Posted In: CryptocurrencyEarningsMid CapNewsTopicsTop StoriesMarketsMoversTrading IdeasGeneralFTXSam Bankman-Fried
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