The brutal beginning of 2023 for centralized crypto companies 
Coinbase, Silvergate Capital, Genesis, and Huobi all announced layoffs in the first 10 days
Good afternoon, friends.
I know it’s one of those things to say “crypto winter,” but it seems that it’s all the rage, but what’s really happening is the usual cyclical effects of the economics of cryptocurrencies and their markets. As I’ve mentioned before this is a good time for companies shipping features and products.
However, something it wasn’t been so great for was centralized companies that expanded themselves a little bit too fast amid the crypto boom cycle now they’re all saying that they’re feeling the squeeze even more right now and the layoffs are a little brutal.
We’re hearing about more of them right now.
Examples include the cryptocurrency banking group Silvergate Capital announced plans to cut its workforce by 40% and abandoned multiple projects, including a blockchain-based payment solution based on Diem, which was Meta’s failed stablecoin project.
Crypto lender Genesis cut 30% of its staff, after laying off 20% of its staff in August. The exchange Huobi confirmed layoffs of 20% of its staff. And Coinbase led layoffs for the third time since 2022, cutting its own workforce by 950 employees, or 20%, amid what Coinbase CEO Brian Armstrong said was “fallout from unscrupulous actors in the industry…”
Clearly referring to the bankruptcy of FTX and the actions of Sam Bankman-Fried, who just plead guilty to multiple fraud charges related to what happened. After everything that happened in 2022, including multiple crashes of various crypto projects – looking at you TerraUSD – and FTX, it’s obvious that there’s going to be some pullback.
As we might expect, it will also probably help bright to light the companies that were playing fast and loose with their money. You may have been seeing the word “contagion” thrown around in the media a lot of late. It’s a favorite headline and I don’t expect it gone in the near term, especially after the fall of FTX.
This market might affect some of the larger players to an extent, especially because of the broad effects of the bear market, but as I’ve said before this is a good time for the growth of protocols and for developers to do work. Bear markets are for builders.
Keep reading for a more in-depth discussion of the news and a bulleted list of some interesting stories from earlier in the month and this week, with the long-form discussion below the fold. Stay tuned for more next week! We have more coming as usual.
Thank you for your support!
If you enjoy this newsletter, you'll want to check these links out.
💛 - Send this email to a friend! Even if you’re on the paid version. It’ll get someone else interested, and possibly subscribed!
🕊️ - I'm the Ops Pod lead for FreeRossDAO, a movement for prison reform and clemency for the unjust imprisonment of Ross Ulbricht. Learn more here, or subscribe to my FreeRossDAO Newsletter.
₿ - I'm the VP at Geosyn Mining, a datacenter for co-locating your bitcoin mining equipment. If you want to learn more about how you can mine bitcoin directly, drop me a line here.
🦢 - Have you started investing in Bitcoin yet? You’ve read about Dollar Cost Averaging, but don’t know where to start? I endorse Swan Bitcoin as a great tool for setting up a disciplined investment regimen, and many of you do, too! If you sign up with this link, I get $10 to help support my efforts with this newsletter.
📧 - Did you get this emailed to you? Click here to try a premium subscription out free for 14-days (generally, two issues).
Final Fantasy creator doubles down on blockchain gaming. A letter from Square-Enix President Yosuke Matsuda reveals the company’s dedication to blockchain gaming across 2022 and into 2023 and increased focus on blockchain gaming, reported CoinTelegraph.
‘Mutant Ape Planet’ NFT dev arrested, charged with fraud over alleged $2.9M rug pull. The developer of the Mutant Ape Planet NFT collection, a knockoff of the MAYC collection, has been arrested in connection with an alleged $2.9 million rug pull, reported CoinDesk.
Blockchain Behind the Scenes
Job cuts hit the crypto industry in 2023, Silvergate Capital and Genesis. Crypto bank Silvergate Capital cut 40% of its staff shortly into January alongside crypto lender Genesis which laid off 30% more of its staff, both amid cost-cutting measures.
Keep reading with a 7-day free trial
Subscribe to Ask Doctor Bitcoin to keep reading this post and get 7 days of free access to the full post archives.