Struggling cryptocurrency exchange CoinFLEX is undergoing mass layoffs.
“We unfortunately had to let go of a significant number of the CoinFLEX team across all departments and geographies,” company co-founders Sudhu Arumugam and Mark Lamb said in a statement. blog post this morning.
The downsizing is significant enough that, combined with staff reductions, it cuts company costs “by about 50-60%,” the co-founders wrote. The remaining staff will focus exclusively on products and technology.
The news comes after a debilitating month for the cryptocurrency exchange, which frozen all customer withdrawals end of June. Unlike the multitude of other cryptocurrency companies and exchanges that also froze client accounts during the same period, due to questionable financial practices and the the impact of the current bear market—CoinFLEX says it is in dire straits due to an $84 million deficit owed to the company by a single “large individual customer”.
This client, according to CoinFLEX co-founder Mark Lamb, is prominent Bitcoin Evangelist Roger Ver. Earlier this month, CoinFLEX commenced arbitration with Ver in a Hong Kong court to try to recover these funds, but a verdict is not expected for 11 months. Ver, who earned the nickname “Bitcoin Jesus” as the first cryptocurrency advocate, strenuously denied the allegation that he owed the company money.
Recently, rumors have swirled spread I’ve been lacking on a debt to a counterparty. These rumors are false. Not only do I have no debt to this counterparty, but this counterparty party owes me a substantial sum of money, and I am currently looking for the return of my funds.
Since then, CoinFLEX has made 10% of user funds available for withdrawal. But the vast majority of customer deposits remain inaccessible.
Thus, the exchange was forced to make massive cuts in its payroll and spending, as evidenced by current developments. In today’s blog post, Arumugam and Lamb hinted that the company is hoping for a larger company to step in to remedy the situation.
“The intention is to remain the right size for any entity considering a potential acquisition or partnership opportunity with CoinFLEX,” the two co-founders said.
As many crypto companies have started to retreat into a cascading domino effectindustry titans, especially FTX CEO Sam Bankman-Fried,rushed to bail out and acquire many of themwith the aim of mitigating the damage to the broader crypto industry and market.
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