Troubled cryptocurrency exchange CoinFLEX is undergoing massive layoffs.
“We, unfortunately, had to let go of a significant number of the CoinFLEX team across all departments and geographies,” announced company co-founders Sudhu Arumugam and Mark Lamb in a blog post this morning.
The staff reduction is sizable enough that in combination with non-staff cuts, it will reduce company costs “by approximately 50-60%,” the co-founders wrote. Remaining staff will be focused exclusively on product and technology.
The news comes after a debilitating month for the cryptocurrency exchange, which froze all customer withdrawals in late June. Unlike the slew of other cryptocurrency firms and exchanges that similarly froze customer accounts in the same period—due to questionable financial practices and the repercussions of the current bear market—CoinFLEX claims it is in dire straits due to an $84 million deficit owed to the company by a single “large individual customer.”
That customer, according to CoinFLEX co-founder Mark Lamb, is prominent Bitcoin evangelist Roger Ver. Earlier this month, CoinFLEX entered arbitration with Ver in a Hong Kong court to attempt to recoup those funds, but a verdict is not expected for another 11 months. Ver, who earned the moniker of “Bitcoin Jesus” as an early advocate of the cryptocurrency, has vigorously denied the allegation that he owes the company any money.
Since then, CoinFLEX has made 10% of user funds available for withdrawal. But the vast majority of customer deposits remain inaccessible.
Thus, the exchange has been forced to make massive cuts to its payroll and spending, as evidenced by today’s developments. In today’s blog post, Arumugam and Lamb alluded to the fact that the company is hoping a larger firm steps in to remedy the situation.
“The intention is to remain right-sized for any entity considering a potential acquisition of or partnership opportunity with CoinFLEX,” the two co-founders said.
As numerous crypto companies have started folding in a cascading domino effect, industry titans—particularly FTX CEO Sam Bankman-Fried—have rushed to bail out and acquire many of them, in an attempt to mitigate the damage to the broader crypto industry and market.
Stay on top of crypto news, get daily updates in your inbox.