By Xinghui Kok and Rae Wee
SINGAPORE (Reuters) – Cryptocurrency exchange Huobi plans to lay off around 20% of its staff, the company told Reuters on Friday, in the latest sign of cost-cutting in the industry as investor interest in digital assets.
“The planned layoff rate is around 20%, but it will not be implemented now. With the market down, a very lean team will be maintained going forward,” Huobi said in a statement, responding to questions from Reuters.
The statement confirmed an earlier message from Tron founder Justin Sun, in which he said that “structural adjustment” at Huobi had not yet begun, but should be completed by the end of the first quarter.
Sun said the company currently has 1,100 employees.
Sun, a Chinese cryptocurrency entrepreneur who is also a member of Huobi’s advisory board, said in an internal memo that the company has been like “a wildfire in (crypto) winter” despite the deteriorating macroeconomic environment.
He added that the platform had averaged 20,000 new daily users over the past three months.
Huobi was ranked the eighth largest cryptocurrency exchange in terms of volume in November, according to analytics website CoinGecko.
Sun called the restructuring “short-term pains” that could eventually pay off for the company.
The announcement comes amid widespread concerns over reserves and solvency at several cryptocurrency exchanges and banks, in the wake of the FTX collapse and a series of bankruptcy protection filings last year.
Cryptocurrency firm Genesis has cut 30% of its workforce in its second round of layoffs in less than six months, a source told Reuters on Thursday. And industry-linked Silvergate bank reported a sharp drop in its cryptocurrency-linked deposits in the fourth quarter.
Last year, Huobi founder Leon Li sold his majority stake in the company to About Capital.
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