Coinbase (Nasdaq: COIN) announced Tuesday it would be cutting 18% of its staff just days after announcing a hiring freeze and rescinding offers to prospective employees.
The move mirrors an overall downturn in the crypto sector with prices of major digital assets like bitcoin and ethereum cratering and large platforms encountering major liquidity issues and freezing withdrawals.
Other crypto exchanges BlockFi and Crypto.com, the company with the attention-grabbing Super Bowl commercial starring Matt Damon, also announced plans to lay off hundreds of employees.
But not every crypto company is downscaling. Binance.US, based in Palo Alto, and Ripple Labs Inc., based in San Francisco, still have hundreds of job openings listed on their websites and their CEOs are publicly touting their companies’ ability to survive the “crypto winter.”
Ripple CEO Brad Garlinghouse posted an extensive thread on Twitter attempting to assuage panic over the downturn and explaining how the company is able to keep expanding.
“It’s never easy, but there are a few key reasons why Ripple has weathered the cyclical bear markets, as we will do here and continue growing,” he wrote. “1/ having an experienced exec team that has been through the dot com bubble, 2008 financial crisis, 2018 crypto winter and more.”
He says the company, which developed the cryptocurrency of the same name, is building enterprise products for the long term and has a significant cash balance to continue hiring. Ripple has become a popular tool used by many banks to facilitate currency exchanges at cheaper rates by using the cryptocurrency as an intermediary.
The price of ripple (XRP) has fallen significantly this year in line with other cryptocurrencies, over 60% year to date to about 32 cents.
However, Ripple could soon see the end of a drawn-out SEC lawsuit. A judge is expected to make a ruling soon, which if it goes in Ripple’s favor, could force the SEC to seek an early settlement. The SEC originally sued the company over illegally using ripple tokens to raise funds as an unregistered security. At issue in the case are whether cryptocurrencies are securities and should be regulated as such.
Garlinghouse has previously stated that the company plans to file for an IPO once the SEC lawsuit is out of the way.
Ripple may be in a better position due to the fact it is not an exchange and is not affected in the same way when overall trading is down. It is seeking to supplant legacy firms like Western Union as the go-to intermediary for remittances and other cross currency payments, a goal that does not necessitate a high price for the digital currency itself.
Binance’s hiring spree comes at a tricky time for the company. On Monday the exchange temporarily blocked withdrawals of bitcoin causing panic that the firm may be having liquidity issues. The pause lasted three hours, and founder Changpeng Zhao explained it away as a technical issue.
Binance.US is the U.S. arm of Binance, a separate entity created due to Binance’s legal problems with the U.S. government. The Justice Department and IRS are investigating the company, based in the Cayman Islands, for money alleged laundering and tax avoidance.
However, Binance.US appears to be still confident in growing the company, with CEO Brian Shroder announcing hiring on 80 positions last week.
The exchange may be in a better position than other exchanges solely due to the fact it did not splurge the gains it made over the years on expensive purchases, such as Crypto.com's $700 million deal to get naming rights to the NBA stadium in L.A. home to the Lakers or Coinbase's own multiyear deal to be the exclusive cryptocurrency platform partner of the NBA.
