The Singapore-based Cryptocurrency exchange company Crypto.com is reportedly facing some headwinds. The company announced the layoff of 5% of its 4000-person workforce in June, but the number may be more than that, according to recent news. Advertising and marketing costs are also being scaled down.
Crypto.com’s link with Wirecard, the insolvent German financial service provider, is also in the spotlight.
Stories of a 50% Layoff
It was reported that the actual number of employees laid-off was 2000. But a representative from Crypto.com told Techinasia that: “Any media reports of ongoing job reductions are inaccurate, as are additional estimates and rumors around the total number of reductions,”. However, the exact numbers and details weren’t provided.
Pullbacks on Marketing Expenses
Crypto.com has been pouring substantial effort and resources into its marketing campaigns. It hired Matt Damon to star in its commercial.
The company also inked a $700 Million deal to have the naming rights to the former Staples Arena. The LA Lakers home is now known as Crypto.com Arena.
But the bear market, which has affected several crypto companies, is also affecting Crypto.com’s marketing plans. It has withdrawn from the $495 million UEFA (Union of European Football Associations) League sponsorship.
Reduction in Rewards
Launched in November 2018, Crypto.com’s Visa Card became popular because of its enticing rewards. It used to give as much as an 8% cash-back reward for purchases. But effective 1 June 2022, these rewards were downgraded. Rewards will now range from 0%-2% for those without any CRO staked and 0%-5% for those with active CRO stakes. A cardholder needs to stake $400,000 worth of CRO to qualify for the top-tier Obsidian card.
Wirecard Debacle
Crypto.com also faced some hurdles when Wirecard collapsed in the wake of its $2.1 billion scandal. Wirecard used to issue cryptocurrency payment cards for Crypto.com. But Kris Marszalek, Crypto.com’s CEO, clarified in a tweet that customer funds are safe. He further explained that Wirecard did not have custody of the company’s crypto assets.
What Does the Future Hold?
Several crypto companies have fallen amid the bear market. Understandably, consumers and investors are all questioning every step a financial blockchain company takes.
A lot of companies will try to trim their budgets to last until the bull market starts. Investors on other hand should always do their research before parting with their capital.
Cronos (CRO), Crypto.com’s native token, is now trading at $0.10 from its all-time high of $0.96. This is a huge decrease in value, but almost every cryptocurrency has also devalued. The question most crypto enthusiasts are probably asking is: “will it survive and reach another all-time high?”. That is a question only time can answer.
[i] https://fortune.com/2022/06/13/crypto-com-cuts-260-jobs-market-downturn/
Original image from Crypto.com (edited)
