Gemini, the cryptocurrency exchange owned by the Winklevoss twin brothers, is set to reduce its workforce by a further 10%, making job cuts for the third time in the last seven months. Despite a rebound in cryptocurrency prices in 2023, the crypto winter continues, with more companies announcing job cuts in the sector.
Gemini Cuts Jobs for the Third Time
According to an internal message viewed by The Information, the company managed by Tayler and Cameron Winklevoss is set to lay off a tenth of its current workforce. The news was distributed on Monday via the company's Slack and separately confirmed by CNBC in an interview with a company spokesperson.
Gemini had about 1,000 employees in November, having laid off about 7% of its workforce in July and cut 10% of its workforce a month earlier. "It was our hope to avoid further reductions after this summer, however, persistent negative macroeconomic conditions and unprecedented fraud perpetuated by bad actors in our industry have left us with no other choice but to revise our outlook and further reduce headcount," Cameron Winklevoss wrote in a Slack message seen by The Information.
Gemini Problems Pile Up
Although the crypto market is still near its long-term minimums, low prices are one of Gemini's latest problems. The platform is facing a court battle with the U.S. Securities and Exchange Commission (SEC ) over alleged unregistered sales of securities in connection with its partnership with Genesis, Barry Silbert's bankrupt company.
1/ Earn Update: This evening, Genesis Global Capital, LLC (Genesis) filed for bankruptcy under Chapter 11. This is a crucial step towards us being able to recover your assets.
— Cameron Winklevoss (@cameron) January 20, 2023
The lender generated sizable profits for Gemini customers through Gemini Earn, the platform's high-yield product. However, the relationship between the two companies was severely damaged when the FTX exchange filed for bankruptcy. Genesis froze loans and redemptions, leaving customers of the Winklevoss brothers' exchange without almost $900 million.
It forced a sizable group of the exchange's 340,000 customers to take matters into their own hands. They filed a class action lawsuit against the exchange. Meanwhile, Genesis has filed for bankruptcy protection, where Gemini is listed as the largest creditor with $765.9 million.
Watch the recent FMLS22 panel on reimagining the crypto market structure.
Industry Feels the Crypto Blues
While Gemini is laying off employees for the third time in a short period, other cryptocurrency companies are also choosing to cut jobs to optimize costs.
A week ago, ConsenSys, a cryptocurrency software company, confirmed its plans to cut 11% of its current workforce, which translates to almost 100 positions. The company wants to focus on its core business and increase existing productivity.
Similar plans were announced by the Coinbase exchange, which intends to lay off about 20%, or 950 people. It is part of a restructuring effort expected to be completed in the second quarter, costing the platform up to $164 million.
Blockchain.com, a Luxembourg-headquartered cryptocurrency exchange, decided to cut 25% of its workforce last year. The largest number of affected employees resided in Argentina, where the platform closed its offices. In total, about 150 people lost their jobs.
In 2023, bitcoin has grown by more than 20%, with the total market capitalization of the digital asset rising above $1 trillion. The question is whether this is enough for the industry to forget the upheaval caused by the collapse of FTX and the Terra ecosystem last year.
