- Entire derivatives platforms felt the effects, with the major firms laying off employees.
- Recent times have witnessed a rise in the number of layoffs throughout the sector.
Because of the current bear market, the crypto derivatives platform Paradigm has decided to reduce employee pay by 15%. After FTX’s bankruptcy last month, derivatives trading took a significant hit. Exchange co-founded by arrested entrepreneur Sam Bankman-Fried is accused of using billions of dollars in client cash to finance the uncollateralized margin trading of Alameda Research, a subsidiary of the exchange.
The company stated:
“Post FTX’s collapse, it is clear the contagion is deep and wide and like many of our clients and peers, we are not immune. Salary cuts reduce the need for layoffs seen across the ecosystem and have a lesser impact on org momentum.”
New Approach to Handle Sluggish Market
The previous month has witnessed a rise in the number of layoffs throughout the whole cryptocurrency sector. Coinbase (18%), Opensea (20%), and Kraken (30%) are just a few of the exchanges and trading platforms that have seen significant layoffs. However, the recent approach by Paradigm is much better compared to mass layoffs.
The firm further added:
“These are tough times, but we must do the hard thing and retain the financial flexibility to navigate the turbulent times we find ourselves in as an industry.”
In the end, the exchange and large parts of the cryptocurrency sector were devastated by unsecured borrowing. As a result of the mayhem, derivatives platforms felt the effects, with the major firms laying off employees.
Financial institutions have also been hit hard. The gap between the value of the GBTC trust and Bitcoin has widened this week as the price of Grayscale’s flagship GBTC trust, a mechanism for investors to obtain exposure to Bitcoin without engaging in it directly, hit a new low earlier in the week.
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