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  • Recap of the Crypto Industry in 2022: Layoffs, Metaverse Expansion, Credit Crises and More

Recap of the Crypto Industry in 2022: Layoffs, Metaverse Expansion, Credit Crises and More

Web3 Wednesday (#2)

| 🍿 Quick Snack |

  • ✂️ Coinbase began shedding jobs in June when crypto’s bear market started to take hold. CEO Brian Armstrong said that the company had “grown too quickly” during the crypto bull market, expanding to more than 5,000 employees from 1,250 at the start of 2021.

  • 💎 A metaverse company has successfully partnered with the likes of retailer Forever 21, “The Voice” program and even Mattel’s Barbie, generating multiple millions of dollars in virtual goods.

  • 🔥 Cameron Winklevoss penned a public letter calling for the ouster of Barry Silbert and accused DCG and Genesis of committing accounting fraud.

  • 🚨 2022 marked the first proper crypto credit crisis, caused by an abundance of crypto lenders promising high returns for deposits and ended in the arrest of the founder of FTX and Alameda Research, Sam Bankman-Fried.

| 🍔 The Full Meal |

  • Cryptocurrency exchange Coinbase has announced plans to reduce its headcount by 950 employees, or 20% of its 4,700 person workforce.

  • The restructuring is expected to cost between $149m and $163m.

“The entire industry is going through a crisis of confidence and trading volume remains very weak. This job cut is a reflection of the current challenging environment”

- Owen Lau, Analyst @ Oppenheimer
  • Crypto exchange Gemini has ended its master loan agreement between its customers and Genesis, and requires Genesis to return all assets outstanding.

  • Genesis Global Trading, a partner with Gemini on crypto lending product “Gemini Earn”, halted customer withdrawals in November in the aftermath of FTX’s collapse, resulting in locked-up assets for Gemini Earn customers.

  • Gemini Earn was launched in February 2021 and marketed as an interest-earning account for cryptocurrency deposits, with Genesis supplying the yield Gemini Earn investors received.

  • Gemini believes that it is as much as a victim as Gemini Earn’s customers. The crypto exchange has deflected blame by filing a claim in court in response to a class-action lawsuit from Gemini Earn customers, stating that their complaint “goes after the wrong parties”.

It is an understatement to say that a lot happened in the world of crypto in 2022. Here are some of the highlights:

  • Bitcoin and Ether had a 65% and 67% pullback in 2022, respectively.

  • Headwinds led most of the publicly traded bitcoin mining companies to lose immense value, CleanSpark was the best performer but still lost 79%

  • The amount of venture funding raised by blockchain and crypto companies increased to almost $30 billion

  • Ethereum successfully implemented “the Merge” moving from a proof-of-work consensus mechanism to a proof-of-stake mechanism.

  • Bitcoin’s Lightning Network had some exciting potential use cases with the growth of the network and the announcement of “Taro” by Lightning Labs. Taro is a protocol aiming to bring low-fee stablecoin and asset transfers to the Bitcoin Lightning Network.

  • The year then ended with a crypto credit crisis, which was caused by a glut of crypto lenders promising yield to customers in exchange for deposits and culminated in the arrest of FTX and Alameda Research founder Sam Bankman-Fried.

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